Global Car Sales Pace Expected to Slow Again This Year

The pace of worldwide sales of new cars and light-duty trucks will climb only 2% to 97.6 million units this year, down from rates of 3% last year and 4% in 2016, LMC Automotive predicts.

Virtually all major markets are being led by expanding demand for SUV/crossover vehicles, automotive forecasting chief Jeff Schuster tells the LMC-Oxford Economics Global Automotive Outlook conference in suburban Detroit. SUVs now account 45% of the industry’s new or refreshed models.

In the U.S., SUVs were the only market segment to expand through the first four months of 2018. Schuster says an 8% increase in U.S. crossover sales nearly offset declining demand for midsize cars (-12%), pickup trucks (-2%), minivans (-4%) and sporty cars (-2%). Overall luxury vehicle volume was flat, as a 3% gain in luxury SUVs balanced a 3% drop in deliveries of sedans.

The short-term sales outlook is clouded by uncertainty about trade policy, regulations and fuel costs. Schuster estimates that a collapse of the North American Free Trade Agreement could cut annual sales by as much as 750,000 units, putting some assembly plants at risk. If implemented, the White House’s threatened 25% import tax on cars from the European Union would shrink the U.S. car market by 150,000-200,000 units.

In the longer term, Schuster says 2% compound annual growth in car sales—fueled by emerging markets—will push global car sales to 114.4 million units by 2025. That trend could lead to 135 million annual sales by 2050. Or perhaps not. Schuster notes that the unknown impact of autonomous vehicles, ride-sharing options and traffic congestion could dramatically impact the numbers.