(In second paragraph, corrects Stoddard's first name to Haig,
By Bernie Woodall
DETROIT Dec 8 U.S. auto sales will fall to
about 17.2 million new vehicles next year from an expected 17.4
million in 2016, to be followed by further softening in 2018,
industry consultant and publication WardsAuto said on Thursday.
WardsAuto analyst Haig Stoddard said 2018 will be the
near-term basement for U.S. sales, and that they will rise
slightly in 2019, but not match the records reached in last year
and this one.
Stoddard, speaking at WardsAuto industry conference, said
consumer discounts as a percentage of selling prices for new
vehicles have been at record highs in recent months.
Automakers' ability to hold off pushing sales by continuing
to increase profit-eating discounts would be tested in the early
months of 2017, he said.
Paul Traub, senior business economist at the Federal Reserve
Bank of Chicago, also pointed to automakers' discipline on
consumer discounts as a key to coming auto sales levels.
"I'm kind of concerned about the steps the auto companies
are making now" in raising consumer discounts to keep pace with
record auto sales of about 17.4 million this year and last.
Automakers are likely stealing sales from future months with
their large incentives presently, he said.
Traub said he would advise automakers to abandon efforts to
maintain market share with consumer discounts, also called
incentives. Rather, they should let the overall economic
trendlines work themselves out over time, given that auto sales
near 17 million are healthy enough, he said.
Traub, who said he would not comment on the likelihood of a
rise of interest rates this month by the Fed, said the rise of
3-year old vehicles with negative equity being traded in for new
vehicles was a "dangerous slope in my mind."
Traub referred to the increase in the length of new-vehicle
loans, which reached an average of 68 months in the third
quarter, according to a report this week from Experian, from 67
months a year earlier.
General Motors Co is poised to make the largest U.S.
market share gains in the coming years, because of a fresher
lineup, including new versions of its mainline pickup trucks,
Stoddard said Ford Motor Co is pretty much stuck in
place when it comes to U.S. market share, due to fewer new
products than its Detroit rival GM.
(Reporting by Bernie Woodall; Editing by Frances Kerry)