Wither US Automotive Sales? Uncertainties Abound


CAR’s latest automotive sales outlook forecasts U.S. light vehicle sales at 16.8 million units for 2019. The forecast includes a continuation of sales declines in 2020 down to 16.5 million units in 2021.

As most know by now, U.S. auto sales thumped most forecasts to end 2018 at 17.3 million units. However, AutoInformed notes that forecasters we respect are not as optimistic about 2019. The latest “on the other hand” cautionary signal comes from the Center for Automotive Research.

CAR notes that there are “many risks to the 2019 automotive outlook: Will 2019 be the start of the economic downturn? How will U.S. trade policies affect the auto industry? Will regulatory and technological developments start to change what products are made and sold in North America?”

CAR’s latest automotive sales outlook forecasts U.S. light vehicle sales at 16.8 million units for 2019. CAR’s forecast includes a continuation of sales declines in 2020 and 2021 down to 16.5 million units in 2021. Sales are projected to rebound to 16.8 million units by 2022 and continue an upward trend through 2025.

On the other CAR hand, it says there are a “number of positive factors that support a high level of U.S. light vehicle sales, including:

  • Projected moderate U.S. economic output growth in 2019
  • Historically low U.S. unemployment rates
  • Relatively low oil prices continue through 2020
  • Underlying nominal wage growth continues
  • High levels of consumer confidence were reached in Q4 2018, and
  • Solid new housing starts and home prices rebounding to pre-recession levels

Ah, but here comes the opposite of President Harry Truman’s unfulfilled hope – a one handed economist:

“Just as there are positives affecting the forecast,” Car says, “there are range of trends and risk factors that could drive U.S. light vehicle sales lower, including:

  • Uncertain passage of the United States Mexico Canada (USMCA) trade agreement
  • Continued imposition of steel and aluminum import tariffs – especially on Canada and Mexico, two of the largest sources of imported metals for the auto industry
  • Lingering effects from the December-January partial government shutdown and the possibility of another government hiatus
  • The potential national security tariffs that could be levied on imports of autos and automotive parts under Section 232
  • Long-term treasury yields falling to near the federal funds rate and the potential for a treasury yield curve inversion that is a leading indicator of a U.S. recession
  • Slowed global economic growth including auto sales declines in China, economic impacts of Brexit on the UK and EU, and slowing economic output in Japan, and
  • Potential impact of trade negotiations with China, Japan, EU, and UK.”

To gain more insights into the U.S. light vehicle market and what these trends mean for production and the overall North American auto and auto parts industry, join CAR for its next Industry Briefing: What’s in Store for the Auto Industry for 2019? Click here for MORE INFO or https://www.cargroup.org/industry-briefings/auto-industry-2019/

Since AutoInformed is accustomed to conducting its education in public, we bet on 16.8 million. (NADA 2019 Light Vehicle Sales Projected at 16.8 Million)

About Ken Zino

Ken Zino is an auto industry veteran with global experience in print, broadcast and electronic media. He has auto testing, marketing, public relations and communications expertise garnered while working in Asia, Europe and the U.S.
This entry was posted in economy, new vehicle, news analysis, sales and tagged , , , , , , , , , , . Bookmark the permalink.

Leave a Reply

Your email address will not be published. Required fields are marked *