Long-term trends to siphon off sales, NADA economist says

SAN FRANCISCO -- Steven Szakaly, NADA’s chief economist, today reiterated his forecast of 16.9 million U.S. light-vehicle sales in 2015.

In explaining why his prediction remains below 17 million, in contrast to some more optimistic analysts, he delved into some of the long- and short-term trends that are siphoning off sales.

Among those trends:

• Telecommuting. In 1979, effectively nobody with a corporate job could work from home. Today, a little more than 2 percent of the population doesn’t need a car to commute.

• Baby boomers -- who’ve been avid car-buyers -- are aging out of the workforce.

• More folks are using public transit. In 2007, 4.7 percent of Americans did. In 2013, that edged up to 5.3 percent. A 0.6-point gain may not seem like much, but consider the context, Szakaly said. In every economic downturn, more people decide to take the bus, just to save money. Then they go back to driving when the economy recovers. This time, though, even as the recovery gained steam, the number using public transit has stayed stable.

• Vehicle miles traveled continues to decline from a peak in 2004.

• Fewer new-car buyers. Only about 5 percent of the population will buy a new vehicle this year. If that rate was at the same level as in the 1970s, “we’d sell 19.5 million” this year, he said.

• Gen Y has been delaying marriage and child-bearing -- one of the major drivers of vehicle purchase.

• In terms of young people’s spending, “We’re competing against student loans.”

None of these trends alone are enough to weaken car sales significantly, Szakaly said. But cumulatively, they’re a drag on sales.