DETROIT (Reuters) - U.S. sales of new vehicles should hit a seasonally adjusted annualized rate of 17.1 million units in 2017, the National Automobile Dealers Association said on Thursday, especially if automakers bring high inventory levels under control.
In a media conference call, Steven Szakaly, chief economist for the dealer lobbying organization, said sales should dip to 16.8 million units in 2018 and then be within a range of 16.5 million units to 16.8 million units through 2020.
After a record 17.55 million units sold in 2016, the U.S. auto industry has posted declining sales for the last four months, with high consumer discounts and inventory levels posing concerns for Wall Street.
A glut of nearly new, low-mileage off-lease vehicles is expected to pose a challenge to new vehicle sales.
Sales of sedans have been particularly weak as consumers have increasingly shifted toward pickup trucks, SUVs and crossovers. Szakaly said consumer discounts are focused heavily on the less-popular models.
"We do expect incentives to rise this year, especially as off-lease (sales) begin to exert further downward pressure on sedan pricing throughout the rest of 2017," he said.
Tackling high inventory levels should help automakers meet the NADA's sales forecast, Szakaly added.
"If we see inventories level off into September and throughout the third quarter, I think it will be a very strong sign that the industry has made the right decisions... and we should easily make our 17.1 million sales number," Szakaly said.
Reporting by Nick Carey; Editing by Jeffrey Benkoe and Dan Grebler