Pub. 15 2016-2017 Issue 3

N E W J E R S E Y C O A L I T I O N O F A U T O M O T I V E R E T A I L E R S I S S U E N O . 4 , 2 0 1 6 28 new jersey auto retailer New Jersey Auto Retailer (NJAR): Walk us through the highs and lows of the U.S. retail new car market in 2016. Steve Szakaly: Overall sales remained stronger than what many people expected. While some industry experts were expecting a heavier fall-off in sales, we should end 2016 with approximately 17.4 million vehicles sold, a slight decline from the all-time record set in 2015. Incentives have risen a bit in the last few months but, overall, there has been some conservatism by manufacturers when it comes to incentives and that’s good. Out-of-control incentives can artificially pump up sales in the near term, but can ulti- mately harm the industry in the long term. Overall it was a pretty good year. It’s certainly hard to complain about a year with sales over 17 million. N J AR : Wh a t i s y o u r f o r e c a s t o n where things are heading in 2017 and beyond? Szakaly: We are forecasting sales of 17.1 million new cars and light trucks in 2017, before we start to see it come down a bit to just under 17 million in 2018 and 2019, assuming that manu- facturer incentives stay relatively f lat. We are headed toward a stable market for U.S. auto sales, not a growing market. After several years of 17.5 million plus vehicle sales, pent- up demand is effectively spent. Now we will see a slowdown, but pent-up demand will increase again. It’s the normal cycle of sales, not a negative for the overall economy OR the retail motor vehicle industry specifically. In the long term, I see new vehicle sales settling in the 16.5- 17 million range and used vehicles ( sold by new car dealers ) ECONOMIC Q&A WITH STEVE SZAKALY, NADA CHIEF ECONOMIST