Pricey SUVs powered a surprisingly buoyant US auto market | Auto Finance News | Auto Finance News

Pricey SUVs powered a surprisingly buoyant US auto market

A row of 2014 Ford Focus vehicles sit on display at Uftring Ford in East Peoria, Illinois, U.S., on Saturday, Nov. 30, 2013. Photographer: Daniel Acker/Bloomberg

Sport utility vehicles were a force at the end of 2019, possibly garnering a majority of U.S. auto purchases for the first time and generating enough demand to keep sales steady and push prices to record highs.

  • Carmakers probably sold more than 17 million new vehicles for a fifth consecutive year, despite a dip in December and fourth-quarter deliveries, according to market researchers. Most automakers are expected to release results on Friday.

Key Insights

  • Edmunds predicts SUVs seized more than 50% of the market in the last three months, and that pickup market share topped 19% for the first time since 2005.
  • Automakers dialed up year-end promotional deals, though the strong demand for costlier SUVs and trucks gave them legroom to discount. J.D. Power estimates that records were set last month both for average transaction prices ($34,602 per vehicle, up $673 from a year ago) and incentive spending ($4,600 per unit, up $296).
  • The 40-day union-worker strike that halted General Motors Co. production through late October contributed to what analysts expect to have been a steeper decline in fourth-quarter sales than its U.S. rivals.

  • While GM probably ended the year with “very lean” inventory, according to RBC Capital Markets, other carmakers aren’t as well-positioned on supply. Fiat Chrysler Automobiles NV scrambled last month to sell through a pileup of as many as 70,000 unassigned vehicles.
  • Toyota Motor Corp. took much of the excitement out of the sometimes-dramatic races for segment bragging rights by building sizable leads with its RAV4 SUV and Camry sedan. The two models will probably beat out Honda Motor Co.’s CR-V and Accord by more than 50,000 and 60,000 units, respectively, for the year, according to TrueCar.

  • Nissan Motor Co. probably stumbled its way over the finish line of its first full year without longtime leader Carlos Ghosn. If analysts’ average estimate for a 22% December decline proves accurate, it’ll be the steepest monthly drop for the company since its former chairman was arrested in late 2018.

— Craig Trudell (Bloomberg)

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