US dealers and analysts see new cars sales flattening image

No major jumps in new-vehicles sales are foreseeable in upcoming years, US dealers say, as they consider alternative strategies to make profit.

Since the 2008-09 recession, the new-car market in the United States has steadily risen with solid sales jumps every year, hitting record levels in 2015, when 17.5 light-vehicles were delivered. The average forecast shows sales number to be around 17.7 million units in 2016, but nationwide dealers warn that a plateau is coming and those times of strong growth have passed. Some analysts also share the same view, projecting flat figures and challenging years in the future. “You’re seven years into the recovery that began in June 2009. There’s only been one recovery in the last 50 years that’s lasted more than eight years,” Mike Issa, principal of advisory firm GlassRatner Advisory & Capital Group in Irvine, California, said to Bloomberg. “You’ve clearly reached a plateau.”

Now it is time for the dealers to focus on other ways to make money, such as used vehicles or service and parts business. “The used-car business, the finance and insurance business and the service business have not peaked, nowhere near peaked,” said Jeff Dyke, Sonic Automotive’s executive vice president of operations. “We’ve got all kinds of runway.”

This cautious approach is quite understandable throughout the industry as there are many economic uncertainties, but there are also quite a few optimistic views out there pointing that the market will be stronger than forecasted in the United States. “Everyone is below the reality,” Carlos Ghosn, the head of the Renault-Nissan Alliance, said last week at the New York International Auto Show.

Via Automotive News