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US Auto Sales Decline, Ending Record Streak

12 January 2018

Despite posting weaker sales in December, automakers sold a record 2.038 million new vehicles in Canada in 2017 as more drivers opted to purchase SUVs and trucks over passenger cars.

US auto sales fell 2 percent to 17.2 million in 2017, according to Autodata Corp.

Canada sold 302,826 vehicles in 2017, up 13.3 percent over the previous year, the company said, contrasting with sales in the much bigger US market where the Cadillac maker recorded a fall of 1.3 percent. Fiat Chrysler reported a decline of 8 percent compared with 2016. Toyota Motor Corp.'s RAV4 was the leading sport utility vehicle for the first time and joined Nissan Motor Co.'s Rogue crossover in outselling all passenger cars in what was a bleak year for sedans.

Honda's U.S. sales rose 0.2% for the year to 1.6 million.

Investors were happy that General Motors had cut its stock of unsold vehicles - an issue for the market earlier in 2017 - at the end of December to 63 days supply unsold vehicles, beating its target of around 70 days supply. Nissan's sales last year also came in at 1.6 million, a 1.9% increase from the prior year. They also say consumers turned to used cars.

Toyota Canada recorded its best sales year ever in 2017, bolstered by record hybrid, truck and Lexus vehicle sales.

Analysts predict new vehicle sales will decline even more this year.

"In 2017, we had solid GDP growth and good news on employment, wages and consumer sentiment, which helped deliver very strong retail sales for the auto industry", said Mustafa Mohatarem, GM's chief economist.

Its GMC brand saw December sales jump 47.4 per cent when compared to last year, and reported its best year ever, with a 15.1 per cent sales increase from 2016. But most other automakers saw declines. GM reported a less dramatic monthly drop than analysts expected, as sales of the Chevrolet Silverado climbed 25%. The company's Acura luxury division fell 12.2% in December and 4.2% for the full year.

"We're likely to see most of the decline in the marketplace occur within the auto side of the business, as opposed to the light truck segment", he said.

While industrywide sales for the year were down compared to the year ago results, pricing numbers on the vehicles sold were encouraging. Volkswagen's dropped 19 percent.

"Average transaction prices closed the year on a strong note, rising almost 2% in December 2017 to set a record high", said Tim Fleming, analyst for Kelley Blue Book.

US Auto Sales Decline, Ending Record Streak