Auto sales for the first half of 2017 are down 2.2 percent compared to 2016, but the National Automobile Dealers Association (NADA) has not revised its 2017 forecast.
NADA said the industry will reach 17.1 million sales of new cars and light trucks.
Customer demand is still healthy, NADA said, with cars accounting for 37 percent of sales and SUVs and light trucks accounting for the rest.
“Record sales years do not last forever and what we have seen is that the industry has moved steadily toward a model that is more productive and flexible particularly on the new-car side,” NADA Chief Economist Steven Szakaly said. “Given these still stronger than average market fundamentals it is difficult to see sales falling below a long-run rate of 16.5 to 16.8 million. This would still represent a strong market.”
This does not mean, however, there are not concerns in the industry, Szakaly said.
Longer financing terms means customers must wait four years to reach a net equity position.
Credit scores for new loan applicants have fallen. This reflects buyers who did not have financial security during the recession now have the ability to make large purchases.
Inventory will not start to fall until September. Incentives mainly will be for sedans while 200,000 buyers are expected to buy off-lease vehicles instead of buying new.