A report released by consulting firm AlixPartners predicts sales of 17.5 million light-vehicles in 2017, down from the 17.8 million deliveries expected for 2016. The decline would mark the first downturn in sales after seven consecutive years of growth.
Mark Wakefield, managing director of AlixPartners and co-author of the report, attributes the dip to lower used car prices, a slowdown in economic growth and slight increases in interest rates.
The report identifies several indicators that point to the sales streak ending, including incentive spending rising 14 percent, delinquency rates for subprime loans increasing to 4.5 percent, lease rates jumping to 31 percent of new sales and negative equity values expected for 40 percent of non-luxury vehicle trade-ins.
Wakefield considers the slowdown to be relatively mild given the expanding U.S. economy, rising housing starts and inexpensive gasoline.
After bottoming-out at 15.2 million vehicles in 2019, the report forecasts annual sales returning to 16.8 million units in 2022.