TROY, Mich. — LMC Automotive has revised its forecast for U.S. auto sales for the 2016-2023 periods. The company expects nearly 250,000 fewer units will be sold each year during that timeframe, with a larger reduction occurring between 2016 and 2017.
LMC Automotive stated that its decision to revise its forecast was based on the recent plateauing of year-on-year sales growth as well as the growing economic and political risk in the United States and globally.
“Volume and growth risks in the second half of 2016 are running higher, as monthly U.S. market results will be compared to a very strong second half of 2015 and as the global economy grapples with the impact of the Brexit result and the unknown of the upcoming U.S. election,” said Jeff Schuster, senior vice president of forecasting at LMC Automotive.
For 2016, LMC Automotive cut its expected sales total from 17.7 million down to 17.4 million. This, the company stated, represents a 0.3% contraction from the record level of 17.44 million units in 2015. Retail sales made up nearly all of that reduction, bringing the firm's forecast for retail light vehicle sales down to 14 million units from 14.3 million.
Although its forecast revision seems to imply that the strong recovery and growth that the automotive industry experienced after the 2009 recession is coming to an end, LMC Automotive still expects the U.S. automotive market to remain solid over the forecast horizon. As long as the U.S. economy continues to average at least 2% GDP growth throughout the forecast period, the company said it expects volume to hold at the mid-17 million-unit level before slowly climbing past 18 million units by 2022.
“Our latest forecast now reflects the reality that the growth track that the U.S. market has been on since 2009 has stalled and appears to be leveling off, but it does not necessarily signal that further contractions or an automotive recession is imminent,” Schuster said.