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Auto Sales Are Getting Older, More Trucks, SUVs, CUVs : GM, Ford Toyota Best-sellers

What is the best car to buy? What types of vehicles are consumers buying? Several new studies show an increase in SUVs, CUVs, trucks and used off-lease vehicle CPO vehicles. Here is the latest research from Jumpstart Media

New Vehicle Models, SUVs, CUVs & Trucks

Jumpstart Automotive Media,  released its monthly shopper interest data, with results showing increased shopper interest in key vehicle refreshes and upcoming launches, as well as pickups, utility vehicles and certain car segments during the month of March.

As competition for consumer attention and loyalty remains fierce, there are
seen drastic shifts in vehicle introductions. BMW, for one, is in the middle of rolling out 40 all-new and revamped vehicles for 2018 (a record for the brand). And even luxury and performance brands like Jaguar, Maserati, Lamborghini, and Alfa Romeo have expanded
their lineups to now include models in the SUV/CUV segments. With 25 – 30 new entries anticipated inboth 2018 and 2019, this expansion is sure to continue.

All three segments of pickup trucks (3/4 & 1-ton, full-size, and midsize) saw year-over-year increases in shopper interest ranging from 28% to 66% when comparing March 2018 to March 2017. GMC Sierra 1500 led all full-size pickups, with month-over-month growth of 108% in share of full-size truck shopper interest, and 79% growth over the same period last year. Also, although RAM 1500 saw a month-over-month decline of 23%, its shopper interest is still ahead by 73% compared to the same period last year.

Crossovers and SUVs also showed strength in shopper interest during the month, with two segments in particular stealing the spotlight. The subcompact (non-luxury) SUV/CUV segment was up 15% from March of last year, mostly attributed to new entries in the category (Toyota C-HR, Hyundai Kona, and Nissan Kicks).

Furthermore, the compact luxury SUV/CUV segment was up 14% from February, and up 19% compared to March of last year. Most of the growth is attributed to two vehicles (out of 14 in the segment): Acura RDX and a new entry, the Cadillac XT4. The Acura RDX saw growth of 29% from February and 36% from March of last year; In its first month of reveal, XT4 grabbed 7% of shopper interest in the competitive set, and already jumped to rank 6th in the segment.

A handful of car segments continued to see increases in shopper interest, a trend that began around the beginning of 2018. In the midsize sedan segment (up 9% from March of last year), the more significant gains came from the Nissan Altima and Mazda 6, both which are in model-year refreshes (+73% and +23% year-over-year). Both the midsize and full-size luxury sedan segments also saw some modest growth year-over-year; Vehicles contributing to the lift in the segments are: Kia K900, Lincoln Continental, Mercedes-Benz C-Class, and Audi A6 in the midsize luxury segment; Cadillac CT6 and Audi A8 in the full-size luxury sedan segment.

Jumpstart analyzes share of shopper interest regularly to gain insight into what consumers are considering when researching their next vehicle purchase, as well as how long it takes them to make a decision and how media influences their shopping process. These insights are based on the shopping patterns of more than 20 million in-market auto shoppers who are researching vehicles across the company’s portfolio of automotive publishers.

Jumpstart media notes that the the used car market continues to heat up. Thanks, in part, to a record number of off-lease vehicles boosting supply. Across Jumpstart,used cross-shopping is up 19%, with the luxury category seeing the greatest increases. almost half of all new
car shoppers are considering used or CPO vehicles for their next purchase. Additionally, used and CPO car shoppers are 33% more likely to consider themselves enthusiasts, and act as a resource their friends and family turn to for advice. And finally, shoppers who are considering a new vehicle are 10% more likely to consider switching to a used or CPO vehicle as they get closer to making a decision.

How Old Cars Are Being Financed.

LendingTree released the findings of its study on the places that buy the oldest used cars. LendingTree analyzed auto loan offers for borrowers in the top 50 U.S. metros (based on population) to find the average age of used cars financed in each metro, as well as which makes of used cars were most popular.

The national average age of a used car people sought to finance was six years old, but some parts of the country prefer older used cars more than others.

Places where car buyers purchase the oldest used cars

  • Portland, Ore. Portlanders sought the oldest cars in the U.S. Vehicles at least 7.45 years on average were what people sought to finance.
  • Salt Lake City ranked second among cities where people sought older used cars. Car buyers in Salt Lake City sought loans for cars aged a bit over 7 years.
  • Seattle, which is less than a three-hour drive away from Portland, ranked third nationally for seeking to buy the oldest cars, with an average car age of just under 7 years.
  • Midwest. The heartland of the U.S. largely sought older used cars, with cities from Denver to Milwaukee financing cars 6.34 years or older.
  • East Coast outliers. Two cities in Virginia were the only cities on the East Coast that sought out older used cars. Virginia Beach ranked fourth and the commonwealth’s capital, Richmond, ranked fifth with people in both cities seeking cars aged 6.78 and 6.52 years old, respectively.

