Auto Sales Predicted to Reach 20M in 2018

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Auto Sales Predicted to Reach 20M in 2018

Analysts are predicting that new car sales will peak in 2018 to the tune of 20 million units.

Last year, auto sales in the U.S. grew six percent to 16.5-million vehicles and was the fifth straight year that U.S. deliveries increased after hitting a 27-year low of 10.4-million units in 2009. At the Automotive News World Congress, John Murphy, lead U.S. auto analyst in equity research with Bank of America Merrill Lynch, predicted that auto sales will reach 17.3-million deliveries this year and could reach 20-million by 2018.

SEE ALSO: New Car Sales Expected to Reach 17M Next Year

After 2018, Murphy predicts that the industry will head into a sharp downturn and cautioned automakers that now is not the time to “blow” capital investing in “willy-nilly projects.” As for this year, the analyst noted that dealers’ new-vehicle stock is normal and the population of the vehicles on the road that are 11 years old and older has increased by almost 28 percent over the last eight years. As a result, many of those older cars are likely to be replaced in the coming years.

“We expect the cycle to continue for the next two years, reaching a peak in 2018 at 20 million units,” said Murphy. “That’s a lot higher than most people are expecting but we also believe there will be a very significant downturn after that.”

[Source: Automotive News]

  • craigcole

    If true this is great news for just about everyone, but I’m curious why this analyst predicts a sharp decline after 2018. Is it because pent-up demand will have been satisfied?

  • Mark S

    Is a similar growth pattern predicted in China as well? I think they were at 20 Million last year, with the US being the second largest.

  • Mark S

    It is puzzling why 2018. Maybe a host of things, demographics, average new car buying frequency, expected car reliability, gas prices and other costs of living going up. Some weirder ideas, are they predicting that many lease owners now will purchase their leases intend of returning them? Is 2018 when the next economic crisis is predicted (yikes)?

  • craigcole

    I HOPE NOT! The last thing we need is another economic recession/depression; in my opinion we’re not even out of the most recent one.

  • Mark S

    Looking at 401k’s, employment figures, house prices etc., we are either on the way out or out of the last one, but agreed it does not feel that way. Still getting job losses and stores/restaurants either closing or being sold. You do not see loads of new houses being built either.