ARLINGTON, Va.—Total vehicle sales increased in December to a rate of 17.6 million annualized units. NAFCU Research Assistant Yun Cohen attributed the boost to interest rates on auto loans, which fell for the second straight month.
"However, headwinds are increasing for the auto market," Cohen said in a NAFCU Macro Data Flash report. "Affordability has worsened recently due to higher average transaction costs and reduced incentives from manufacturers, and borrowing costs are also expected to rise further in 2019."
Car sales fell from 5.4 million to 5.3 million annualized units during December; sales of light trucks increased from 12.1 million to 12.2 million annualized units. Monthly sales levels were up 1% from a year ago.
Results among the largest automakers were mixed. Fiat Chrysler Automobiles sales were 14.3% higher than a year ago, followed by Nissan (+7.6%) and Honda (+3.9%). Ford reported a year-over-year sales decline of 8.8% in December, followed by Toyota (-0.9%). General Motors, which only releases quarterly sales reports, reported a 2.6% decline in the fourth quarter.
For all of 2018, Cohen noted that sales totaled 17.3 million units, which was a slight improvement over 2017 and the fourth consecutive year of at least 17 million vehicles sold.
"Demand exceeded expectations during the year, driven by a strengthening labor market and fiscal stimulus," Cohen said, but added that demand will decrease as benefits from the tax cut fade.