A 1.6 percent decline in U.S. new-vehicle sales in the first quarter isn’t overly concerning for the National Automobile Dealers Association.
NADA, which represents more than 16,500 U.S. new car and light-truck dealerships, on Wednesday maintained its U.S. sales forecast of 17.1 million vehicles for the year, which would be a 2.5 percent decline in sales compared with the record 17.5 million sold in 2016.
NADA Chief Economist Steven Szakaly on Wednesday said there are “some headwinds overall” in 2017, but “moderate” economic growth and an expected tightening in financing and interest rate hikes aren’t enough to deter sales from remaining above 17 million for a third consecutive year.
“What we’re looking at is still a very strong year,” he said on a conference call with news media. “As far as the new-car part of the business, we are still very optimistic.”
The overall U.S. economy is expected to grow in 2017, with a projected 2.6 percent growth in gross domestic product and job growth of 150,000 to 180,000 a month.
Szakaly said an expected tightening of credit for the year is expected to negatively impact sales by 100,000-175,000 units, which was factored into the association’s original forecast.
“Consumer demand for new vehicles continues to be very strong,” said NADA Chairman Mark Scarpelli, whose dealership group holds Chevrolet, Kia and Chrysler-Jeep-Dodge-Ram franchises in the Chicago area. “Right now, it looks like we’re looking in a very positive direction.”
Szakaly said that positive direction is expected to continue for the foreseeable future, with no sign of “sales collapsing any time in the next two, three years.”
NADA’s 2017 sales forecast is in line with many analysts’ expectations. Autotrader and Kelley Blue Book forecast sales in the range of 16.8 million-17.3 million vehicles for this year, which would represent a 1 to 4 percent decrease from 2016. Edmunds.com is within those expectations with a forecast of 17.2 million.
LMC Automotive is among the more optimistic with a forecast of 17.6 million for the year, which would mark a 0.1 percent increase over last year and the third consecutive year of record sales.
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