By on February 23, 2015

Bill Colwell Ford Dealership

Happy days are back again for automakers selling to the United States, with auto sales projected to rise through 2017 before dipping slightly through 2020.

According to The Detroit Bureau, a study by AutoPacific found that consumers bought 16.4 million vehicles in 2014, a 6 percent increase over 2013. Further, the group predicts 2015 sales will hit 17 million, peaking at 17.24 million in 2017.

Per AutoPacific industry analysis vice president Ed Kim, the boom is fueled by both “continued increases in truck and SUV sales,” and the rapid growth of compact crossover sales among mainstream and premium brands. Combined, such sales would make up 55 percent of the overall U.S. market this year.

As for the aforementioned downturn beginning in 2018 and going forward through 2020, Kim cites rises in interest rates, Millennials waiting to purchase their first vehicle, and extended loan terms as factors in the upcoming decline. He adds that despite this, sales are likely to bottom-out at 16.8 million by the start of the next decade, 60 percent better than the 10.4 million vehicles sold in 2009 during the early days of the Great Recession.

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16 Comments on “Study: US Auto Sales To Rise Through 2017, Modestly Decline Through 2020...”


  • avatar
    CoreyDL

    That dealer does a good job of not parking the cars too close together, or attempting to jam too many cars onto the lot. All of them in nice spaces, equidistant from one another.

  • avatar
    wmba

    Well, if we all made a buck each from every prediction gone wrong made by a jumped-up automotive sector analyst/self-proclaimed expert, who wouldn’t know a decent car if it ran over them, we could all retire to a lovely chalet with a pleasant view, servants, a decent rocking chair and the time to ponder.

    Bertel Schmitt used to track the predictions of the better known ones here on TTAC. I’m so uninterested I can’t be bothered looking Kim up to see what his track record is. He won’t be correct anyway, it’s too far in the future. Really makes you wonder why they bother flapping their gums, not that a soul will hold them to account. It’s just self-aggrandisement and promotion.

    • 0 avatar
      highdesertcat

      Exactly my sentiments. It’s a bit too early to forecast sales for the US with the insecurity of a national election looming in Nov 2016. Both the 2008 and 2012 election results had major implications for the US auto industry, some good, others not so good.

      Just because now is the ideal time to buy that new car or truck (for all sorts of reasons) doesn’t make it so in 2017. There are still too many unknown variables at this time. Too many what-ifs.

    • 0 avatar
      TW5

      The point of forecasting is to vet the underlying structural economics. If analysts understand the economic forces at play, companies can develop business/investment strategies.

      Wall Street demands accurate forecasts because they can package and sell predictions to the common investor or investment firm, but that’s not really the point.

      If millennials delay purchases, interest rates rise, loan terms handcuff current buyers, and variation in product mix stagnates; few people will complain if sales turn out to be 17.5M rather than 16.8M vehicles.

  • avatar
    John

    Ed Kim: “Because subprime financing worked so well for real estate!”

  • avatar
    Jeff S

    Few would have predicted the mortgage crisis and economic meltdown of 2008. Anything can happen between now and 2017. In reality the ideal time to buy a new vehicle is when things are bad, granted that you have a job and / or can afford to take advantage of a bargain. That is what I did in the Summer of 2008.

    • 0 avatar
      bd2

      Actually, was totally predictable (even an LA Times reporter sold his house and rented and apartment before the bubble burst) due to the shenanigans that Wall St., hedge funds, and the mortgage industry was engaged in doing at that time.

      • 0 avatar
        George B

        bd2, if Wall St, hedge funds, and the mortgage shenanigans caused the housing bubble, why did some areas have boom and bust while in other areas house prices just increased with inflation?

        http://en.wikipedia.org/wiki/United_States_housing_bubble#Extent

        Seems to me that home owners in some areas with a shortage of land for houses speculated on prices going up forever and got caught over leveraged.

        • 0 avatar
          ect

          Real estate markets are subject to a variety of local factors, so they will seldom behave uniformly.

          The article you cite looks like it was written several years ago, and it’s in Wikipedia.

          The US economy went into recession in Q4-2007. I recall reading articles in early 2008 noting that the default rate for mortgage loans made in 2006 was pushing 12% – which is an extraordinary number, especially coming so soon into the life of the debt.

          Bear Sterns went broke because it was too heavily positioned in residential mortgage debt. Ditto Lehman Brothers – whose fall precipitated the almost-collapse of the global economy.

          There was definitely a housing bubble, and the explosion of too-easy-to-get mortgage debt, spurred by demand from Wall St. for packaged debt it could securitize, was a major contributor.

          • 0 avatar
            ect

            Type in haste, make mistakes. The sentence should read

            “I recall reading articles in early 2007 noting that the delinquency rate for mortgage loans made in 2005 was pushing 12%…”

            Research should be done first, not last…

    • 0 avatar
      BrunoT

      Any economist of the Austrian school would have. And did.

  • avatar
    Jeff S

    Most thought the good times would go on and that housing would just continue to go up in price. Few knew how much money was tied up in the housing bubble.

  • avatar
    BrunoT

    People have been trying to forecast economics forever and they’re right only by chance. Way too many variables at work to know the market 5 years from now.

  • avatar
    Joss

    Should help trend to cleaner emissions & reduced road deaths.


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