Cars and Drivers

Auto Sales Could Dip for December

Chris Lange

Published: December 23, 2019 12:45 pm

Although retail auto sales are expected to dip for the 2019 year, there could be a silver lining, at least according to a report from J.D. Power. Overall, the report suggests that December sales will fall as the auto industry sets a record for transaction prices.

For the 2019 calendar year, new vehicle retail sales are projected to reach 13,717,600, a 1.7% decrease compared to 2018. New vehicle total sales are projected to reach 16,998,800, a 1.4% decrease year over year.

New-vehicle retail sales in December are expected to reach 1,272,300 units, a 2.8% decrease. At the same time, total sales in December are projected to reach 1,531,500 units, a 2.1% decrease.

Average transaction prices in December are on pace to set a record of $34,602, up $673 from last year. Growth is being driven by prices of trucks and sport utility vehicles, which are expected to reach $36,935, an increase of $655 from last year. Prices for cars are up to $27,461, a modest increase of $79.

Average incentive spending per unit in December is expected to reach $4,600, up from $4,304 last year. The previous record ($4,520) was set in November 2019.

The combination of record prices with overall sales means that consumers will spend $462 billion on new vehicles in 2019. This is $8.4 billion higher than last year and marks the first time that expenditures will exceed $460 billion.

Thomas King, president of the Data & Analytics Division at J.D. Power, commented:

December’s soft performance closes the year on a down note, but another record for transaction prices reinforces that manufacturers are producing the type of vehicles that consumers want in the market. Record prices, however, have also been accompanied by record incentive levels, which signifies that there is still too much supply relative to overall demand.

Looking ahead to 2020, total light-vehicle demand is forecast at 16.8 million units, down 1.4% from 2019 and retail light-vehicle demand is at 13.5 million units, down 1.7%.