US: study sees grim near future for auto sales image

A research coming from AlixPartners, a global business advisory firm, forecasts the current positive trend on the US new car sales market is not going to last.

The sales, after probably reaching a new record this year for post-economic crisis years, are forecasted to begin next year an accentuated slide, with the highest dip seen in 2017.
While 2014’s SAAR (seasonally adjusted annualized rate) hovers after six months at around 16 to 17 million units, the automakers recent strategies’ will be tested when they will need to make a profit from just around 12 million cars sold annually.

“The good news is the global auto industry made it through the financial crisis, recession and a whole lot of pain,” said John Hoffecker, co-president of the Americas at AlixPartners. “The bad news is what’s ahead is uncertain and unprecedented, and could be painful as well.”

The study says the recent steady yearly rise of the American auto industry has been rather unprecedented (five years of growth, just the third time it happens post World War II), which means it could actually be unsustainable. Other concern factors include the financial issues and the next generation of drivers. According to the research, the industry would be scaled back because of projected interest rates hikes and the fact that the younger generation manifests a concerted lack of interest towards car ownership.