Positive but Slow Growth in Car Sales Ahead in N. America

Sales of light vehicles in North America will continue to rise through 2017 in spite of softer demand in the U.S., LMC Automotive predicts.

U.S. sales this year will likely dip 0.2% to 17.42 million cars and light truck as declines in the second half of the year offset a 1.5% gain in the first half, says Bill Rinna, senior manager of N. American forecasts. He presented the forecast at LMC’s Global Industry Outlook Conference outside Detroit earlier this week.

Rinna says a dip in U.S. sales this year will be more than offset by gains in Canada (+2% to 1.94 million units) and Mexico (+18% to 1.58 million), resulting in 1.2% growth to 20.9 million units for the region.

He expects North American volume will reach 21.0 million next year and slowly climb to 21.8 million by 2023. Over the same period, LMC predicts sales in the U.S. will rise an average of only 0.4% per year.

LMC forecasts production in North America will continue to expand, gradually rising from 17.9 million units this year to 19.4 million by 2023. Capacity utilization will remain at about 90%.

The region’s sales growth will be fueled in large part by an “exponential” surge in product updates: 92 all-new entries and 186 redesigned models from 2016 to 2020, Rinna says. The flood will raise the number of models offered from 315 last year to more than 350 by 2020.

Demand for SUV/crossovers will continue to drive the North American market. Such vehicles represented about one-third of new models introduced in the region this year. LMC says the proportion will rise to 60% in 2017 and peak at 74% in 2019 before dropping to 31% in 2020.

The firm says pickup trucks, which have steadily increased their share of the U.S. market since 2009, are likely to maintain but not improve their current 15% share through the next four years.