New-vehicle sales may dip in 2020, Cox Automotive Chief Economist Jonathan Smoke says, but dealers should still expect strong results.
"There's no question the U.S. economy is slowing," Smoke said here Saturday. Cox Automotive forecasts U.S. new light-vehicle sales of 16.6 million this year. That compares with sales of 17.1 million in 2019.
The projected decline is largely in fleet sales, Smoke said, meaning "we actually think this is going to be a pretty good year for retailers."
Vehicle demand remains "fairly solid," Smoke said. "The issue is more affordability."
Challenges related to rising new-vehicle prices will continue to push some consumers to the used-vehicle market, he said. The bright side for dealers is that even as new-vehicle sales ebb, "they're going to make up for it in used-vehicle sales," Smoke said.
Smoke projects a 25 percent chance of a recession beginning this year.
"So unless you're a really paranoid person, it's not likely to happen in 2020," he said. "But we've got all of these wild cards from the [coronavirus] to the election to continued trade wars. Remember, there are threats still coming from the White House for Europe and Japan. And all of those things could really change our industry pretty dramatically."
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