The first half of 2019 is officially over and for the automotive industry may be seeing the lowest sales level it has seen since the same period back in 2013. Despite the slowdown, industry profits are not yet suffering thanks to changes to record climbs in average vehicle prices.
According to Bloomberg analysts from J.D. Power and LMC Automotive are estimating sales from January through June of this year will come in 2.9 to 3.3. percent lower than the same period in 2018. The dip in sales will equate to the lowest sales level for the first half of the year since 2013. Despite the dip, seasonally adjusted annualized rate–SAAR–is coming in at 17 million units, down from 17.3 million in June 2018.
The final sales numbers for the first half of the year have not yet been calculated.
While sales volumes may be down year-over-year, automaker profits are not down. The financial lift is credited to American’s love affair with trucks and SUVs. This love affair has driven average vehicle prices to $33,346, an increase of four percent from the same period last year and one of the largest ever increases. The climb in pricing has also allowed automakers to continue offering sales incentives to boost volumes.
Analysts also estimate that sales to rental fleets and other commercial customers is actually up year-over-year, despite the overall sales decline. This means the decline in sales on the retail side of the industry is perhaps understated in the aggregate figure.