Auto industry closes out 2019 with record-high transaction prices, incentive spending

This is a developing story. We will continue to update this as more automakers report their 2019 results.

Year-end sales figures began trickling in early Friday, with initial reports suggesting that the U.S. auto industry’s seasonally adjusted, annualized rate will remain above 17 million, but fall short of last December’s 17.6-million unit pace. 

Despite yet another year of rapid growth at Ram, FCA reported a 2% fall in U.S. auto sales in the fourth quarter, hurt by slowing sales of its aging Jeep and Dodge sport utility lineup. The company’s Charger and Challenger continued to fare well despite a sales landscape otherwise hostile to traditional two- and four-door cars. 

Speaking of Ram, FCA’s pickup finished 2019 on a serious high note, up 18 percent vs. 2018 with more than 633,000 units sold. This put it firmly ahead of Chevrolet’s Silverado (575,600 units combine between light, medium and heavy duty models) but well short of eclipsing General Motors‘ total full-size volume. With GMC Sierra sales included, GM moved 807,923 large pickups in 2019. 

Hyundai managed to end 2019 relatively flat, which amounts to a success story for the automaker which had stagnated for years as its sedan-heavy product mix pushed customers to brands with healthier mixes of crossovers and SUVs. The introduction of the Hyundai Kona and Palisade (along with a redesigned Santa Fe) has buoyed the company back into line with the rest of the industry.

Hyundai’s luxury subsidiary, Genesis, has also bounced back aggressively after a dismal 2018, when the restructuring of its dealer network cost it almost all of its retail channels. The rebuilt dealer network moved more than 21,000 cars in 2019 — double its 2018 total. 

Toyota, like the rest of the industry, finished the year down approximately 2%. Strong performances from the new RAV4 and the aging Land Cruiser did not offset the drops in volume from many of its other core models, including just about every sedan in the Lexus lineup. Corolla sales remained strong, likely thanks in part to conquest sales from domestic automakers, which have abandoned the compact segment.

Tesla met its gales goal for 2019 (albeit on the lower end) after carry-forward sales and its efforts to ramp up international distribution hit its numbers early in the year. The Silicon Valley automaker also managed to hit a record-high share price despite calls of doom and gloom early in 2019. The company’s 2019 deliveries totaled more than 367,000 — up 50% from 2018. 

As sales volumes have struggled, automakers have resorted to greater and greater incentive spending in order to move metal. According to Automotive News, some automakers are pushing record discounts to clear inventory. BMW, Daimler and FCA topped December’s incentive spending; always-plucky Subaru offered the least. This will continue to offset climbing transaction prices, which are now sitting above $36,000.