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CAR: US light-duty vehicle sales to dip in 2019

The Center for Automotive Research’s (CAR’s) updated automotive sales outlook forecasts US light-duty vehicle sales at 16.8 million units for 2019. CAR’s forecast includes a continuation of sales declines in 2020 and 2021 down to 16.5 million units in 2021.

CAR projects sales to rebound to 16.8 million units by 2022 and continue an upward trend through 2025.

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US Light Vehicle Sales, 2015-2018, and CAR’s Forecast, 2019-2025

CAR said that a number of positive factors support a high level of US light vehicle sales, including:

  • Projected moderate US economic output growth in 2019;

  • Historically low US unemployment rates;

  • Relatively low oil prices continue through 2020;

  • Underlying nominal wage growth continues;

  • High levels of consumer confidence were reached in Q4 2018; and

  • Solid new housing starts and home prices rebounding to pre-recession levels.

However, just as there are positives affecting the forecast, there are range of trends and risk factors that could drive US light vehicle sales lower, including:

  • Uncertain passage of the United States Mexico Canada (USMCA) trade agreement;

  • Continued imposition of steel and aluminum import tariffs—especially on Canada and Mexico, two of the largest sources of imported metals for the auto industry;

  • Lingering effects from the December-January partial government shutdown and the possibility of another government hiatus;

  • The potential national security tariffs that could be levied on imports of autos and automotive parts under Section 232;

  • Long-term treasury yields falling to near the federal funds rate and the potential for a treasury yield curve inversion that is a leading indicator of a US recession;

  • Slowed global economic growth including auto sales declines in China, economic impacts of Brexit on the UK and EU, and slowing economic output in Japan; and

  • Potential impact of trade negotiations with China, Japan, EU, and UK.

Comments

HarveyD

Many of the positive and negative (weighted) factors used may or may never happen, making those predictions less valuable. An after DT economic downfall and continued rise of the China economy could change all 13 factors used.

The after 2022 predicted rise could be delayed and /or replaced with further downfall years. ?

Lad

Economists are also worried that 7 million are over 3 months behind in their auto loans:
https://www.sltrib.com/news/nation-world/2019/02/12/record-million-americans/

They should be worried since 400 families, of the 1%, have more money than the lowest 150 million people in our economy; and, the current administration has increase the nation's debt to record levels, with a "tax cut" that is proving to be a tax increase for those in the shrinking U.S. middle class.

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