Auto execs don't see an end to high sales
Posted on Friday, January 15, 2016 at 11:57:08 AM
Despite murmurs of doubt from some corners, domestic auto executives have reaffirmed their belief that low oil prices aren't going anywhere fast, meaning that global demand for new vehicles - light trucks and SUVs in particular - is here to stay.
The Wall Street Journal reported that oil fell below $30 a barrel for the first time since 2003 this week, right around the time auto manufacturers were coming together for the North American International Auto Show in Detroit. While there, executives stuck by their robust predictions that demand and auto financing would make more record sales possible in 2016.
"Our forecast assumes low oil prices," Bob Shanks, Ford's chief financial officer, told the Journal in an interview. "As we look forward, we expect [oil prices] to be low for longer, but do expect overtime that they'll gradually recover to more normalized levels."
Amidst the strong declarations of confidence, however, comes a report from MarketWatch that automakers cut back on production somewhat in December. Citing data from the Federal Reserve, the site described how auto companies scaled back by 1.7 percent at the end of 2015. That follows a 1.5 percent drop in November.
Still, the auto industry had their best sales year since 2000 last year, and with gas cheap and the job market growing, evidence remains that 2016 could be another banner year.