Places where car buyers want newer used cars

  • Florida drivers really prefer newer used models. Miami car buyers wanted used cars under the 5-year-old mark, purchasing used cars with an average age of 4.76 years. Orlando, Jacksonville and Tampa, meanwhile, followed suit, with the average age not exceeding 5.86 years.
  • Texas has three of the 10 largest cities in the U.S., and all of them, including the capital Austin, have an appetite for younger vehicles, according to the study. Houston ranked as the second in the country for drivers seeking younger used cars, with an average age of 5.08 years.
  • New Orleans ranked third among metros seeking newer used vehicles. The average age of the desired used car in New Orleans is 5.33 years.
  • East Coast. New York City is also a large market for newer used cars. People sought loans for cars with an average age of 5.40 years, placing the Big Apple fifth on the list. It sits in a chain of major cities that also like newer used cars from Washington D.C. to Boston, which ranked ninth and tenth respectively.

Chevy is the most popular make among people buying used vehicles

Chevrolet was by far the most popular brand for used cars overall. Out of the top 50 metros, it was the most popular brand in 31. Nissan was the second-most popular overall, being favored in 10 out of the 50 metros.

For cities that favor the oldest used cars, the most popular car brands were largely American. In 17 out of the top 25 cities seeking older used cars, Chevrolet retained its spot as the most sought-after brand. Ford, however, claimed the top spot in Portland, Ore., where people buy the oldest used cars in the nation. Only six out of the top 25 cities buying older used cars favored foreign brands, with Nissan claiming five and Toyota claiming one metro.

For cities that favor the newest used cars, foreign brands came more into play. Chevy still claimed over half of the cities, 14 out of the 25. Drivers in Miami, the city that favors the newest used cars, chose Chevy most often, as did Dallas and New Orleans, which ranked third and fourth respectively. Houston, which ranked second, and San Francisco at No. 8 choose Toyota. For the rest, five favored Nissan, three favored Honda and one favored Ford.

“It’s important to shop around to compare prices on autos and auto loans,” said Jenn Jones, autos writer at LendingTree. “Once you know your used or new car budget, you can check out online car sites to sort through inventory and online lender sites to see terms and APRs.”

Jones continued, “You can shop around for an auto loan before you know the exact car you want to get. Some banks offer pre-approval programs, which could give you an idea of what financing is available to you within a price range. If you already know the exact car you want, that’s even better. Either way, you can go into the dealership knowing you have a financing offer ready, and you can ask the dealership to beat the offer.

US Vehicle Sales form Cox

U.S. new-vehicle sales in April are expected to fall 3.6 percent compared to April 2017, according to a forecast released today by Cox Automotive. However, despite the expected volume decline, the sales pace in the U.S. remains strong, at a seasonally adjusted annual rate (SAAR) of 17.3 million units, above year-ago levels. In April 2017, the SAAR was 17.0 million.

“This year, April has two fewer selling days than last year, so sales volume can decline and the pace can increase,” noted Cox Automotive Senior Economist Charlie Chesbrough. “That’s what we are expecting this month: Volume of 1.37 million units, down 50,000 from last year, but a healthy sales pace of 17.3 million units, closer to last month’s robust 17.4 million pace.”

A record sales pace is within reach if reported sales come in stronger than forecasted. The highest seasonally adjusted annual rate for April—17.5 million—was reached in 2016. The Cox Automotive 17.3 million-unit SAAR forecast puts this record within reach. However, beating the 2005 sales volume record of 1.5 million is not likely.

Key Highlights for Estimated April 2018 Sales Forecast:

In April, new light-vehicle sales, including fleet, are expected to reach 1.37 million units, down 3.6 percent, or 50,000 units, compared to April 2017 and down nearly 17 percent from last month.
The April 2018 SAAR is forecast to be 17.3 million, up from the 17.0 million pace of April 2017 and down slightly from the 17.4 million last month.
An April SAAR record is possible – 17.5 million pace was achieved in 2016. Higher than expected sales, coupled with two fewer selling days, puts the record within reach.

Most Automakers Expected to See Sales Volume Declines
Cox Automotive forecasts most OEMs to report lower year-over-year sales in April. However, GM and VW are expected to see modest gains over last year due to strong new crossovers. The Jeep brand is also expected to post strong performance thanks in large part to fresh products offerings.

Kelley Blue Book Executive Analyst Rebecca Lindland said, “I expect another strong month from the Jeep brand. The new products are driving strong sales and, considering FCA’s recent Q1 results, powering the bottom line as well. Of late, Jeep seems to be holding up the entire FCA tent.”

