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Continued Demand Expected to Mean Another Good Year for Automakers

When the books are closed on 2016, auto sales are expected to actually improve slightly on 2015’s record numbers of 17.5 million vehicles. So what does this mean for 2017? Industry experts have some surprising answers.

What’s Behind the Boom in Auto Sales?

Over the last few years, robust auto sales have been driven by falling gas prices, available credit and increased demand. Thanks to a lower unemployment rate, more and more Americans are in need of reliable transportation.

What goes up must come down, and some analysts think that sales have plateaued, but many others argue that signs are indicating continued strong sales, with any possible downturn being relatively minor.

Keeping Up with Changing Consumer Demand

While automakers are pleased with sales, it’s the product mix that’s causing concern. When SUVs were introduced, their popularity and profits caused many auto companies to leave smaller cars behind, a strategy that backfired when gas prices skyrocketed.

Enter the newer high-quality compact SUVs, often referred to as crossovers, which combine the appeal of trucks and larger SUVs with the driving ease and fuel economy of cars. As sedans and sports cars continue to lose market share, automakers are exercising restraint as they adjust their product mix to meet consumer demand while avoiding the pitfalls of going all-in.

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