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Auto Dealers

A Tepid Outlook For The Auto Industry In 2019


2018 was a better-than-expected year for the auto industry as the market defied predictions of a down year in car sales collated with 2017 sales. The auto industry sold approximately 17.3 million vehicles for 2018 making it the historic fourth straight year in a row of at least 17 million automobiles sold. However, auto dealers and analysts are still chary about the future of the sector for 2019 for a number of reasons. 


For one, General Motors Co., the biggest auto maker in the U.S. by sales, was down 2.7% in the last quarter of 2018 and Ford reportedly saw its sales down 8.8%. For the year, the automotive industry was generally flat in terms of sales. Rising interest rates on loans, another cause for concern, are going to make it harder for consumers to afford new cars and possible auto tariffs could cut into profits for auto makers. The pessimistic outlook from dealers was made apparent from the results of the Q4 2018 Cox Automotive Dealer Sentiment Index which surveyed the responses of 1,124 U.S. auto dealers from October 24th to November 6th. In the beginning of the year, the survey for the first quarter found high expectations from auto dealers that the then recently passed tax reform bill would provide a good incentive for buyers with more money to now spend to go and purchase cars and create a strong buyer’s market by the Spring. However, those expectations (which were met in the second quarter) eventually cooled down as higher interest rates, tighter inventory levels and fears of higher prices from tariffs put more pressure on the industry. 


That pessimism now has carried over into the current year. Higher interest rates remain a top concern for dealers but now new problems are on the horizon. Changes in the way people travel like ride-sharing services are expected to result in the loss of millions of car units for retailers over the next set of years leading to the eventual end of many dealerships across the country. Some have already started to sell their automotive assets in anticipation of the future of the auto industry. Increasingly, more auto dealers are allowing online car sales to take place right from their websites which offers people the chance to skip dealerships. This allows dealers to expand their client pool and lets customers shop for anything from a new subaru for sale utah to more fuel-efficient hybrid electric cars. 


Despite the woes of auto dealers, there is a chance for forward-thinking dealers to get ahead and take advantage of the anticipated changes. By acclimating to new technology and emerging market trends, dealers can increase their sales and cut down on expenses. Marketing digitally can save dealers money their spending to sell cars and improve the shopping experiences of customers wanting to reduce the time it traditionally takes to buy a car. The forecast for 2019 by the National Automobile Dealers Association is 16.8 millions vehicles to be sold (a 1.1% decline form 2018). Dealers quick to adapt to the nascent changes in the auto industry can shield off much of the ill effects of declining market.

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