The U.S. auto sales plateau has arrived.
And while the industry's good times are by no means over, the end of a six-year growth streak promises to test executives' competitive nature and incentive-spending discipline. Without rising consumer demand to mask weak lineups and bungled product launches, brands will face greater pressure to produce results and enjoy smaller margins for error.
"Now we start to see the gloves come off," said Jeff Schuster, senior vice president of forecasting at LMC Automotive. "The challenge for the brands will be to maintain their share. It's much harder now [to increase sales], but that message tends to not sit well with executives who then have shareholders to report to."
Starting in late 2009, U.S. new-vehicle sales grew for 26 consecutive quarters, the longest stretch of gains since World War II. But this year, sales declined 0.6 percent in the second quarter and 1.3 percent in the third.
In economic terms, two consecutive quarters of negative growth constitutes a recession. That's not to suggest the industry is sinking back into recession, but it does mark a major shift in the tone of the market.
Automakers have already been responding by pumping up discounts to keep showroom traffic steady. Data from the first half of September, including Labor Day weekend, indicated that incentives were on pace to break the record set in December 2008, according to J.D. Power.
"We've seen more aggressive pricing activity over the last several months," said Mark LaNeve, Ford's vice president for U.S. marketing, sales and service. "The business is as competitive as I've seen in my 32 years, but it's competitive in a very strong industry."
Unlike 2008, when incentives were soaring because demand had cratered and the Detroit automakers were losing billions of dollars, today's industry is healthy and highly profitable.
Alan Batey, General Motors' president of North America, noted that his company has intentionally cut back on fleet sales this year to focus on more lucrative retail customers, even though it meant reporting year-over-year declines in seven of nine months. GM's market share has fallen to just 16.9 percent so far in 2016, but its North American profits rose by nearly $1 billion in the first half of the year, and Batey said GM won't abandon that strategy as the market flattens out.
"We have been very deliberate about building our brands and reducing our rental-car volumes," Batey said in a Sept. 22 interview. "A lot of discipline comes from demand, frankly."
Nine months into 2016, automakers have sold 0.3 percent -- 44,502 units -- more than in the same period last year. Based on how sales are trending in recent months, most analysts now believe this year will fall just short of 2015, when the industry recorded an all-time high 17.47 million units.
Forecasts call for similar results in 2017 before the market potentially starts a downward slide in 2018, meaning sales would be at or near record levels for at least three consecutive years.
"We're still bullish that the next couple years will be -- maybe not at record levels -- but pretty darn close," Bill Fay, general manager of Toyota Division, said last week.
Hurricane Matthew's assault on Florida and part of the East Coast could make for a slow start to October, just as some new models are being launched. But moderate losses would likely be made up by year end.
Otherwise, economists say there's no noticeable downturn on the immediate horizon. Industry sales may, however, become more volatile from one month to the next as promotions come and go and consumers react to events such as next month's presidential election or eventual interest-rate hikes.
"Key economic fundamentals like a strong jobs market, rising personal incomes, low fuel prices and low interest rates continue to point toward strong industry performance," Mustafa Mohatarem, GM's chief economist, said in a statement. "We think the industry is well positioned for a continued high level of customer demand into the foreseeable future."