US Auto Sales Continue to Fall Even as Sales Overseas Expand

United States automakers may not be in real trouble just yet, but the trend sure isn’t encouraging. According to the Associated Press, domestic auto sales fell for the fifth straight month this year, which could send the industry into its first annual funk since the low point of 2009.


How bad is it, really? Well … GM, Fiat Chrysler, Hyundai, and Toyota all reported lower sales than this time last year. Meanwhile, Ford, Honda, Nissan, and VW said their sales were up. Of course, that wouldn’t be tough for Volkswagen, which is – finally – out from under that problematic emissions scandal that tanked domestic sales for a while.

What’s really concerning for analysis, though, is why the sales are slumping. Market watchers are saying most economic fundamentals are in good shape. Unemployment continues to fall, consumer confidence continues to rise, fuel prices have stayed relatively low, and interest rates are stable … so what gives? Why aren’t people buying cars like they had been?

Two consumer factors may be driving the downturn: people who were going to buy new already have, and many are deciding to keep their vehicles longer than they used to. This means fewer people are buying cars, and, since they’re keeping them longer, both new car sales and used car inventories are down. Fewer pre-owned cars mean that fewer people can afford to get a “new” vehicle, so they’re sticking with what they have for a while.

From a public relations perspective, what can dealerships do to keep in the black as long as fewer people are buying cars? Well, now is the time to work on relationships. Service is a huge moneymaker for dealerships, so they need to get people coming in and keep them happy while they’re there. From service contracts to extended warranties to accessory options, dealerships can keep people buying as long as they can find a way to make them loyal and keep them happy.

This will require a bit of a shift from the stereotypical reputation of car sales, shifting to a more service-oriented perspective. Hardly an impossible shift, but it’s one that not every dealership will be ready to make. Those who do will reap the benefits and put themselves in a better position for when the consumers start buying again.

And what about the manufacturers? Well, automakers are increasingly looking overseas, especially at China, for auto sales. This means understanding new markets, different consumer mindsets, and product appetites. It’s a dynamic set every automaker will have to address … chief among these dynamics is the electric question. China, especially, as well as Europe, is much more likely to want lower emission vehicles. These dynamics – lower demand in the U.S. and higher demand in areas more concerned about emissions – may just create an electric car boom on all three continents. It will be interesting to watch all this play out.

Robert Gillings is an award winning writer, producer, actor architectural designer, philosopher and financial consultant.