The National Automobile Dealers Association forecasted sales of 16.8 million new cars and light trucks in the United States for 2020, down slightly from 2019 sales volume.
We expect new light-vehicle sales will come in at 16.8 million units for 2020, roughly a 1.2 percent drop from 2019 sales volume, NADA Senior Economist Patrick Manzi said in a Dec. 17 news release. As for 2019, it appears new vehicle sales will best the expectations of most in the industry by topping 17 million units for the fifth straight year.
In addition, sales this year continued to reflect consumers steering away from car segments. Light trucks are on track to account for more than 70 percent of overall new car sales for 2019, while cars will account for less than 30 percent of sales of new car sales. By the end of 2020, NADA projects that three out of every four new vehicles sold will be light trucks, a significant increase from a decade ago, when the new vehicle sales mix was 48 percent light trucks and 52 percent cars, the association noted.
Crossovers, which account for more than 40 percent of the total new vehicle market, continue to increase in fuel efficiency each year, NADA noted, offering fuel economy close to their sedan counterparts. In the absence of a significant spike in gasoline prices for a sustained period of time, we expect this shift in preference as permanent, Manzi added.
The association noted that the price gap between average monthly loan payments for new and used vehicles is widening, and hit $159 in November 2019, according to J.D. Power. Consumers, even those with stellar credit, are choosing to buy pre-owned vehicles from new car dealerships, he said.
Among macroeconomic factors that will impact auto retailing in 2020, consumer spending is expected to remain strong. Consumer spending has certainly helped the current U.S. economic expansion into the longest expansion on record, Manzi said. Looking at 2020, aside from potential fallout from trade disputes, there isnt anything on the horizon that would suggest an end to this expansion.
NADA represents more than 16,500 light vehicle and commercial truck dealerships with both domestic and international franchises.