U.S. Sales to Top 16 Million Through 2023, Economist Says

LAS VEGAS – Patrick Manzi, chief economist for the National Automobile Dealers Assn., is forecasting U.S. new-vehicle sales of about 16.8 million for 2020 — the same forecast he made a year ago for 2019, which turned out to be low.

“Three interest-rate cuts and a big push in fleet sales” unexpectedly pushed 2019 sales to about 17.1 million, topping the 17 million mark for a record fifth year in a row, he says.

“Last year at this time, I said it would be under 17 million,” Manzi says at a press conference here at the NADA convention and expo today.

At the American Financial Services Association Vehicle Finance Conference on Friday, Manzi said he expects sales to average in the mid-16-million range for the next few years. Specifically, he expects new-vehicle sales of 16.5 million in 2021, 16.4 million in 2022 and 16.2 million in 2023.

At the NADA show press conference, Manzi calls cross/utility vehicles a “very red-hot” product segment, with more entries coming. That makes Manzi think incentives will probably increase in the CUV segment.

“Unless you’ve got the newest, hottest product, you may need to put some money on the hood,” he says.

Jonathan Banks, vice president and general manager-vehicle valuations for J.D. Power, says at the press conference he expects the used-vehicle business to be as good as it gets for franchised dealers in the next few years, in terms of both volume and margins.

“Demand is at an all-time high for used vehicles,” thanks largely to high new-vehicle prices, he says.

Surprisingly, considering how new-vehicle buyers have stampeded to trucks and away from passenger cars, used passenger-car values actually stood up better in 2019 than used trucks, Banks says.

That’s partly because the U.S. domestic automakers have just about abandoned passenger-car manufacturing in favor of trucks and utility vehicles, and that’s having a growing effect on the supply of used cars, he says.