US Auto Industry Ends 7-Year Growth Streak in Car Sales

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The outlook on the U.S. car sales for 2018 will depend on how you perceive industry figures from Autodata, and Kelley Blue Book.

Sales in 2017 reached 17.2 million sold vehicles, down 1.8% compared to 2016 that ended a seven-year growth streak since 2009, according to Autodata. It had expected sales in the previous month to fall 5.2%, while and Kelley Blue Book estimated them to drop 5.6% and 6.7%, respectively.

Demand and Sales

A reason behind weaker sales in the last 12 months involved increasing interest rates, which led consumers to defer buying new vehicles and consider lower-mileage models. This manifested from certain major car makers that sold fewer cars, even if they offered slightly higher discounts during the holiday season.

Despite the year-over-year decline in sales last year, some tailwinds await the car industry in the near future. More Americans have chosen to own SUVs, crossover vehicles and pickup trucks instead of passenger cars. In Colorado, for instance, sales of light trucks rose 9.9% in the first 11 months of 2017.

Colorado Market

Colorado Automobile Dealers Association’s (CADA) report showed that overall car sales between January and November 2017 rose 8.2% year over year. Sellers offloaded more second-hand vehicles than new units, which bodes well for businesses like that offer car repair in Parker or Denver.

CADA President Tim Jackson partly attributed the increase to a bigger migrant population. According to the U.S. Census Bureau, more than 77,000 people moved to the state between July 2016 and July 2017. A hailstorm in the previous May also led owners to seek replacements for damaged vehicles.

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While sales in 2017 seemed to be lower on a year-over-year basis, the growing demand for light trucks and four-wheel drive vehicles will likely prevent a continuous slump in sales for this year.