U.S. Markets

U.S. auto sales expected to hit record 17.6 million in 2017: JD Power, LMC Automotive

DETROIT (Reuters) - U.S. auto sales are expected to remain robust and scale a record high of 17.6 million vehicles in 2017, lifted by expected fiscal stimulus and deregulatory policies of President Donald Trump, consultancies J.D. Power and LMC Automotive said on Friday.

Traffic flows along Coast Highway 101 through San Diego's North County beach town of Encinitas, California March 31, 2014. REUTERS/Mike Blake

The consultancies see January keeping sales robust at an annualized rate of 17.3 million vehicles, although falling 1.8 percent from last January.

January sales will be about 1.13 million vehicles, JD Power and LMC said.

It would be the third consecutive year of a record high for total light vehicle sales.

U.S. auto sales led the economy out of the 2008-2009 economic crisis. Wall Street automotive company analysts have been predicting a downturn in sales since at least 2015 and so far, the market has surpassed those expectations.

“After an overheated close to 2016 and the increased likelihood of deregulation and fiscal stimulus from the Trump administration driving the economy higher, we now expect 2017 to be another record year in U.S. auto sales,” said Jeff Schuster, head of forecasting at LMC Automotive.

“While there are many variables to consider this year, one area of caution is the large number of lease maturities repopulating the used-car market,” he said. “It creates demand for a vehicle, but also more used-vehicle options to compete with the new-vehicle market.”

Edmunds, an automotive consultant and online sales site, said 2017 will show a record 31 percent of new vehicles purchased through leasing.

JD Power and LMC said January will show record average selling prices of about $31,500 per vehicle, high inventory levels and rising consumer discounts. Also, pickup trucks and SUVs will continue to account for more than 60 percent of the market, they said.

Edmunds said on Wednesday January U.S. auto sales will have an annualized selling rate of 17.7 million vehicles. Total light vehicle sales were expected to be 1.53 million vehicles, up 0.7 percent from a year earlier.

January U.S. auto sales will be reported by automakers on Wednesday.

Reporting by Bernie Woodall; Editing by Chizu Nomiyama and Bernadette Baum