Mid-Year Auto Industry Report Card

auto industry

The auto industry has six months under its belt for 2016.  Many auto industry analysts assumed that there was no way the industry could repeat, or better, the record sales of 2015 when there were almost 17.5 million vehicles sold.  For the first six months of 2016, sales are up 1.4%.  Although that seems like a meager increase, if it holds through December, that will represent over 243,000 sales.  That is why the sales numbers are watched so closely.

As I have explained before, automakers live and die by market share percentages.  Simply put, no car company can control the total number of vehicles sold in a given month or year, but there are things it can do to get its piece of the pie, such as raising incentives to the customers or dealers, tweaking lease payments, or increasing production.  What is interesting this year, so far, is that there are approximately 270 different models sold, but just 30 models accounted for roughly 50% of the sales, leaving 240 models scrambling for the other half of the total market.

I have talked extensively about the current shift away from cars to SUVs, especially crossover SUVs.  However, it is pickups that continue to carry the sales load, especially for the Detroit 3.  Through June, Ford F-Series trucks have sold almost 400,000 vehicles putting it on pace for the second best year in its history.  Chevy Silverado is sitting on almost 275,000 sales, and Chrysler’s Ram brand has chalked up a little over 230,000.

In cars, the perennial #1-selling Toyota Camry is down 7% as compared to June year-to-date 2015.  Toyota Corolla is down 4%, but the new Honda Civic sales are up 20% and trail Camry by fewer than 10,000 vehicles.

In SUV and crossovers, the top three sellers are Toyota RAV4, followed very closely by Honda CR-V, and Ford Escape.  Fewer than 10,000 sales separate first and third place.

We have seen resurgence in both large and small vans with new entries from Ford and Chrysler.  Ford Transit vans are up 36% this year; Dodge Caravan is up 94% (although to be fair, this compares to a year ago when the Caravan plant was closed).  Toyota Sienna sales this year are about flat.

On the luxury side, although some people do not like the redesign of the 2016 Lexus RX, sales of it are up 12%, and takes first place in the luxury segment.  So far this year, the #2 selling luxury vehicle is a car, the Mercedes C-Class and it is down 14%, while #3 BMW 3-Series car sales are off almost 25%.

So what does all this mean?  Simply put, the vehicles that are the most popular are getting even more popular.  Sales of SUVs and crossovers prove this out.  Sales in this segment are up 8% through June, which represents 241,000 additional sales.  My first thought was that new entries in the market were fueling the big sales numbers, but that is not the case.  Fewer than 3000 sales can be attributed to SUVs and crossovers that were not available a year ago.

There are many factors that contribute to 2016 pacing ahead of 2015.  Low gas prices, factory incentives, low interest rates, a robust used car market, and a rise in leasing all contributed to the success through the halfway mark of this year.  Can the auto industry continue to find ways to increase sales over a record 2015?  I’ll let you know in January.

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