Economists Not In Agreement That Auto Sales Boom Is Over
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Economists in early-August were mixed on if U.S. auto sales have hit their peak, just when a downturn is expected to drive sales lower.
Sean McAlinden, Chief Economist for the Center for Automotive Research expects U.S. auto sales will set a record 17.7 million sales this year — up from a record 17.47 million in 2015 — but sees reason to be concerned. McAlinden said he is worried about a significant slowdown that could cut sales by nearly a third in the next few years. This is following historic patterns of the past four downturns in the U.S. that averaged sales cuts of 29 percent. He cites flattening new housing starts, increasing student and auto loans and record-high leasing of vehicles, which in a few years will flood the market and push car resale values downward.
General Motors Co. Chief Economist Mustafa Mohatarem, though, has not pulled back on his forecast for U.S. auto sales and expects the good times to keep rolling. He said fundamentals of the U.S. economy are very strong and that sales have not yet plateaued.
Mohatarem in June told reporters he expected U.S. light- and heavy-duty sales in 2016 would reach 18 million. When factoring out about 400,000 heavy-duty sales, GM is planning for light vehicle to set a record at about 17.6 million. He said on August 2 that the underlining fundamentals of the U.S. economy are very strong, pushing his optimism for growing sales for longer than some of his industry counterparts.
Sean McAlinden, Chief Economist for the Center for Automotive Research expects U.S. auto sales will set a record 17.7 million sales this year — up from a record 17.47 million in 2015 — but sees reason to be concerned. McAlinden said he is worried about a significant slowdown that could cut sales by nearly a third in the next few years. This is following historic patterns of the past four downturns in the U.S. that averaged sales cuts of 29 percent. He cites flattening new housing starts, increasing student and auto loans and record-high leasing of vehicles, which in a few years will flood the market and push car resale values downward.
General Motors Co. Chief Economist Mustafa Mohatarem, though, has not pulled back on his forecast for U.S. auto sales and expects the good times to keep rolling. He said fundamentals of the U.S. economy are very strong and that sales have not yet plateaued.
Mohatarem in June told reporters he expected U.S. light- and heavy-duty sales in 2016 would reach 18 million. When factoring out about 400,000 heavy-duty sales, GM is planning for light vehicle to set a record at about 17.6 million. He said on August 2 that the underlining fundamentals of the U.S. economy are very strong, pushing his optimism for growing sales for longer than some of his industry counterparts.
Jeff Schuster, Senior Vice President of Forecasting with LMC Automotive, is predicting flat U.S. sales of 17.4 million this year.
A sales slowdown could be of significance to fleet as the segment would provide a level of sales certainty to manufacturers, which in turn might foster pricing incentives for fleets to change up their vehicle pools.
