Auto Sales Dropped in 2017, and They’ll Drop Again in 2018

The Wall Street Journal reports that auto sales dropped 1.8 percent last year:

The U.S. auto industry suffered its first annual sales decline since the financial crisis eight years ago, but a streak of strong profits is expected to overshadow a slowdown in dealership traffic….Executives have reasons for optimism as employment gains are leading to wage growth in certain pockets of the U.S. The federal tax cuts and a robust stock market could provide more spending power for people in the mood for a new vehicle.

….Still, vehicle makers are reducing North American production, including a broad pullback in the U.S., in anticipation of a softer market. North American output is expected to fall 2.3% in the first quarter, according to WardsAuto.com, a move aimed at trimming dealer inventories and lowering the supply of sedans and compact cars that are unpopular amid low fuel prices.

Here is monthly sales growth over the past five years:

The industry says it expects another 1.8 percent decline in 2018, but if this trendline continues it’s likely to be closer to a 3-4 percent decline. We’ll see.

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