U.S. Car Sales to Peak in 2016?

Passenger car sales in the U.S. will total 17.3 million this year and peak at 17.7 million in 2016, capping seven consecutive years of growth, says the National Automobile Dealers Assn.

NADA Chief Economist Steven Szakaly predicts annual sales will then decline to 17.2 million in 2017 and slide to around 16.9 million over the following few years.

He attributes the market expansion that began in 2010 to “tremendous” pent-up demand cause by the economic meltdown in 2008-2009. But now, he says, that demand is being satisfied.

Szakaly also says the American auto industry can’t sustain a 17 million-unit rate for long because of higher interest rates, costlier regulatory compliance and income pressure. He anticipates wages will grow only about 2% next year. He also expects the Federal Reserve will slowly raise interest rates by 0.50-0.75 points through 2016.