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Analysis: Economy Likely to Keep Sales Slightly Down in 2018

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Jan. 5, 2018—While the sales of new vehicles fell by 2 percent in 2017, as announced by automakers on Wednesday, multiple factors suggest the U.S. auto market might be able to avoid a significant cyclical decline in sales, Forbes has noted.

Many economists and analysts project U.S. sales to dip slightly in 2018, due to factors such as rising interest rates, and the availability of a surge of late-model used cars off leases. The National Automobile Dealers Association has forecast new-vehicle sales of 16.7 million for 2018, which would represent a 2 percent decline.

The argument for only gradual easing of U.S. auto sales in 2018 is due to a few positive factors like: accelerating economic growth, reasonable gas prices, increases in employment, and labor-market participation rates.

Also on the plus side, according to Forbes’ analysis: a continued surge by American consumers toward utility vehicles and pickup trucks and away from sedans, which tend to be lower profit. General Motors and Fiat Chrysler both plan to launch overhauled versions of their pickups, which very well could help boost overall industry profits.

 

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