On the bright side, used car sales have a good forecast.
According to a new report from Automotive News, 2018 could see new US car sales falling below 17 million units for the first time in four years. The evidence of this decline has already appeared in 2017's end-of-year figures. For example, vehicle sales, totaling 17.2 million this year, is about 2 percent less than in 2016. Interestingly, this is the automotive industry's first yearly sales decline since 2009, which was during the heart of the recession.
In order to try to counteract another slow year for new car sales, automakers may have no choice but to offer discounts and keep dealership inventories in check. Translation: don't overproduce. "That period of growth that we had grown accustomed to is obviously over, and the industry is starting to rightsize," said Jessica Caldwell, executive director of industry analysis at Edmunds. "We could see a fight for market share. They're looking to keep their share, and if one company starts increasing their incentives, generally others follow." According to Edmund's 2018 sales forecast, a total of 16.8 million new vehicles will be sold. Comparatively, Cox Automotive forecasts 16.7 million.
But thanks to the Trump Administration's tax reform bill, Cox predicts used car sales will reach 39.5 million. That higher figure will be due to customers turning in vehicles at the end of their lease. "The additional spending power that most households will have due to tax reform should result in a continued 'move up' in what consumers purchase," Jonathan Smoke, Cox Automotive's chief economist, stated. Meanwhile, the National Automobile Dealers Association projects 2018 sales of 16.7 million. "We are looking at a stable market where demand - particularly for light trucks, SUVs and crossovers - continues to be very healthy," said NADA Chairman Mark Scarpelli.