Automotive consulting firm AutoPacific announced its forecast for 2017 U.S. light vehicle sales. Down approximately 200,000 units from 2016 sales, AutoPacific forecasts 2017 will see 17.4 million units sold.
"We are simply seeing a plateau of demand following years of recovery after the recession," explains Ed Kim, AutoPacific Vice President of Industry Analysis.
Key Forecast Drivers
According to the Federal Highway Administration, there were approximately 214 million licensed drivers in the United States in 2014, of which 20 percent were age 65 and older. Kim cites these numbers as a contributing factor to the 2017 forecast.
"Older Baby Boomers, who currently make up a significant portion of the new car buying population, are increasingly moving to fixed incomes following retirement, reducing the number of miles driven, and consequently choosing to hang on to their car longer, which removes them from the new car buying market," Kim said.
Additionally, Kim notes the growing numbers of consumers, particularly younger ones, who are relying on ride sharing services for their transportation needs.
"While most consumers who use ride sharing services also own a vehicle, the need or interest in purchasing a new vehicle will likely decline in the coming years for some," says Kim. "Furthermore, autonomous ride sharing vehicles have the potential to further challenge the traditional vehicle ownership model as they are deployed in growing numbers in the coming years. As their numbers grow and hailing a ride becomes even faster and cheaper, an increasing number of people may choose to subscribe to access to transportation, rather than purchase or lease a personal vehicle."
The U.S. is also in the throes of an administration change. "The impact of the Trump administration is too early to determine," says Kim. "Shorter term, there may be some shakiness in consumer confidence, but the impact of that is likely to be minimal and relatively short, and does not impact the 2017 forecast."
The Right Formula
AutoPacific's first quarter forecast for year-end sales has proven to be exceptionally accurate over the years. With forecast accuracy of 98 percent in 2016, AutoPacific achieves a 10-year average accuracy of 95 percent.
"Years ago, AutoPacific correctly predicted growth in smaller CUVs coupled with a decline in sales of smaller cars," says Kim. Unique to AutoPacific's methodology is the combination of economic factors and consumer data collected by AutoPacific's annual survey of new vehicle buyers, the New Vehicle Satisfaction Study. AutoPacific's survey provides current voice of the consumer data designed to understand what automotive brands, segments and powertrains consumers want. "AutoPacific's combination of industry experts who focus solely on automotive and our knowledge of the consumer, allows us to balance the economic and industry factors with real-world insight."
