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U.S. new-vehicle sales in 2018 rise slightly to 17.27 million [UPDATE]

DETROIT — Sales of new vehicles in the U.S. rose slightly in 2018, defying predictions and highlighting a strong economy. Automakers reported an increase of 0.3 percent over a year ago to 17.27 million vehicles. The increase came despite rising interest rates, a volatile stock market, and rising car and truck prices that pushed some buyers out of the new-vehicle market. Industry analysts and automakers said strong economic fundamentals pushed up sales and should keep them near historic highs in 2019. "Economic conditions in the U.S. are favorable and should continue to be supportive of vehicle sales at or around their current run rate," Ford Chief Economist Emily Kolinski Morris said after the company and other automakers announced their sales numbers Thursday. That auto sales remain near the 2016 record of 17.55 million is a testimonial to the strength of the economy, said Mark Zandi, chief economist at Moody's Analytics. The job market, he said, has created new employment, and wage growth has accelerated. "That's fundamental to selling anything," he said. "If there are lots of jobs and people are getting bigger paychecks, they will buy more." The unemployment rate is 3.7 percent, a 49-year low. The economy is thought to have grown close to 3 percent last year, its best performance in more than a decade. Consumers, the main driver of the economy, are spending freely. The Federal Reserve raised its key interest rate four times in 2018 but is only expected to raise it twice this year. Auto sales also were helped by low gasoline prices and rising home values, Zandi said. It all means that people are likely to keep buying new vehicles this year even as they grow more expensive. The Edmunds.com auto-pricing site estimates that the average new vehicle price hit a record $35,957 in December, about 2 percent higher than the previous year. It will be harder for automakers to keep the sales pace above 17 million because they have been enticing buyers for several years now with low-interest financing and other incentives, Zandi said. He predicts more deals in the coming year as job growth slows and credit tightens for higher-risk buyers. Edmunds, which provides content, including automotive tips and reviews, for distribution by The Associated Press, predicts that sales will drop this year to 16.9 million.

PSA's purchase of Opel from GM is expected to be finalized soon

PSA's purchase of the Opel/Vauxhall division from General Motors is expected to be officially announced on Monday, according to The New York Times. PSA, the parent company of European automakers Peugeot and Citroen, will reportedly hold a joint press conference with GM in Paris to announce the deal. GM has worked as part of an alliance with PSA in Europe since 2012. The deal could be a big boon for both companies. For PSA, the addition of Opel and Vauxhall into its fold would catapult the automaker into second place behind Volkswagen for European marketshare, and would allow the company to spend research and development costs across a greater number of vehicles. And GM, which has struggled in recent years to turn a profit with its European division, would be able to focus more squarely on the areas where it's most profitable and to invest in future technologies like automation. But the deal isn't without its potential pitfalls, primarily for PSA. GM hasn't been able to make a success of Opel and Vauxhall, and it's not a sure bet that PSA will, either. What's more, the addition of Opel and Vauxhall doesn't expand PSA's reach any further into new markets, like China or India. The NYT cites data from Ferdinand Dudenhoffer, a professor at the University of Duisburg-Essen in Germany, showing that 70 percent of PSA and Opel business is done in Europe, a market that has been shrinking since 1999. We'll have to wait a few days to see exactly how the deal between PSA and GM will be structured. We're also curious to see how the loss of Opel may affect GM's lineup in the States, especially for Buick, since the company's Regal sedan is based on the European Opel Insignia. In other words, stay tuned. Related Video:

GM announces six new recalls, covering 3.5 million vehicles

General Motors has just initiated another crushingly large recall, this time affecting some 3.36 million vehicles built between 2000 and 2014 and sold in the US, Canada and Mexico. Once again, the issue surrounds the cars' ignition switches, which can be kicked out of the run position if they're carrying extra weight or if they experience a "jarring" event. In this particular case, though, GM will modify the keys, rather than the ignition itself.
A four-by-six-millimeter hole will be drilled into the key, which will more safely accommodate the weight of the key ring. As is usually the case, the work will be done free of charge. The recalled vehicles include the 2000 to 2005 Cadillac Deville, 2004 to 2005 Buick Regal LS and GS, 2004 to 2011 Cadillac DTS, 2005 to 2009 Buick Lacrosse, 2006 to 2008 Chevrolet Monte Carlo, 2006 to 2011 Buick Lucerne and 2006 to 2014 Chevrolet Impala. Only the Impala is still in production, and even then, it's only sold to fleet companies.
According to an official statement from GM, there have been eight crashes and six injuries due to this latest issue. As if this isn't a dire enough blow for GM, the company has announced five smaller recalls, covering 165,000 vehicles.