The U.S. automotive business appears to be easing off the accelerator a bit heading into 2017. The bottom line of sales (rates) are still pretty high, but they are plateauing and it is taking more effort in terms of promotion and incentives to keep sales higher. And the specialists expect that will be more of the same next year.
With sales leveling off, inventories are rising. When inventories rise, automakers put more incentives on. Incentives are the highest they have been in a long time. There are certain cars that are absolute bargains, especially compact, subcompact and midsize cars. Nationally, new vehicle sales are about 70% light duty trucks and crossovers— everything from a Toyota RAV4 to a Kia Soul to a GMC Yukon, and about 30% cars. The industry set a new-vehicle sales record last year. This year, sales are on track either for a new record or a near miss.
Beyond the growth in sales of SUVs and pickups, an overall inventory shift is forecast for 2017 as thousands of leases are up. That could mean some decent deals for used car shoppers in 2017. Interest rates are rising, right along with the stock market, but dealers don't think they will affect auto loans much. With an anticipated rate increase that is relatively small, auto manufacturers will likely step in and subsidize loan programs to keep interest rates near zero.
