Industry Group Predicts 16.7 Million New-Vehicle Sales in 2018
Current-year sales expected to result in slight dip from past two record-setting years, dealers association says.
The National Automobile Dealers Association estimates 16.7 million new cars and light trucks will be sold in 2018.
“Every dealer in America, myself included, would be thrilled with a seasonally adjusted annualized rate of above 16 million. Because it means that, one, the market is stable, and two, that demand is still healthy,” Mark Scarpelli, chairman of the association of car dealerships, said in a statement. “We are looking at a stable market where demand - particularly for light trucks, SUVs and crossovers - continues to be very healthy.”
Sales for 2017 are on track for 17.1 million new cars and light trucks, in line with NADA's original forecast of 17.1 million, which would mark a slight decline from the back-to-back record-setting years of 2015 and 2016, the group said in its release.
According to NADA senior economist Patrick Manzi, the vehicle segment mix will continue to favor light-truck sales and end 2017 with light-trucks accounting for nearly 64 percent of new light-vehicle sales. The light-truck market share is likely to top 65 percent in 2018, he said.
The overall economic outlook for 2018 remains strong with projected gross domestic product growth at 2.6 percent, average employment growth around 180,000 jobs per month, and the price for regular-grade gasoline at around $2.50 per gallon, the economist said.
Areas of concern include rising interest rates, increasing loan terms, and higher vehicle transaction prices, all of which will likely lead to a slower but still strong sales pace in 2018, according to Manzi.
In addition, NADA forecasts that new-car dealerships will retail 15.3 million used vehicles in 2018, compared to an expected 15.1 million used sales in 2017. The total used-vehicle market will exceed 40 million retail sales in 2018.
“The influx of off-lease vehicles returning to dealerships is likely to put pressure on new-vehicle sales,” Manzi said. “However, the mix of these late-model vehicles will favor light-trucks more than past years and should be more in line with present consumer demand.”