A new report is saying that new car sales took a nosedive in September; signaling economic distress could be just around the corner. The downward trend in the United States is being blamed on two hurricanes; while the slump in sales in the United Kingdom is being blamed on carmakers’ difficulty meeting emissions regulations.
Major automakers on Tuesday posted a hefty drop in U.S. new vehicle sales for September; caused in part by a decline in sales in areas hit by Hurricane Florence and a tough comparison to the previous September when consumers rushed to replace vehicles damaged by Hurricane Harvey; reported Reuters.
Ford Motor Company on Tuesday reported an 11.2 percent drop in sales; with declines in every major category. Sales of sedans were down nearly 26 percent. However; Fiat Chrysler Automobiles bucked the trend for the month; reporting a 15 percent jump in U.S. sales. This was due to increases in sales of its infamous Jeeps; notably the Cherokee and Compass models; and Ram pickup trucks.
“September was a bloodbath for cars;” Cox Automotive analyst Michelle Krebs told reporters on a conference call. “They dropped like a rock;” Krebs said of Americans and the long-standing trend of abandoning smaller cars for larger and more comfortable SUVs and pickups.
Meanwhile; in the United Kingdom; the number of total vehicles registered was down 20.5% on the same period in 2017 at 338;834; the Society of Motor Manufacturers and Traders said according to the BBC. Carmakers had struggled with “a raft of upheavals” including adjusting to stricter emissions standards; the society added. It also said that the impact of the sales plunge was felt across the board; with registrations by private consumers; fleets; and businesses all sharply declining. Sales of petrol and diesel cars fell; but those of hybrids and plug-in electric vehicles actually rose by a meager 3.9%.
According to Reuters; the slump in new car sales is expected to continue too. After a strong first half of the year while in an economic bubble of epic proportions; U.S. new auto sales are expected to dip in the second half of 2018. Rising interest rates; in particular; translate into higher monthly car payments and push more Americans toward buying used vehicles.
“It was a tough comparison for sales year-over-year; but otherwise the month was very solid for us with some bright spots;” said Billy Hayes; Nissan’s vice president for regional operations in North America. “We’re still extremely bullish and we’re feeling very good about the rest of the year.”