The automotive industry in both the US and UK markets have posted considerable declines last February. The markets have different reasons for the slump, but experts say further declines are expected in the months to come.
US auto sales decline
New vehicle sales have seen a 2.4% drop the past month compared to the year prior (2017). According to USA Today, the reason behind the drop is Americans’ loss of appetite for passenger cars — compact cars, sedans, and full-size cars. More and more users are preferring crossovers, SUVs, and pickups. Interestingly, the latter have shown increased sales, but these were not enough to affect the entire sales market.
“Automakers are slowing production of passenger cars to react to declining demand,” Edmunds executive director of industry analysis, Jessica Caldwell, explained.
“[They] are also trying to find the right balance between keeping sales strong and becoming too dependent on costly incentives.”
Another reason for the drop in new car sales is the growth of the used-cars market. More and more people are looking into lightly-used vehicles, especially with services like VINZ and similar companies offering users pre-purchase inspection.
“The used-car market was very strong, and I think that’s probably part of what drove most manufacturers to be down this month,” Nissan sales executive Judy Wheeler told USA Today.
While the decline continues, experts say the numbers are still not enough reason to worry. They expect the auto sales market to remain strong throughout the month.
Diesel car sales drop in UK
The Society of Motor Manufacturers and Traders shared that February posted a decline of 2.8% in new car registrations. While February is a slow month for car sales, 2018’s numbers were still lower than that of the previous year. So far, since the start of the year, the decline is now at 5.1%.
The trade body attributes the drop to the low demand for diesel cars, posting a 23.5% slump. Petrol and hybrid and electric cars saw a surge by 14.4% and 7.2%, but it was not enough to offset the diesel drop.
The SMMT still believes that this year’s numbers are still healthy. However, it expects further drops and a two-year crash in the wake of Brexit.