Auburn Hills, Mich. — 2018 marked the fourth straight year U.S. light vehicle sales were above 17 million units, but auto industry analysts are predicting a slowdown due to ongoing trade tensions, tariff uncertainty and a changing market.
The U.S. sales forecast for 2019 shows a dip to 16.8 million units, according to the Center for Automotive Research in Ann Arbor, Mich. The nonprofit organization, which held an industry briefing Feb. 20. at French auto supplier Faurecia's North American headquarters, is forecasting a brief flattening of sales — 16.5 million in 2020 and 16.4 million in 2021 — before a steady recovery up to 17.3 million in 2023.
"There are a lot of positive factors that are supporting a very high level of sales that remain fairly flat and at a good plateau even with the dip," said CAR's Kristin Dziczek, citing moderate economic growth in the United States for 2019, low unemployment rates and oil prices, high consumer confidence and nominal wage growth.
But Dziczek, vice president of industry, labor and economics, said when the auto industry has a record year, everyone takes a deep breath and braces for an imminent recession.
"It's the recession coming. It's going to hit next. When is the next shoe going to drop here?" she said. "We think very negatively."
Joe McCabe, president and CEO of AutoForecast Solutions LLC, told attendees that when long-term and short-term treasury bonds converge, the odds increase for a recession. He said rates converged in late 2018 and early 2019, indicating a recession for early to mid-2020.
His firm also predicts a slowdown in U.S. light vehicle sales, with forecasts pointing toward a 2 percent decline in sales for 2019. Though McCabe doesn't expect the magic number — as in 17 million units — to return until at least 2024.
"We basically see a softening, but not this massive cliff that maybe some from economic positions are taking, more of a doom-and-gloom," he said. "We think that we're hopefully learning lessons from before."
Other presenters at the briefing included IHS Markit's Mike Wall, Cox Automotive's Michelle Krebs and General Motor Co.'s Elaine Buckberg.