US: auto sales forecasted to rise until 2017 image

American love for new autos is not expected to peak before 2018 and the rally is expected to continue for another couple of years, with deliveries reaching more than 18 million units.

The slowdown is expected to occur after 2017 as new fuel saving and emissions reduction technologies would be introduced, lifting prices of new vehicles and impairing demand, reckons research firm IHS Automotive. Charles Chesbrough, the firm’s senior principal economist, believes the new vehicle sales in the US, the second largest auto market in the world, would hit 18.2 million cars and light trucks in 2017, which is way more than the previous all time record of 17.4 million set in 2000. If the IHS forecast turns out to be accurate, the US auto market by that time would have posted growing figures for eight consecutive years. The economist added in a presentation on Wednesday the slowdown would not be massive, but would actually settle in the area of this year’s envisioned selling rate of 17.3 million through around 2022.

“Automakers will add a lot of content to be in compliance,” comments Michael Robinet, an IHS Automotive managing director, about the implications of the new, stricter thresholds for fuel economy and vehicle emissions taking effect during the coming decade. “They may even shoot for being over-compliant. That extra cost will put vehicle affordability under pressure.” Auto sales have been fueled by the continued availability of cheap credit, improving economy and relatively low gasoline prices. But the new standards taking effect would have automakers introduce numerous new technologies, lifting the prices to recover their investments.

Via Bloomberg