LMC Automotive has cut its initial sales forecast for the US new light-vehicle market, for now to anticipate a slight contraction compared with 2015 record levels.
Following a disappointing May, June saw a 2.4 percent increase in new cars and light trucks volumes in the United States. Despite the mixed sales results in the last couple of months, analysts and automakers have previously said they still expected the market to hit another record at the end of the year. However, LMC Automotive just changed its perspective based on the recent plateauing of year-on-year sales growth, combined with some economic and political risks in the US and globally. Therefore, it revised its forecast for auto sales in the US for 2016 to 2023, expecting an average contraction of 250,000 units each year. For 2016 though, the estimate was cut by 1.7 percent or 300,000 units to 17.4 million from the initial view of 17.7 million units. This would mean the market to return 40,000 fewer light vehicles than the record level of 17.44 million units in 2015, which would mark the first volume sales drop since the 2009 recession.
“Our latest forecast now reflects the reality that the growth track that the US market has been on since 2009 has stalled and appears to be levelling off, but it does not necessarily signal that further contractions or an automotive recession is imminent,” Jeff Schuster, Senior Vice President Forecasting at LMC Automotive, said.
According to Mr. Schuster, growth risks in the second half of 2016 are running higher because it will be tough to match the strong results from the same-period of last year, while “the global economy grapples with the impact of the Brexit result and the unknown of the upcoming US election.”