Smoke cautioned that the first-half growth came primarily from fleet sales, while the retail market was flat despite increased incentives.
"Those are conditions that tell us both OEMs and dealers are seeing margin declines, and therefore this behavior can't continue indefinitely," he said.
Industry experts forecast overall U.S. light-vehicle sales this year will come in just under 17 million units, which would be the second consecutive decline following a seven-year growth streak that was capped by a record 17.55 million vehicles sold in 2016.
This year's growth, as in recent years, was driven entirely by sales of SUVs, pickups and crossovers. Car sales fell 12 percent through the first six months of the year to 2.75 million, while light trucks grew 10 percent to nearly 5.9 million, according to the Automotive News Data Center.
Incentives increased 5.7 percent in the second quarter to more than $3,700 on average per unit sold, Autodata Corp. reported. ALG reported that incentives last month accounted for 11.4 percent of the $33,148 average transaction price of a new vehicle, up from 11 percent of $32,931 a year ago.
Heading into the back half of the year, Jeremy Acevedo, manager of industry analysis at Edmunds, expects a small sales decline in the third quarter, and more tapering off to end the year.
The market is "virtually saturated," he said, noting that the U.S. has nearly 1.3 registered vehicles for every licensed driver. "Add to that record-high vehicle prices, rising interest rates and historically high numbers of people who owe more than their cars are worth, and the stage is set for a market contraction."
The rising cost of vehicles combined with the impact of trade rifts could begin to price some consumers out of the new-car market, said Charlie Chesbrough, Cox senior economist and senior director of industry insights.
"It's safe to say in general that the tariffs are going to be bad news for the automotive industry," he said. "It's hard to look anywhere and say these are going to be helpful, at least in the near term, with the exception of maybe the used market somewhat."
Cox estimates such tariffs — the White House has threatened tariffs of up to 25 percent on imported vehicles and auto parts — could knock 1 million to 2 million units off U.S. vehicles sales. Those losses could widen if a global trade war erupts, according to Chesbrough.
Jeff Schuster, LMC's senior vice president of forecasting, similarly cautioned that a trade war involving vehicles would be "devastating to sales volume" in the U.S. and other key markets.
General Motors, which has warned that broadly applied tariffs would hurt the industry and trigger job losses, remains optimistic about the health of the industry moving into the second half of 2018.