NADA: Auto sales will peak at 17.46 in 2016
U.S. new auto sales will keep climbing from 17.2 million this year and peak at 17.46 million in 2016, said NADA Chief Economist Steven Szakaly at a recent conference in Michigan. He predicts 16.65 million sales in 2017.
Employment is doing very well, which is critical to new-and used-car sales, and we expect gasoline prices to remain low, Szakaly says.
NADA forecasts that new-car dealerships will retail a total of 31.77 million new and used vehicles in 2015, an increase of 3.3 percent from 2014.
But Szakaly said the generational shift in car buying demographics could present challenges to long-term growth in auto retailing.
It will take four millennials to replace the spending power of one baby boomer in the auto retailing marketplace, he said. The wage gap between baby boomers and millennials, stagnating wages for millennials, increasing vehicle transaction prices caused by regulatory requirements, and an expected increase in interest rates will pose long-term challenges for the industry.
Weêre talking about the industry having to make trade-offs, and those trade-offs tend to be in terms of profitability and in terms of revenue, Szakaly told reporters, according to the Detroit News.
If the industry wanted to sell more units, it could use more incentives.
I certainly hope our industry learned something from the financial crisis and the bankruptcy of two automakers, Szakaly said.
Speaking at the same conference, past NADA Chairman Forrest McConnell talked about the higher vehicle prices that fuel economy requirements will bring.
The government estimates it will cost us an increase of $3,200 to the average price of a car, McConnell said, according to TheDetroitBureau.com. Thatês an increase that new-car buyers will have to pay up front.Download Bulletin PDF