DETROIT -- Economists and industry leaders predict another robust year of U.S. new-vehicle sales, even if most see 2017's total falling short of last year's record 17.5 million cars and light trucks.
"If this is a plateau, as some have called it, it's got a helluva view," said John Mendel, executive vice president of American Honda Motor Co.
Most forecasts see sales in a range of 16.8 million to 17.5 million, with the wild cards that will determine the final number being incentives, interest rates, the appeal of new technology in vehicles and, more than anything else, President-elect Donald Trump.
Many observers see sales rising as a Trump administration and Republican-controlled Congress cut taxes, ease government regulations and create jobs by funding infrastructure improvements.
Trump's impact could go beyond adding jobs and boosting consumer confidence. National Automobile Dealers Association President Peter Welch said a Republican-led government provides a window for dealers to push for fewer regulations, keeping new vehicles affordable and further fueling consumer demand.
Mark Scarpelli, NADA's 2017 chairman, said leaders in the Trump administration have said they will be pro-business and limit regulations. "We are very hopeful," he said. Scarpelli, who co-owns Raymond Auto Group, of Antioch, Ill., said early meetings with members of Trump's team show they are willing to listen to NADA leaders.
But industry leaders worry about a Trump-sparked trade war, particularly with Mexico and China. Trump has talked about imposing a 35 percent tariff on vehicles from Mexico.
Linda Hasenfratz, CEO of supplier Linamar Corp., noted that parts from the U.S. cross into Mexico to make those vehicles. In fact, she said, parts can go back and forth across the border seven times before the vehicle ends up in a U.S. showroom. The implication: If Mexico retaliated in a trade war, the overall impact on U.S. jobs could be negative.
Bank of America Merrill Lynch analyst John Murphy, who anticipates U.S. sales peaking at about 18 million vehicles in 2018, said the Trump administration's protectionist trade policies also could hurt companies' balance sheets this year, even as his economic policies could stimulate auto demand.
"A border tax adjustment could create a lot of problems for earnings," Murphy said. "Not necessarily crush demand, but it could create a lot of pressure on earnings and cash flow."
NADA Chief Economist Steven Szakaly predicts 17.1 million sales this year unless "we get all those tax cuts and infrastructure spending, then we'll see another 17.4 or 17.5 million year."
Mark Schienberg, president of the Greater New York Automobile Dealers Association, said, "There's a little apprehension with the new administration and what that's going to mean." Even so, he said, New York-area dealers expect sales to be stronger in 2017 than 2016, due to a robust housing market there, low interest rates and cheap gasoline.
Perhaps the boldest forecast comes from UBS analyst Colin Langan, who predicts 17.8 million sales in 2017 based on early economic indicators including expected growth in gross domestic product.
Penske Automotive Group Inc. Chairman Roger Penske told Automotive News he expects 2017 U.S. new-vehicle sales to be in the "high 16 million or 17 million" range.
He is banking on premium luxury brands -- which account for 72 percent of the group's sales -- doing well as many of those automakers roll out redesigned products, have strong captive finance arms and are "quickly" adjusting production to meet a high demand for trucks, he said.
