Home Blog SUV Sale dip gives out strong bearish signal in the market

SUV Sale dip gives out strong bearish signal in the market

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Recently the auto industry saw a stall in growth. Especially in the case of family sedans, which have become obsolete like the flip-phones of the past. The only silver lining this industry has seen is the crossover of the sedan and off-road drive pickup trucks; the SUV.

But it is not so much to hold on as the summer sale figures tell us a different story.  Retailers are offering a lot of incentives on SUV purchase as such their inventories continue to rise. A trend that cuts the fat profits this segment offers.

Although the reports released on Friday, August 25th predicts an increase in the volume of the sale by 2%. Still, there is a slump forecasted for the segment this year. The increase is due to the fact that there is an extra selling day this year. Also, the rate of retail sales is calculated by stripping out deliveries to fleet buyers.

The slowdown in the US market is not a new thing, as analyst widely expected a seven-year growth streak to end sales plateau at roughly 17million a year for the foreseeable future.

GMC Terrain hits dealerships this summer amid high expectations. One of the four crossover SUV the auto giant General Motors Co. is launching. The Terrain’s muscular design, slick touchscreen and advanced safety gear are expected to help fetch higher prices.

Nearly, all auto makers are betting the crossover can take the place of the sedans losing favour with the American buyers. The resulting headlong results in sparking a price war.

“The industry is wildly overweight on crossovers,” John Murphy, an auto analyst at Bank of America Merrill Lynch, said in a recent presentation. The number of crossover models sold in U.S. dealerships is expected to rise to 110 nameplates by late 2020, up from 78 today, he estimated.

Incentives have shot up by 33%, with an average discount or rebate in the segment reaching $3,200.

Ford Motor Co. is currently offering a $3,500 cash rebate on the Ford Escape, along with 0% financing for 72 months.

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