Automakers, analysts trim two thousand seventeen auto sales forecasts
Automakers and analysts are trimming two thousand seventeen forecasts for sales of fresh vehicles because of slower-than-predicted request, however many expect sales to pick up in the last half of the year.
Cox Automotive, which hosted a two thousand seventeen mid-year review in Detroit on Wednesday, estimates 17.1 million cars and trucks will be sold in the United States in 2017, followed by a drop to 16.7 million in 2018.
The forecast for this year is down Two.Five percent from a record 2016, when automakers sold 17.55 million fresh cars and trucks in the United States. Cox Automotive, which wields websites such as Kelley Blue Book and Autotrader and other companies, earlier in the year predicted sales would be 16.8 million and 17.Three million.
Analysts are predicting automakers will sell about 1.46 million to 1.48 million vehicles in June compared to 1.Five million the same month a year ago. It would mark the sixth straight month of sales declines. Automakers report June results on Monday.
Jonathan Smoke, chief economist of Cox Automotive, says two thousand seventeen sales are now in a “post-peak” period, however two thousand seventeen is expected to “end as the fifth-best year of all time.”
Affordability may be holding back some consumers from buying fresh cars, and instead they may be choosing to buy used, the company says. The average sales price for a fresh vehicle topped $34,600 through the very first five months of the year.
On Monday, General Motors Co. announced in a call with analysts it was cutting its U.S. sales outlook for two thousand seventeen from the mid-17 million range to the low-17 million range based on industry sales being down two percent through May this year.
GM Chief Financial Officer Chuck Stevens said in the call that the sales environment is “more challenging.” He said, however, that most of the sales reduction is coming from less-profitable fleet sales and that request from retail consumers remains strong and essentially plane from a year ago. GM’s sales are down one percent through May this year.
“We proceed to see strength in pricing and volume in trucks and crossovers with relative weakness in passenger car volumes,” Stevens said.
Stevens said GM expects sales to be stronger in the 2nd six months of the year than the very first, which was the case last year.
Kelley Blue Book predicts June sales to total about 1.46 million, which would be down Trio.6 percent from June 2016.
Charlie Chesbrough, senior economist and senior director of industry insights for Cox Automotive, cautioned there is no collapse in the market. “It’s just a bit of a slowdown,” he said. “We’re down, but we’re not out.”
Edmunds, another car-shopping website, and research firms J.D. Power and LMC Automotive predict June sales will be down Two.Trio percent from a year ago.
LMC Automotive expects fleet sales will be down about eight percent in the very first half of 2017. It is cutting its forecast for the year to 17.1 million vehicles, down from the 17.Two million predicted for the year just a month ago. The revision goes after other downgrades in latest months by industry trackers and Wall Street analysts as request has weakened following two straight years of industry sales records.
Edmunds this week said it is sticking to its sales forecast of 17.Two million vehicles for the year because it expects a strong economy and good deals will bolster sales in the final six months. If that rate is reached, it would mark the fourth-best auto sales year in history, Edmunds says.
Jessica Caldwell, Edmunds’ executive director of industry analysis, believes the sales tempo will pick up because automakers need to stir inventory that is higher than it was a year ago — and because the 2nd half traditionally is better for sales.
June sales typically aren’t excellent because they fall inbetween Memorial Day and Fourth of July deals, Caldwell said.
“People are indeed listening to the deal messaging,” she said.