2015 U.S. auto sales on track to hit a record

Background Reading

Summary

The robust car sales market has been fueled by the need for drivers to replace aging cars, historic low interest rates and sagging gasoline prices. But those trends are expected to wane. (Carlos Osorio, Associated Press)

The robust car sales market has been fueled by the need for drivers to replace aging cars, historic low interest rates and sagging gasoline prices. But those trends are expected to wane. (Carlos Osorio, Associated Press)


TakeAways

From the article:

After climbing more than 4% through July, after several years of post-recession growth, annual sales could approach the previous annual record of 17.4 million.

The robust market has been fueled by the need for drivers to replace aging cars, historic low interest rates and sagging gasoline prices, trends expected to wane.

“This is a cyclical industry, and there is no escaping the consumer cycle,” said Steven Szakaly, chief economist for the National Auto Dealers Assn.

Sales, which hit 8.5 million so far this year, could tick up a bit next year. But they are likely near their peak, according to association forecasts.

With auto sales making up one of the strongest segments of still-tepid economy, any reversal would be felt nationally. In previous down cycles, automakers have resorted to profit-killing price wars to maintain market share and keep factories humming. With the deep recession still in recent memory, they might resort to cutting shifts and laying off workers more quickly.