U.S. Auto Sales Continue In Plus Column, But Expected To Stall.
“Despite the growth in the market year to date, we continue to forecast U.S. auto sales down 1 per cent for 2018”
U.S. car sales are still ahead of last year’s by just over 1 per cent after two thirds of the year, but almost nobody expects the year to end in the black.
Some observers see weakness next year too.
Through August, U.S. car sales were up 1.1 per cent, suggesting annual sales of 17.4 million, but most forecasts expect the full year total to end between the high 16 millions and last year’s 17.2 million.
“The industry is clearly on the down-slope post peak. We’ll need more incentives and higher fleet mix to just stand still,” said Morgan Stanley analyst Adam Jonas.
The next couple of years look dull too.
“We forecast a drop to 16.1 million in 2019 and 16 million in 2020 potentially requiring government backed policies to prevent a steeper drop in volume,” Jonas said.
Investment researcher Evercore ISI agrees about 2018’s prospects.
“Despite the growth in the market year to date, we continue to forecast U.S. auto sales down 1 per cent for 2018 given tougher comps going forward and last year’s sales boost from the hurricanes. While auto’s fundamentals remain strong, the threat of trade wars, tariffs and China weakness weighs heavily on investors’ minds. That being said, if these concerns lift and (sales) remain at today’s levels, there may be an attractive opportunity closer towards Q4 in a seasonal rally,” Evercore ISI analyst Arndt Ellinghorst said.
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