The new year always brings new opportunities based on the overall economic climate, consumer confidence levels, gas prices, miles driven, average vehicle age, the profile of vehicles on the road, and the list goes on.
With so many variables in the mix, I’m honing in on a few notable industry insights, and providing a few takeaways, that shed positive light on our industry.
U.S. light vehicle sales were 17.1 million units in 2018, according to IHS Markit — that’s down from 17.2 in 2017 and 17.6 in 2016. However, over two down years, the import vehicle share of total new vehicle sales grew — from 55% in 2016 to 56% in 2017.
According to IHS Markit, imports maintained that 56% share in 2018 and are projected to continue that pace over the next five to six years.
Import nameplates also shine when taking at look at U.S. Light Vehicles in Operation (VIO). Currently at 46%, import share of VIO is projected to reach 49% in 2023, according to IHS. So, in just five short years, almost half of all light vehicles on the road will be imports! This represents a huge uptick from just 16 years ago, when import VIO was only 28%.
More import brands on the road racking up miles translates into a revolving supply of import vehicles for you to service, for many years to come.
Also providing a boost to our industry will be a surge in lease returns, according to the Edmunds 2019 Forecast and Trends Report.
Jessica Caldwell, executive director of industry analysis for Edmunds, explains “Since we reached ‘peak lease’ in 2016, more than 4 million consumers are expected to turn in their vehicles and come back to the market in 2019, which will have a major impact on new vehicle sales.” The caveat, however, continues Caldwell, is that these shoppers are coming back to a very different market and most of these people won’t be able to buy a similar new vehicle for a comparable price.
“On average, new vehicles are $3,000 more expensive now than they were three years ago, and car shoppers can expect to pay nearly $1,800 more in interest over the course of a five-year auto loan,” Caldwell explains.
With so many import brands and models on the market touting highly stylized customization packages and industry-leading technology, driver assistance and safety features, import nameplates will have quite the lineup to offer drivers looking to get into a new vehicle.
Here’s to a successful and prosperous New Year!