In 2018, look for a second descending year in vehicle sales, surging electric car inventory, auto swapping and maybe a self-driving car roaming the area.
A compilation of automobile trackers forecast a so-so 2018 uplifted by breakout technologies and novel ways that people buy sedans, pickups, sports cars and crossovers.
Leading auto trade group the National Automobile Dealers Association predicts sales of 16.7 million new car and light trucks — including SUVs and crossovers — in 2018. That's down from an expected 17.1 million deals this year, which in turn was the first year-to-year drop since the early 2010s. Auto sales set record highs in 2015 and 2016.
NADA is upbeat because the transaction dip is slight and shows the market isn't headed for a free-fall.
“We expect 2018 to be a robust year,” said NADA Chairman Mark Scarpelli live on CNBC, according to the dealers association.
“Every dealer in America, myself included, would be thrilled with a seasonally adjusted annualized rate of above 16 million,” Scarpelli said later. “Because it means that, one, the market is stable, and two, that demand is still healthy.”
In early December comments, the association's senior economist, Patrick Manzi, said buyers will continue to be drawn to light-trucks, likely to top 65 percent of passenger sales in 2018.
A strong economy should bolster sales: the projected gross domestic product growth will hit 2.6 percent, average employment is primed to rise 180,000 jobs a month and the price for regular gas will average $2.50 per gallon, he said.
Factors that could hold back sales include climbing interest rates, increasing loan terms and higher vehicle-transaction prices.
“The influx of off-lease vehicles returning to dealerships is likely to put pressure on new-vehicle sales,” Manzi said. "However, the mix of these late-model vehicles will favor light-trucks more than past years and should be more in line with present consumer demand,” he said.
NADA foresees new-car dealerships selling 15.3 million used vehicles in 2018, compared with 15.1 million used deals this years. The total used-vehicle market will exceed 40 million retail sales in 2018, according to the dealership association.
According to a mid December article in the Detroit News, “Next year will be a watershed year for electric and self-driving cars, analysts believe, even as overall sales continue to slip.”
California-based industry analyst Edmunds predicts the market share for electric vehicles will top 4 percent for the first time in 2018. The totals include forecasts by Tesla chief executive Elon Musk of 5,000 more moderately priced Model 3 sedans per week manufactured by March 2018, a full year of sales for the all-electric Chevrolet Bolt and steady performance from the electric Nissan Leaf, analysts said.
The U.S. auto industry's best year for new vehicle sales was 2016 with 17,550,000 cars and trucks sold. According to the Detroit News, “Some doubt the U.S. auto industry will ever surpass that record. Ride-hailing services, subscription rental services like GM’s Maven, shuttles – in addition to demographic shifts – will all chisel away at sales.”
Morgan Korn writing on ABCGo.com listed the five biggest trends to watch for in 2018, including:
1. Car sales
Auto transactions next year will be “OK but not great,” Dave Sargent, vice president of global automotive at J.D. Power, told ABC. He predicts automakers will offer alluring perks to bump up activity. Scores of new SUVS and crossover utility vehicle models are set to arrive in 2018. “If an automaker’s lineup is heavily sedan, it’s a very uncomfortable place to be,” Sargent said. “Consumers are leaving this segment in droves.”
Even though SUVs can be more expensive than sedans, “Consumers are willing to pay for the utility they get, which is hard to pass up,” Rebecca Lindland, an executive analyst at Kelley Blue Book, told ABC.
2. Subscription model
Porsche, Volvo, Cadillac and Lincoln have all rolled out plans to permit drivers to swap vehicles every week for a fee, according to the ABC report.
“Carmakers are doing this because they want to keep people in the brand,” Eddie Alterman of Car and Driver said. Cadillac, for one, said its BOOK by Cadillac program gives members access to “popular Cadillac vehicles without the commitment of leasing, financing or buying.”
The company charges a monthly flat fee of $1,500. Vehicles are delivered “via white-glove concierge to members’ requested locations and exchanged at their leisure or as their needs change,” ABC noted.
“It sounds like fun if you live next door to the dealer,” Sargeant said.
3. Electric cars
Automakers are clamoring to build plug-ins. “No one wants to miss out,” Sargent said. "Carmakers are rushing the idea of an electric vehicle." Yet consumers' buying appetite remains meager.
“Most people are intrigued by them, but they're not ready to make that leap,” Sargent noted. “For most people, a (federal) tax credit of $7,500 is not enough,” he told ABC.
4. Ride-sharing services
Companies such as Uber and Lyft have changed how Americans get around, ABC noted, adding that the ease in ordering a car by way of an app will likely disrupt the auto industry even more going forward.
Lindland said younger people, especially millennials, prefer ride-sharing services to car ownership, a serious problem for automakers.
“Young people don’t want to tie up their money with an expensive car payment,” she said.
5. Autonomous vehicles
It still may take years for fully functional self-driving cars to be street legal, but new vehicles produced today come equipped with second-level autonomous technology, such as rear park assist, ABC pointed out in its report.
Lindland said a large percentage of drivers are totally unaware of the advanced technology available. “The average car on the road is over 10 years old,” she said.