Auto Sales Strong Even With Slight Dip in 2017

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Auto Sales Strong Even With Slight Dip in 2017
Market Share For Top 10 Selling Models In L.A. County (Year-to-date through November)

It looks as though 2017 will be the year new car sales end their long, hot run in L.A.

Buyers registered about 470,000 new vehicles in Los Angeles County with the Department of Motor Vehicles over the first 11 months of 2017, according to the most recent data available.

That was a 5 percent decrease from the approximately 496,000 that they registered for the same period the year prior, according to data published last month by the Greater Los Angeles New Car Dealers Association, which represents factory-franchised dealers.

The dip was greater in percentage terms than a decline seen nationally, where new car sales declined about 2 percent to 17.1 million in 2017 from 17.5 million in 2016, according to data from Edmunds.com and the National Automobile Dealers Association, a trade organization based in Tysons, Va.

Sales of light trucks and SUVs increased in both the county and nationally, said Bob Smith, executive director at Greater Los Angeles New Car Dealers Association.

Smith added that used car sales increased slightly.

Auto dealers were largely satisfied with the big picture, in any case.

“17 million is a really solid number [nationally], even if we’re off 3 to 5 percent,” said Smith.

Nick Cardin, general manager and vice president of Puente Hills Toyota in City of Industry, said he expected 2017 sales to track closely with 2016. The company ranked No. 22 on the Business Journal’s Auto Dealerships list with 2016 revenue of $154 million.

Trucks, SUVs

A combination of decreased gasoline prices and improvements in mileage drove consumers to light trucks and compact SUVs last year.

Registrations of light trucks increased 6.5 percent locally while passenger cars dropped 12.5 percent, according to the L.A. New Car Dealers’ report.

“Tacomas went absolutely bonkers,” said Cardin, talking of the Toyota Motor Corp. pickup truck model. “(Toyota) finally met the demand by increasing capacity at its plants. We actually have cars on the ground now. A year ago, Tacomas sold the minute we got them off the truck.”

Cardin added that there was strong demand for Toyota’s RAV4 and seven-seat Highlander SUVs, as well. Both the RAV4 and Tacoma, which made it into the top 10 selling models locally, saw increased sales from 2016 to 2017.

Car manufacturers have improved mileage since the time when such vehicles were seen as gas guzzlers, Cardin said.

The flip side was that sales of hybrids and electric vehicles remained flat at around 6 percent of L.A. County’s total market, following a similar trend line to 2016. That was below the approximate 8 percent market share those vehicles had in 2015.

Federal and state subsidies had helped set off the cost of such vehicles in the past, Cardin said. He estimated that hybrids and electric vehicles cost between $4,000 to $6,000 more on average than traditional vehicles.

“Dealers sell what the consumer wants,” said Smith. “The convenience of gas over electric wins.”

Sales of Toyota’s hybrid Prius declined approximately half a percentage point to about 2.2 percent, according to the report.

The top 10 selling cars were all from Japanese manufacturers, including Honda Motor Co., Toyota and Nissan Motor Co., which collectively held 52 percent of the market, slightly up from 51.2 percent the year prior. Brands from European companies and the Detroit Three each took about 20 percent, while Korean brands had the lowest share at 7.8 percent.

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