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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.

GM seeks to exempt Buick Envision from U.S. auto tariffs

General Motors is seeking an exemption to a 25 percent U.S. tariff on its Chinese-made Buick Envision sport utility, the automaker said on Thursday, in a move to prevent the key model in the brand's U.S. lineup from becoming a victim of the U.S.-China trade war. The midsize SUV, priced starting at about $35,000, has become a target for critics of Chinese-made goods, including leaders of the United Auto Workers union and members in key political swing states such as Michigan and Ohio. The Envision, assembled only in China, last year accounted for about 19 percent of Buick brand sales in the United States. GM said in a statement that it filed the request on July 30 with the U.S. Trade Representative. An official notice was posted on Thursday on the regulations.gov website, which is tracking requests for exclusions from the so-called Section 301 tariff on certain imported goods from China. GM, the largest U.S. automaker, argued in its request that Envision sales in China and the United States would generate funds "to invest in our U.S. manufacturing facilities and to develop the next generation of automotive technology in the United States." GM said the "vast majority" of Envisions, about 200,000 a year, are sold in China. About 41,000 were sold last year in the United States. Because of the lower U.S. sales volume, "assembly in our home market is not an option" for the Envision, which competes with such midsize crossover vehicles as the Jeep Grand Cherokee and the Cadillac XT5. GM has taken other steps to soften the blow of tariffs, which hit just as the automaker had lowered the price of the Envision to make it more competitive. Ahead of the July 6 start for higher import tariffs, GM shipped in a six-month supply of Envisions at the much lower 2.5 percent tariff rate. Envision sales from April through June plunged to just 7,000 vehicles, while inventories climbed to more than 13,000 vehicles at the end of June. At the current sales rate, the Envision supply should be enough to keep many dealers stocked through the end of the year. GM had lowered prices by as much as $2,500 on the 2019 models, which it started shipping in late April. That means Buick's 2,000 U.S. dealers should have lower-priced Envisions to sell well into the fall. "The previous price point was too high" on the 2018 Envision, said Casey Clark, sales manager at Serra Buick GMC Cadillac in Washington, Michigan, in an interview.

GM applies for 'Enspire' trademark for the second time

When we wrote about the Buick Enspire concept debut in China earlier this year, we said "we wouldn't be surprised to see either an all-new crossover, or a redesigned current model, sporting the designs seen on this concept." Now it appears General Motors might be planning to go with Option A. GM Authority discovered a trademark application for the name "Enspire," to be applied to "Automobiles, excluding motor homes." This is the second time GM filed for the name, the first being in 2015. As always, applications don't mean certainties. However, we know Buick has a range of new models in development, it's losing the LaCrosse sedan and its crossovers sell quite well. If there's to be a new vehicle called Enspire, it shouldn't be hard to guess what kind it would be. GMA's previous investigations picked up clues that there'll be two new Buick crossovers, one about the size of the China-sourced Envision and sitting on the E2 platform that supports the Cadillac XT4, Chevrolet Malibu, and Buick Regal. Based on data in an IHS Automotive document, the site said the putative Enspire's platform code is E2UB, the U for utility vehicle, the B for Buick. The other crossover would sit above an Envision, below the Enclave, on the short-wheelbase C1 platform employed by the Cadillac XT5. We can probably take the Enspire concept's design cues as a preview of the future, if not its electric drivetrain. Designers carved the wide, formidable stance with curved and elongated versions of traditional Buick brand cues, such as the grille crossbar stretching into the headlights. A futuristic, art-filled and screen-heavy interior contrasts with genuine wood, and is probably best not to look at because Buick couldn't bring anything like it to production. The electric drivetrain included a 550-horsepower electric motor and enough battery to power a 370-mile range. Those figures seem a little outlandish given the potential price tag and the Buick badge. Besides, GM has other plans for a dedicated EV powertrain in development that should bow around 2021, and a Buick EV based on the Chevrolet Bolt's BEV II architecture. As such, a conventional powertrain seems more likely for an Enspire crossover, at least initially. The same IHS Automotive document said the E2UB vehicle would go into production in Shanghai in late 2019.