Auto sales expected to peak at 18.2 million
Posted on Wednesday, October 14, 2015 at 10:18:22 PM
One firm projects auto sales to reach a peak in two years, after which demand for auto financing and cars will tail off due to rising vehicle prices.
IHS Automotive projects that auto sales will crest in 2017 with a high point of 18.2 million vehicle transactions. The forecasted peak will be well above the record of 17.4 million Charles Chesbrough, the IHS's senior principal economist, explained at a presentation, according to Bloomberg. If IHS's forecast is correct, sales will have risen for eight straight years by the time demand begins to curb.
Fuel-saving technologies and regulations on fuel economy and emissions will drive manufacturers to raise prices around 2017, which will cause consumers to back off of the auto market. From there, sales are expected to level off at around 17.3 million.
"Automakers will add a lot of content to be in compliance," said Michael Robinet, an IHS Automotive managing director, said according to Bloomberg. "They may even shoot for being over-compliant. That extra cost will put vehicle affordability under pressure."
Stephanie Brinley, a senior analyst with IHS, explained that demand for new vehicles is rising in part because of pending new car and truck models, the Detroit News reported. She noted 76 new models are expected in 2016, followed by 74 more in 2017.