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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.

Despite De Nysschen saying it won't, Cadillac cuts struggling CTS prices

Ah, well that didn't last long. Not even two years after elevating the price of the then-new third-generation Cadillac CTS by $7,000, the company is now stepping back, telling dealers it will be slashing the price of the 2015 model by anywhere from $1,000 to $3,000. It seems that there are two reasons behind Cadillac's move. First, and most obviously, are its slumping sales, down seven percent last year. That figure is made worse, Automotive News reports, by the seven-percent gain made by the greater luxury market, not to mention gains from fellow American luxury brand Lincoln. Cadillac, meanwhile, also likely faced pressure from its dealer body, which AN reports hasn't been so keen on the price increases. The price reduction is something of a surprise following statements made by Cadillac President Johan de Nysschen shortly after he took office. In September of last year, the 54-year-old exec, who took charge of Cadillac in July of 2014, defended the company's decision to raise prices, telling Automotive News a price cut was "not going to happen." It seems current conditions contradict de Nysschen's statements, though. "We're taking what we've seen are the more desirable optional features for customers and making them more readily available," Cadillac's Dave Caldwell said of the price cut. "Once a car has been on the market for a while, it's not unusual to look at the customer behavior and try to optimize for it." In what's sure to be a pleasant surprise for anyone in the market for a CTS, the most expensive models are getting the biggest price cut, with the price on the Premium and Performance Collection sedans dropping $3,000, AN reports. The 2.0T will get a $2,000 drop, while certain optional extras will now be standard on the Luxury trim, including a panoramic sunroof, navigation and Bose stereo.

Cadillac boss says small SUV 'at least four years away'

Since Johan de Nysschen's takeover as brand president, there's a lot of buzz around Cadillac. Now, the brand's leader is now giving a little more clarity about when we might see some of the company's future vehicles, including its compact crossover. "Product development life cycles being what they are, I don't have a date in mind but I would estimate it is at least four years away," said de Nysschen about a small Cadillac CUV. The comments were made to Reuters during the Washington Auto Show. The vehicle is part of Cadillac's eight-model, $12 billion reinvention through 2020. Interestingly, de Nysschen told Autoblog at the 2015 Detroit Auto Show that he estimated the compact luxury CUV to arrive by early 2018. The boss also indicated that Cadillac would get a sedan to slot below the ATS some time in 2017, and the previously spied SRX replacement, possibly called the XT5, would debut in 2016. In the meantime, the company's flagship CT6 is being unveiled at the 2015 New York Auto Show in April. The wait for a luxury compact CUV makes Cadillac one of the later entries into the segment. The space is already filling with vehicles like the BMW X1, Audi Q3, Mercedes-Benz GLA-Class, Lexus NX and Lincoln MKC. Small crossovers in general seem to still be growing in sales. While building a better brand in the US, de Nysschen also wants to grow Cadillac in Europe in the future. He told Reuters that he wants diesel vehicles ready for 2019 to appeal to customers there. Some might even be offered in the US. News Source: ReutersImage Credit: Scott Olson / Getty Images Design/Style Cadillac Crossover Diesel Vehicles Luxury de nysschen