“US light vehicle sales have been off to a slow start this year and will contribute to the slowdown in the overall US retail market,” said eMarketer forecasting analyst Cindy Liu. “Auto buyers remain hesitant to purchase new vehicles amid uncertainty surrounding the economy and rising interest rates.”
The auto industry—which includes sales of cars, light trucks and auto parts and accessories—represents 23.7% of all US retail sales, making it the largest retail sector. As a result, it has a large impact on the aggregate. Total retail sales in the US will grow 3.0% in 2019 to $5.475 trillion.
“Because auto represents nearly one-quarter of total US retail, any growth or contraction will have an outsized effect,” Liu said. “If we excluded auto from the equation, total retail would actually grow 3.3%, which is pretty healthy.”
As a result, the US auto market will fall from the second-highest digital ad spender to third next year. Automakers and dealers will spend $15.91 billion on digital ads this year, up 15.8% from 2018. That’s a slower growth rate than in previous years.