After strong growth, car sales fell in August.
Major carmakers reported a drop in sales in August. The drop in sales means carmakers are unlikely to reach a record year in 2015 and could herald a slowdown in the car market.
ARI SHAPIRO, host:
Car sales have been a bright spot in the final years of the economic recovery. I’m using the word “car” because trucks and suvs now outsell cars. Car sales have been strong for seven years. Last year was a record, but the latest data, which began in August, showed a downward trend. NPR’s Sonari Glinton reports.
Sonari greenton: I will explain the car economy in about 2 minutes and 20 seconds. Are you ready? Set it. Go ahead. The first is Jessica Caldwell, senior analyst at edmunds.com. After seven years of growth, does the drop in car sales mean the good times for the industry are over?
JESSICA CALDWELL: I don’t think the good times are over. I mean, 2015 was a record year for new car sales, and we were pretty much the same. We just don’t see the big growth we’ve become accustomed to since the recession.
CALDWELL: they can move quickly to any market volatility, and they might think that’s critical because we’re not just talking about the United States, but we’re talking about, you know, the whole world is driving now, and that’s been the case for the last 10 years.
ASHKAY ANAND: my name is Akshay ANAND and I’m an analyst for Kelley Blue Book.
Greenton: anand says even the most popular vehicles – suvs and trucks – showed some weakness in August.
ANAND: I don’t think it’s going to crash all of a sudden, but at the same time, it does require carmakers to start being more disciplined – right? – because it has been a comprehensive two-digit growth period. We’ll never see it again.
Greenton: at the same time, EricLarman and truecar.com said car sales peaked, but
ERIC LYMAN: I think it’s more about industry demand. So we see that the macro picture is still very powerful. We are close to full employment. Interest rates are still low. Credit line. So the demand for cars seems low.
Stephanie brinley: frankly, the pain of the recession is so close that we still remember it was too sharp.
GLINTON: Stephanie Brinley works with IHS Automotive.
Brinley: the industry is cyclical. You know, if we have seven years of growth, it’s unusual, it’s atypical. The real problem is that if sales shrink in 2017 or 2018, the industry will grow healthily.
Greenton: ok, last analyst – last word – Julius and Smith Moore in st. Louis. Louis.
JULI NIEMANN: but the car industry is not the main driver of the economy as it used to be. This is just another consumer choice.
Neiman: the auto industry has certainly contributed a lot to economic growth, but it’s not going to get us into trouble. It follows the economy. It won’t leave the economy.
Greenton: not now, at least.
Neiman: not now.
Greenton: ok. Thank you very much.
Brinley: you bet (ph).