TO THE EDITOR:
Experience has taught me to always question the conventional wisdom. As Casey Stengel once said, "Never make predictions, especially about the future." Ignoring this advice, the conventional wisdom predicts that 2020 U.S. light-vehicle sales, including fleet, will be about 16.8 million units ("U.S. new-vehicle sales to fall to 16.8M in 2020, NADA says," autonews.com, Dec. 17).
This conventional wisdom is provided by the National Automobile Dealers Association, S&P Global, IHS Markit and Statista. These forecasts rely heavily on the assumption of an ever-increasing gross domestic product, but they all ignore the historical cyclical pattern of the annual sales rate. Yes, the number of light vehicles in the U.S. grows steadily at about 2 to 3 percent per year, but annual sales volumes do not behave in the same way. History shows that, due to ever-changing consumer behaviors and trade cycles, sales peaks are always followed by valleys.
U.S. light-vehicle sales have exceeded 17 million units in all of the last five years. Is this a market peak? If so, can the market be headed for a valley? How might this affect the assumptions for the GDP? Is the automotive industry the engine or the caboose of the U.S. economy? Who really knows?
Stengel knew the future cannot be predicted, so maybe the industry and especially dealers should take heed of the historical facts and be prepared just in case the conventional wisdom is wrong.
MICHAEL McKEAN, President, Roadmaster Advisors, Hull, Mass., Roadmaster Advisors provides services to franchised dealers, including management training, business planning, litigation support, certified business valuations and private placement brokerage.