New vehicle sales in the United States are expected to drop next year as higher interest rates and rising prices could prompt consumers to hold off plans to buy a car or light truck, the National Automobile Dealers Association said on Thursday.
The dealership trade group estimates sales of 16.8 million light vehicles in 2019. If that happens, it would be the first time since 2014 that U.S. new-vehicle demand falls below the 17-million mark.
"If incentives continue to go down and interest rates go up, it will put tremendous pressure on consumers with rising monthly payments," NADA Chairman Wes Lutz said in a statement. "The level of interest rates moving forward will be a wild card."
Auto sales have benefited from President Donald Trump's overhaul of the U.S. tax code that put more money in the hands of the consumers.
"We're not going to have that again in 2019," NADA senior economist Patrick Manzi said. "That's one of the main reasons we're expecting new vehicle sales to fall off slightly."
NADA's forecast for 2018 U.S. sales was 16.7 million light vehicles.
U.S. light-vehicle sales fell in 2017 after seven straight annual gains but deliveries have climbed 0.4 percent to 15.695 million this year through November, driven by higher fleet shipments.
The seasonally adjusted annualized sales rate has topped 17 million nine out of eleven months this year, and barring a collapse in the market in December, sales are on track to top 17 million for the year.
David Phillips contributed to this report.