Consistent with the trend seen all year, car sales are expected to see double digit declines as preference for SUVs/CUVs continues to grow. Large SUVs are selling well, particularly those with three rows. Pickup trucks, thanks to robust incentive spending, continue at a solid year-over-year pace.

“The continued decline in sedan sales is obviously weighing heavily on many of the large OEMS,” noted Michelle Krebs, executive analyst at Autotrader. “Ford’s announcement yesterday that it plans to wind down sales of its core cars lines – Fiesta, Focus, Fusion and Taurus – is a bold and risky move. It’s an indication tough decisions are being made.”

All percentages are based on raw volume, not daily selling rate. There were 24 selling days in April 2018 versus 26 in April 2017.

Sale Forecast1

Market Share

Apr-18

Apr-17

Mar-18

YOY%

MOM%

Apr-18

Mar-18

MOM%

Apr-17

GM

245,000

244,406

296,341

0.2%

-17.3%

17.9%

18.0%

-0.1%

17.2%

Ford Motor Co

198,000

213,436

243,021

-7.2%

-18.5%

14.5%

14.7%

-0.3%

15.0%

Toyota Motor Co

194,000

201,926

222,782

-3.9%

-12.9%

14.2%

13.5%

0.6%

14.2%

Fiat Chrysler

175,000

176,176

216,063

-0.7%

-19.0%

12.8%

13.1%

-0.3%

12.4%

American Honda

130,000

138,386

142,392

-6.1%

-8.7%

9.5%

8.6%

0.8%

9.7%

Nissan

114,000

121,998

162,535

-6.6%

-29.9%

8.3%

9.9%

-1.5%

8.6%

Hyundai Kia

110,000

116,408

112,185

-5.5%

-1.9%

8.0%

6.8%

1.2%

8.2%

VW

53,000

51,797

57,394

2.3%

-7.7%

3.9%

3.5%

0.4%

3.6%

Subaru

52,000

52,368

58,097

-0.7%

-10.5%

3.8%

3.5%

0.3%

3.7%

Grand Total2

1,370,000

1,420,597

1,648,222

-3.6%

-16.9%

1 April 18 Cox Automotive Industry Insights Forecast; all historical data from OEM sales announcements

2 Includes brands not shown

Additional Insights from the Cox Automotive team
“The sales rate has been at or above 17 million since last August, suggesting the vehicle market is on sound footing,” noted Chesbrough. “Along with positive economic news, buying conditions remain strong with robust credit availability and aggressive OEM vehicle incentives, and these conditions are expected to remain through much of 2018. In addition, overall sales volumes have been supported by notable fleet activity, which is running above last year’s rate.”

Chesbrough, however, cautions against the many factors creating difficulties for the industry. Federal Reserve interest rate increases are starting to influence the economy and auto loan rates have risen to levels not seen since 2013. Gasoline prices are rising again, negatively impacting consumer spending power and vehicle ownership costs. And, importantly, because of aggressive leasing strategies in recent years there are millions of “gently-used” off-lease vehicles now available to consumers, providing growing competition for the new-vehicle market.

Even with significant headwinds, though, there is strong underlying support for healthy vehicle sales. Gradual interest rate increases have been expected and should not cause a large decline in affordability or overall market demand. Overall, economic conditions remain very strong with high consumer confidence and low unemployment rates.

Importantly, Trump administration tax reform is showing early signs of stimulating even more growth than initially assumed by Cox Automotive in December, when the legislation was passed. The current, robust sales pace may drive a future, upward revision of the Cox Automotive full-year sales forecast of 16.7 million units.

Cox Automotive will host its monthly automotive sales day call on Tuesday, May 1, at 11 a.m. EDT. Chesbrough and Krebs will provide an economic overview, share industry trends and answer questions. To discuss any automotive-related topic with a Cox Automotive analyst, contact a member of the Public Relations team to schedule an interview.

J.D. Power’s Numbers

J.D. Power’s April 2018 Used Car and Light Truck Guidelines Industry Update, analysts at J.D. Power Valuation Services found that wholesale prices of used vehicles up to 8 years in age increased by an average of 2.5%. The month’s performance can partially be attributed to strong price growth of vehicles within the compact and subcompact segments.

The used vehicle price index increased
Index was up 0.9 points to 115.9
New vehicle deliveries rose
Sales increased by 6.4%; new vehicle SAAR reached 17.40M
Incentive spending increased
Incentives grew for the 36th straight month

David Paris, executive analyst at J.D. Power Valuation Services said, “The strong performance we saw this past month has a lot to do with the compact and subcompact car prices that were the strongest in the industry. Compact car prices grew by 4.3% and subcompact car prices grew by 4.6%. Those results are about 2.5 points better than each segment’s previous 5-year average for the period.”