New car sales stagnate but automakers still profiting: Report

(NewsNation) — New vehicle sales in the U.S. are expected to stall at around 16 million units this year as consumers reel from sticker shock, inflation, high interest rates and fuel prices that have surged with the war in Iran.

And yet automakers are not concerned over the projected 2026 sales level — a slight decrease from the 16.2 million autos sold last year — because car makers are selling pricier vehicles, including trucks and SUVs, to wealthy purchasers, The Wall Street Journal reports.

“I don’t want to say automakers are OK with this level of sales, but they kind of are,” Ivan Drury, an Edmunds automotive analyst, told the paper. “It’s not like back in the day when they’d be hacking away at the price to lift sales.”

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The average price of a new auto has climbed to $50,000, up from $34,000 a decade ago. In 2016, new car sales reached their modern-day zenith, with nearly 17.5 million units sold, thanks to lower interest rates and aggressive incentives offered by auto companies.

Those days have vanished, WSJ reports, with many car owners opting to buy used vehicles (also expensive) or trying to keep their current autos running. The average age of a light vehicle in the U.S. has risen to 13 years currently from 9 years in 2000 as consumers on tighter budgets are squeezed out of the marketplace.

Lower-cost alternatives for new car buyers are in the pipeline but aren’t expected to hit dealerships for some time.

In the 21st century, new car sales hit their lowest point in 2009, during the Great Recession, with 10.4 million units sold that year.

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