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Why optimism is up in the auto industry despite lower January sales

Phoebe Wall Howard, Detroit Free Press on

Published in Automotive News

Also, automakers are selling high-margin SUVs and pickup trucks in droves.

"What people want is choice, which is why our three-truck pickup strategy is perfect for the market – midsize, half-ton and one-ton: Chevrolet Colorado, GMC Canyon, Chevrolet Silverado and GMC Sierra," Cain said. "Having a broader portfolio lets you sell to the commercial buyer, small business owner, farmer and rancher, do-it-yourself suburban household and sports enthusiasts. Some people two big toys and some haul heavy loads."

While auto industry sales slipped compared with January 2017, companies reported strong sales of trucks and crossovers.

Honda and Toyota maintained their roles as dependable choices for cars as consumers gravitated to the new Honda Accord and Toyota Camry.

Overall, Fiat Chrysler saw a significant drop in sales while General Motors and Ford reported flat numbers. The launch of the popular Jeep Wrangler and Ram 1500 are expected to carry the day for FCA in coming months.

The average vehicle transaction price of $36,270 for light vehicles was down in January 2018 from December 2017, but up from a year ago.

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GM saw an average transaction price jump of 4 percent from January 2017 with the help of GMC's redesigned Terrain. And the redesigned Enclave carried Buick to a 5 percent higher transaction price. Ram trucks and Jeeps pushed Fiat Chrysler to a 4 percent average price increase in January as sales of the Jeep Compass climbed.

The shifting sales mix to trucks and sport utility vehicles has been dramatic, and as volume shifts away from cars, the average vehicle price ticks up, said Tim Fleming, analyst for Kelley Blue Book.

"There was a glimmer of hope in the midsize car segment, thanks to the newest generations of the Toyota Camry and Honda Accord," he said. "These well-received new models, along with the redesign of the Nissan Altima due later this year, will test how much demand still exists for sedans."

New car prices went up $1,360 or nearly 4 percent from January 2017, while dropping $486, or a little more than 1 percent from last month, according to Kelley Blue Book analysts.

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