U.S. auto dealers expect 2017 new-vehicle sales at 17.1 million

on Jul9

After a record 17.55 million cars and light trucks were sold in 2016, the U.S. auto industry has posted lower sales every month this year, with high consumer discounts and inventory levels posing concerns for Wall Street.

DETROIT — U.S. sales of new vehicles should come in around 17.1 million units in 2017, the National Automobile Dealers Association said on Thursday, especially if automakers bring high inventory levels under control.

In a media conference call, Steven Szakaly, chief economist for the dealer organization, said sales should dip to 16.8 million units in 2018 and then be within a range of 16.5 million to 16.8 million through 2020.

After a record 17.55 million cars and light trucks were sold in 2016, the U.S. auto industry has posted lower sales every month this year, with high consumer discounts and inventory levels posing concerns for Wall Street. Deliveries are off 2.1 percent through June.

After the weaker first-half results, some automakers and analysts have trimmed their outlook for new-vehicle sales in 2017. Some analysts were also counting on a revised tax code and other economic relief under a Republican-controlled Congress and President Donald Trump to provide a lift to U.S. sales in the second half, though those projections now face longer odds. 

A glut of nearly new, low-mileage off-lease vehicles is expected to also pose a challenge to new-vehicle sales.

Sales of sedans have been particularly weak as consumers have increasingly shifted toward pickup trucks, SUVs and crossovers. Szakaly said consumer discounts are focused heavily on the less-popular models.

“We do expect incentives to rise this year, especially as off-lease (sales) begin to exert further downward pressure on sedan pricing throughout the rest of 2017,” he said.

Tackling high inventory levels should help automakers meet NADA’s sales forecast, Szakaly added.

“If we see inventories level off into September and throughout the third quarter, I think it will be a very strong sign that the industry has made the right decisions … and we should easily make our 17.1 million sales number,” Szakaly said.



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