Auto Sales Predicted to Reach 20M in 2018

Car sales are still on the rise…

John Murphy, lead U.S. auto analyst in equity research with Bank of America Merrill Lynch, predicted at the Automotive News World Congress that the sales of automobiles will reach the mark of 17.3 m in 2015 and by 2018 it could hit the 20 million mark in terms of sales deliveries.

In the previous year, the sales of automobiles in the United States grew by 6% after selling only 10.4 m units in the year 2009, which was the lowest number of units to be sold in 27 years. Automobile sales in the United States was a solid 16.5 m in 2014 and was the 5^th consecutive year of increase in U.S sales deliveries after a terrible 2009.

Murphy said that they “…expect the cycle to continue for the next two years, reaching a peak in 2018 at 20 million units.” He added that it is “…a lot higher than most people are expecting but we also believe there will be a very significant downturn after that.”

The slump in 2009 was attributed by many analysts to the first recession in the U.S in 2008. It saw a slump in the fortunes of the biggest car manufacturers in the U.S, such as Ford, Chrysler and General Motors. Murphy says that a similar slump might be expected some years from now and has a word of caution for many auto manufacturers in the U.S. with plans for investments in new cars.

Murphy predicts that after the boom in the year 2018, the auto industry will enter a phase of a sharp downturn and gave a caution to car makers that it was not a time to invest huge capital in random projects. The analyst noted that the stock of new vehicles from dealers is normal for the present year. He also said that the number of cars which are 11 years or older and still running on the road has seen a rise of around 28% in the last 8 years. Due to this reason, many of these older vehicles are likely to get substituted by new ones in the years ahead.

Source: Data and information presented on this blog have been sourced from http://www.autoguide.com/auto-news/2015/01/auto-sales-predicted-to-reach-20m-in-2018.html