Analysts Expect Sales Boom To Continue In New Year
Reuters reported that although US auto sales for December didn’t meet analysts’ expectations, they contributed to an all-year record for 2015. According to Autodata, 17.47 million vehicles were sold last year, exceeding the previous high of 17.41 million, set in 2000. In addition, economists expect 2016 auto sales to set a new record, with some analysts forecasting as many as 18 million sales for the year. General Motors economist Mustafa Mohatarem said, “The US economy continues to expand and the most important factors that drive demand for new vehicles are in place, so we expect to see a second consecutive year of record industry sales in 2016.” However, analysts also pointed out that sales follow a cyclical pattern, and will likely trend downward after 2017 before recovering by 2022.
The Wall Street Journal attributed the record sales, which exceeded that previous record set in 2000, to low gasoline prices and interest rates. A front-page story in the Washington Post called the 2015 sales figures “a staggering turnaround for an auto industry fighting for its life half a decade ago,” adding that “the explosive results could prove more than a blip, with some analysts projecting that a strong economy could yield another car-lot record in 2016.”
What This Means For Small Business
Record sales will benefit small businesses that depend on the auto sector. While analysts expect sales to continue on an upward trend for some time to come, the industry is cyclical, and sales are not likely to continue to exceed year over year records over the long run.
Note: this article is intended to keep small business owners up on the latest news. It does not necessarily represent the policy stances of NFIB.