Light Truck Sales Double Car Sales at 2018 Halfway Point

2018 is on pace to be the worst sales year for cars since 1958. That’s not to say, though, that the industry is doing poorly.

With SUV and truck sales on the rise, and showing no signs of slowing, passenger cars are an increasingly rare item. In fact, so far, for every car sold in America, two SUVs, crossovers, or pickups have been sold.

And automakers are only too happy to cash in on the sales momentum. According to Bank of America Merrill Lynch forecasts, 71% of new cars introduced between 2019 and 2022 will be light trucks.

With brands like FCA and Ford killing off their cars (except for the enthusiast-specials) it’s easy to see where light trucks’ advantage will come from. Some manufacturers, like GM, have promised that they’ll keep producing cars, though. As others pull out, they figure, they’ll be there to mop up the scraps.

But SUVs, crossovers, and pickups are doing a good job of picking up their own scraps. According to Edmunds, in 2014 nearly 70% of buyers replaced their car with another car. Now, though, that number is nearing 50%, with 40% moving into SUVs and crossovers and another 6.3% getting into pickups.

Of course, there will come a time when the market reaches a new equilibrium and the car’s shrinking hold on the market stops shrinking, but it’s hard to know just when that will be.

“Exactly where the floor is, we’re still sorting it out,” Stephanie Brinley, senior analyst with IHS Markit, told Automotive News.

Still, there’s anxiety about what will happen to SUV sales when fuel prices in the US rise. Seen as one of the biggest factor in rising sales, automakers like Ford and FCA could find themselves over-invested in big, heavy cars when the price at the pump skyrockets.

With MPGs shrinking, though, the economy gap between crossovers and cars could mean that even when fuel prices rise, the SUVs hold on the market could be tight enough that it doesn’t let go.

[source: Automotive News]

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