2018 is going to be a bad year for the US auto market
President of United States has just approved a tax reform bill that has a positive impact on the auto industry, but many of the reputable magazines are still predicting that the US car sales will decline in 2018.
Accordingly, the Automotive News predicts that 2018 will be a bad year for the auto market. In 2017, the US auto market had sold 17.2 million vehicles, 2% less than 2016. This is the first decline since 2009, ending the longest chain of sales growth in a century. 2018 is likely to be the first time in four years that US car sales have fallen below 17 million vehicles, even though the tax reform bill the president signed last month could revive the industry.
2018 is going to be a worse year for new car sales compared to 2017
According to Jessica Caldwell, Edmunds’ Executive Director of Industry Analysis, the period of growth is over, and the market is entering a difficult period where the fight for market share is tougher. If a car company offers more incentives, the rest will follow.
Edmunds predicts that US car sales will reach 16.8 million in 2018. Last week, Cox Automotive made a similar forecast with 16.7 million vehicles, just over 100,000 vehicles ahead of prediction before the tax reform bill was accepted.
Edmunds and Cox Automotive's forecasts are not much different from Toyota’s. The Japanese automaker said sales for the whole year of 2018 would range from 16.5 million to 17 million. Meanwhile, the US’s Automobile Manufacturers Association predicts the sales will be about 16.7 million vehicles.
Charlie Chesbrough, a senior economist at Cox Automotive, predicts that consumers will paid higher interest rates in 2018. Rising interest rates will also affect profits and “hurt” both auto makers and consumers. In addition, car manufacturers have warned that President Donald Trump's approach to North American Free Trade Agreement (NAFTA) negotiations could increase costs.
Contrary to these predictions, Mark Scarpelli, the president of the Nation Automobile Dealers Association, said that all auto dealers in the US, including them, could still be happy with sales of more than 16 million vehicles. They believed in the stable segment of pickup trucks, SUVs and crossovers.
In the automotive market, which is expected to decline in 2018, hybrid cars and plug-in cars sales are likely to grow. According to Edmunds, the two models accounted for 3% of the market share in 2017 and will reach 4.4% in 2018. The forecast comes as Tesla Model 3 is starting to have enough supplies.
By: Frank Richardson