U.S. auto sales fell for the fourth straight month, declining 4.7 percent in April — the biggest slowdown of the year, and a strong indication that 2017 will put an end to seven straight years of growth.
According to ABC News, auto executives and analysts have been expecting a slowdown and are not panicking just yet. In fact, many anticipate sales in the important economic sector to top 17 million for the third straight year, an industry first.
“The demand for the light vehicles is still holding up quite well,” said George Mokrzan, director of economics for Huntington Bank in Columbus, Ohio. “It’s been coming down from a very high level.”
Yet Kelley Blue Book is reporting that 2017 U.S. sales will experience their first annual drop since 2009, with full-year sales at 16.8 million to 17.3 million. And General Motors, Ford, Toyota, Fiat Chrysler, Nissan and Honda this week all reported weaker U.S. sales than a year ago. Of the top-selling automakers, only Hyundai and Volkswagen reported small increases. The news caused Ford and Fiat Chrysler shares to fall more than 4 percent, with Ford hitting a new 52-week low and GM shares falling almost 3 percent.
Jessica Caldwell, an analyst with the Edmunds.com auto buying site, pointed out that all growth cycles eventually come to an end. “It’s an economic cycle in buying that has to occur. I think that’s why we’re starting to see sales back off a little bit,” she said.
It’s interesting that auto sales are down, despite the fact that wages and consumer confidence are up, unemployment is down and gas prices and interest rates remain at historically low levels. But Mokrzan noted that because cars and trucks now last longer, people may be choosing to spend money elsewhere, such as on home remodeling and new home construction, which are both up.