US Auto Sales Solid through Q2, Bumpy Ride for 2nd Half?

U.S. auto sales are maintaining momentum through two quarters of 2018, as many of the “big six” are holding ground or gaining share year-over-year.

However, a few dark clouds are appearing on the horizon, including interest rates hikes, historically high levels of late-model preowned light vehicles, and continued changes to US tariff policy. Tariffs could eventually cause pricing of new vehicles to increase by as much as $6,000, at least temporarily. This would cause an almost-certain drop in consumer demand in the short run, limiting total volume for the remainder of 2018.

auto-market-Q2-2018Still, analysts aren’t ready to doom the industry, pointing to strength in the US economy, labor markets and tax policy. US sales hovered near record SAAR pace in the first half of the 2018.

That said, the second half of 2018 will bring a new set of challenges for auto dealers — not even mentioning a continued battle with regaining more profitability.

Read the full article at The Wall Street Journal:
U.S. Auto Sales Remain Strong, but Tariffs Could Squash Momentum – WSJ

Author: Dave Eckstein

Dave Eckstein is a partner in the firm ESA & Company. You can follow Dave on Twitter @DaveEckstein.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s