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Southern California auto sales drop: Dip from peak or warning signal?

Editor’s note: This story has been updated with corrected sales data.

Local auto sales are off to a sluggish start to 2018 and it gets me wondering: Is this an industry-specific blip or broader bad news for the Southern California economy?

Getting a new car was the hot thing to do once the economy reversed into higher gear after the Great Recession. Southern California auto shopping hit various sales peaks back in 2015 and 2016, but in 2017 the buying pace slowed. And that sales braking has run into 2018, say reports released by the Southland Motor Car Dealers Association and the Orange County Automobile Dealers Association.

Here are seven trends to consider …

1. Double dip: In Los Angeles and Orange counties, new-vehicle purchases — measured by “retail” or non-fleet sales — totaled 167,082 in this year’s first three months. That’s down 5.6 percent from last year’s start. Sales fell 4 percent for all of 2017.

2. Bigger worry: Slowing business at auto dealerships comes amid some questions about the durability of the overall economic expansion. New jobs are still being created locally but at a slower pace in the past year. Is that skittish bosses or a shortage of qualified workers? Home sales have slowed, too, down 5 percent in Los Angeles and Orange counties vs. 2017’s first three months. Is a limited supply of residences to buy the only culprit?

3. Industry buzz: John Sackrison, OCADA’s executive director, sees his industry’s cooling as an expected dip after a string of heavy sales years. “The pent-up demand created during the recession has mostly been met,” he says, with future sales to “fall into a plateau rather than into a valley.”

4. Changing tastes: Traditional sedans are out of favor. L.A.-O.C. dealerships have sold 84,441 cars, year to date, down 13.5 percent vs. 2017. Meanwhile, drivers scooped up 82,641 new light trucks and SUVs in 2018, up 4.1 percent from a year earlier. So that means the car’s slice of local sales vs. trucks fell to 50.5 percent this year vs. 55.1 in 2017. That kind of shift in market share helps explain why Ford Motor Co. is retooling its product lineup to focus on SUVs and small trucks.

5. Southern Los Angeles County slump: Biggest sales decline in the two counties with 33,632 vehicles sold, year to date, down 7.7 percent from a year earlier after falling 5 percent in all of 2017. First-quarter car sales were 17,524, down 15 percent vs. 16,108 light trucks sold, up 2 percent. Car’s share vs. trucks? 52 percent this year vs. 57 a year earlier.

6. Central-Northern L.A. County, too: 88,736 vehicles sold, down 5 percent after being off 4 percent in 2017. Car sales were 46,018 sold year to date, down 13 percent vs. 42,718 light trucks sold, up 5 percent. Car’s share? 52 percent this year vs. 56.5 a year earlier.

7: And Orange County: 44,714 vehicles sold, year to date, down 5 percent from a year after being off 4 percent in 2017. Car sales were 20,899, down 13 percent vs. 23,815 light trucks sold, up 4 percent. Car’s share? 47 percent this year vs. 51 a year earlier.

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