The strong economy keeps new car sales at historic highs, but analysts question how long this will last in the face of higher interest rates, shifting government policies, and a used vehicle market with more attractive options than ever
SANTA MONICA, Calif., June 26, 2019 -- So far 2019 has been a year of contrasts for automakers as they struggle to find a new normal amid rising interest rates, waning demand, dramatic growth in the used market and uncertain government policies. Edmunds analysts break down these issues and the major factors influencing the new vehicle market this year in the Midyear Update of the Edmunds 2019 Automotive Trends Report.
"Automakers are fighting a war on multiple fronts right now: Old cars are piling up on dealer lots, a glut of affordable off-lease vehicles are luring shoppers into the used market, and even with the Fed anticipated to lower rates in July, higher interest rates are here to stay," said Jeremy Acevedo, Edmunds' manager of industry analysis. "Strong economic indicators such as consumer confidence and low unemployment are keeping sales at historically elevated levels, but automakers have also been relying a little too heavily on fleet sales to keep these numbers up as well, which isn't a sustainable model."
According to Edmunds data, new vehicle sales are down 2.4% year-over-year through May, and Edmunds analysts maintain their forecast that 16.9 million new vehicles will be sold in 2019. In addition to a deeper dive into sales figures, the Midyear Report also reveals: