Featured Brace for Impact: U.S. Sales Plunge Ahead

Source: http://wardsauto.com/industry/brace-impact-us-sales-plunge-ahead

AlixPartners forecasts 2017 sales of 16.9 million units, down from a record 17.5 million last year. WardsAuto forecasts 17.1 million light-vehicle deliveries this year. Looking further ahead, AlixPartners thinks sales will tumble to 15.2 million in 2019, a forecast that runs counter to many others that see industry sales enjoying a long-term plateau near current levels.
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Wakefield says a key element of the consultancy’s forecast is a “used-car time bomb” set to go off as 500,000 more vehicles will come off lease this year than year-ago. The flood of previously owned cars and trucks likely will double the 13% drop in used-vehicle prices the industry has witnessed since 2014.

“Our biggest concern is used cars,” says Wakefield, who sees the price drop costing automakers’ captive-finance companies upwards of $5 billion.

The dynamic will cause a double-whammy to sales, he predicts, as new-car shoppers turn to cheaper used cars and lease payments on those new vehicles rise against anticipated higher residual rates and costlier credit standards.​

Look at all the Leaf, Volt, and BMW i3 that are rolling off lease and on to the used car lots. Very affordable, many have seen no significant degradation in performance (but check) and when on lease are 'well kept.'

Bob Wilson