U.S. auto sales to peak at 17 million-plus in 2016 or 2017
Hard as it may be to believe as auto sales keep climbing, two sales forecasts see light vehicle sales topping out at 17.4 million to 17.6 million in 2016 or 2017.
NADA predicts sales of 17.2 million in 2015 and peaking at 17.6 million in 2016. The previous record was set in 2000, when dealers sold 17.4 million.
Starting in 2017, NADA chief economist Steve Szakaly sees sales falling as millennials start to eclipse baby boomers as the biggest group of buyers.
If you look at spending power and income, millennials are poorer and have more debt than boomers, Szakaly said. They graduated into the global financial crisis, meaning little to no wage growth. They have lots of college debt, and they are just starting off in the working world.
A retiring baby boomer new vehicle buyer has accumulated wealth and makes on average $80,000 a year compared to the average millennial, who makes $44,000 and has $20,000 of debt, he added.
IHS Automotive puts peak sales higher and a year later, forecasting 18.2 million in 2017. The company sees sales of 17.3 million in 2015 and 17.8 million in 2016.
Why the slowdown in future years, other than the rise of millennials? Credit will become tighter, as is already happening. The Fed will finally raise interest rates. And NADA says used-car prices will drop by 4.5 percent in both 2016 and 2017, making a used vehicle seem like a more appealing alternative to many new-car shoppers.Download Bulletin PDF