NADA forecasts record 17.7 million sales in 2016
As if last yearês record-setting auto sales werenêt enough, NADA has forecast a follow up record for this year, projecting sales of 17.7 million new light vehicles. That would mark a 2 percent increase from 2015 and the seventh straight year of auto sales growth.
We are living peak auto sales right now, and we will see one more year of that growth in 2016, said chief economist Steven Szakaly, but only because of rising incentives that will keep consumers coming into showrooms. The real worry now is whether weêre starting to pull sales ahead from future years.
Automakers are expected to increase incentives this year to manage increased manufacturing capacity and to offset the effects of a slowing global economy, especially in emerging markets such as Brazil and South Africa, Szakaly said.
If we were looking at a market with stable global growth and no increases in manufacturing, auto sales might actually fall in 2016, he added. But we have a situation where plants have been built, demand is slowing and the U.S. market remains the most profitable in the world.
Sustained sales momentum in 2016 also depends on auto financing rates remaining competitive, interest rates rising less than 1 percentage point by the end of the year, wages growing about 2.5 percent, and the economy adding more than 2 million net new jobs.Download Bulletin PDF