Economists of the National Association of Auto Dealers have recently predicted auto sales across the US auto market are heading to a new high level through next year, though the younger “millennial” generation could pose a challenge.
Following the end of the last financial recession, US auto sales have grown continuously for six straight years (2015 has no chance of turning up negative) and will continue to climb to a new record high of 17.46 million units next year, according to Steven Szakaly, chief economist of the National Automobile Dealers Association. He made the forecast while attending a panel at the Center for Automotive Research’s annual conference near Traverse City, Michigan. His economists did warn the limit would probably come from the diminished purchasing power the “millennial” generation has exhibited so far. Szakaly also said the US auto sales in 2017 could reach just 16.65 million vehicles – making a rather steep drop from the 2016 forecast. “It will take four Millennials to replace the spending power of one Baby Boomer in the automotive-retailing marketplace,” also commented Szakaly. “There’s also a wage gap between Baby Boomers and Millennials, and stagnating wages for Millennials, along with increasing vehicle-transaction prices, will pose challenges in the long run.”
On the up side, employment is now healthy – and the indicator is crucial for new and used car sales – while gasoline prices are also not expected to surge in the near future. Forrest McConnell, the former NADA chairman for 2014, also warned the increased regulatory scrutiny equals higher costs and its impact is seen across product pricing strategies.