While automobile sales are still expected to continue to rise over the next few years, Auto analysts predict that the pace of growth will slow down further in 2015.
U.S. auto sales are on pace to rise 5 percent in 2014 to 16.4 million — the best performance since 2006 — after rising by nearly 8 percent in 2013. The consensus is “cautious optimism” as production and sales will grow far faster in Asia, while Europe and South America face significant economic concerns.
LMC Automotive senior vice president Jeff Schuster said at a Standard & Poors auto industry conference that it predicts sales will rise just 2 percent next year to 16.7 million — fueled by 100 new, refreshed and redesigned vehicles being introduced in 2015, including Ford’s new aluminum F-150.
LMC sees U.S. sales rising to 17 million by 2018. LMC predicts the market will rise to 17.5 million in 2020 — which would represent the highest ever U.S. auto sales. Auto sales were above 16 million between 1999 and 2007 — hitting a high of 17.4 million in 2000.
JD Power notes that U.S. consumer spending on new cars and trucks will break a record in 2014 — estimated at $407 billion — up from $376 billion in 2013 — as average transaction prices have risen dramatically to $30,000 this year — up from $26,560 in 2007. U.S. retail sales in 2014 expected to be 13.8 million vehicles is near an all-time record, with incentive spending up slightly in 2014 at $2,975 over 2013 when it was $2,834.
This year’s spending is more than the gross domestic product of Austria, said Joe Derkos, director of consulting and analytics at J.D. Power.
Automakers keep introducing new models. LMC says automakers will hike the number of U.S. models offered from 295 this year to 331 in 2018 — with 75 new nameplates expected through 2018 — along with 200 redesigns and 210 facelifts. As a result, the average number of vehicles sold per model will fall from 55,463 this year to 51,728 in 2018, LMC said. Biggest growth through 2018 will be in small luxury cars and small luxury SUVs.
But 2018 sales of 17 million will be more profitable than sales in 2006, since there will be fewer rental car and other fleet sales in 2018 than 2006, LMC says.