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NADA Economist: Continued Growth Will Lead to Sustained New-Vehicle Sales
NADA Chief Economist Steven Szakaly (click to enlarge)
NEW ORLEANS (Jan. 27, 2017) - The strong economic growth that propelled new-vehicle sales to back-to-back record years in 2015 and 2016 is on pace to continue into 2017, said Steven Szakaly, chief economist of the National Automobile Dealers Association (NADA) at a press briefing during the NADA Convention and Expo in New Orleans.
Szakaly sees sustained sales resulting from a number of factors, including positive GDP growth, an excellent employment rate, rising consumer confidence, positive equity markets and stable oil prices.
“Our baseline forecast, taking in all of the pre-election considerations, is for 17.1 million new vehicles in 2017,” said Szakaly. “That's a slight decline of about 350,000 units, but it is still a very, very strong year.”
“Fundamentally, I think consumers are at a point where the market, while not saturated, is now reaching a plateau, and that is why we are looking at sales declining" from 17.4 million in 2016 to 17.1 million in 2017, he said.
But Szakaly also laid out an alternative scenario that could see sales in 2017 and 2018 eclipse even last year's record.
“A lot has changed, particularly in Washington, D.C.,” Szakaly said. “Let's say that Trump passes all of his tax cuts and all of his infrastructure spending. That is going to be a big boost to economic growth and economic activity.”
If that happens, Szakaly said, we could “easily” see another year or two of 17.4-17.5 million new-vehicle sales.
“Obviously, the likelihood of everything getting passed is very, very low, so it will likely be some kind of mix that will have some level of positive impact on our pre-election baseline,” he said.