NADA: 16.94 million sales in '15
Automakers likely will sell nearly 17 million cars and trucks in the U.S. next year, helped by lower and stable gas prices and an improving economy, the chief economist for the National Automobile Dealers Association said Monday.
NADA Chief Economist Steven Szakaly said he predicts U.S. car and light truck sales will hit 16.94 million in 2015, up 3.3 percent from the 16.4 million sales the association targeted for 2014.
Szakaly, in a call with reporters Monday ahead of the NADA/J.D. Power Western Automotive Conference in Los Angeles, said he added 200,000 to 250,000 sales to his forecast with the lower gas prices, which he expects for all of next year.
"We're expecting that strong segment shift away from cars and back into small sport-utility vehicles and pickup trucks," he said, adding he expects automakers will offer higher incentives on small and compact cars next year.
For 2015, Szakaly predicts light trucks will account for 54 percent to 55 percent of the U.S. market and could reach as high as 57 percent given the stable gas price forecast.
Szakaly said he expects automakers will offer more sales incentives on compacts and small cars as people shift back to trucks and SUVs because of lower gas prices. He's also forecasting low double-digit growth next year for luxury sales.
The 2015 forecast is a bit higher than what Szakaly told The Detroit News earlier this year. In July, he said he thought sales in 2015 would be close to 16.8 million for 2015. In 2013, U.S. auto sales rose 7.6 percent to 15.6 million.
Szakaly expects the U.S. economy to continue to improve, with gross domestic product expected to grow at 3.1 percent next year and employment to increase by an expected 242,000 new jobs on average each month in 2015. He expects jobs growth will help disposable income to rise 2.5 percent next year.
NADA, which represents about 16,000 dealerships, expects a healthy level of sales in November and December this year. U.S. auto sales through October have totaled about 13.71 million vehicles, up 5.5 percent year-to-date.
For sales to rise above 17 million next year, Szakaly said several things would need to happen: higher incentives, more purchases by shoppers in their 20s and early 30s, more people returning to the labor market and a rise in incomes and wages. The industry's auto sales peak was 17.4 million sales in 2000.
"It's possible for us to see growth above 17 (million), but everything needs to go exactly right in terms of the U.S. economy and global economy," he said in a call with reporters Monday.
But Szakaly expects 2015 will be "the beginning of a plateau of sales," though he expects sales to remain in the 16.5 million to 17 million range for 2016. For the long term, he said the U.S. auto market is capable of staying around or above 16.5 million.
Szakaly said his 2015 forecast assumes interest rates remaining low. He said the prediction also could be affected by macroeconomic concerns such as slow gross domestic product growth in Europe and slowing GDP in China, though Szakaly said he doesn't expect they would derail U.S. economic growth.
Szakaly said a rise in interest rates in the U.S. could slow construction of new homes and cut into sales of trucks.
Many automakers and analysts won't give their full-year forecasts for 2015 until January. Earlier this year, Adam Jonas of Morgan Stanley predicted sales to hit 17 million next year and John Murphy of Bank of America Merrill Lynch Global Research said sales could hit 18 million by 2018.