US Auto Industry – chartbook – 4Q 2017

• The replacement of vehicles damaged or destroyed by recent hurricanes boosted auto sales in September and October
• However, after the one-time effect of hurricanes recedes, sales of new vehicles are likely to return to a more modest path due to rising interest rates and lower prices of pre-owned units
• Increasing off-lease returns are expected to continue exerting downward pressures on sales and prices of new cars and trucks
• Leasing could wane as the industry struggles with lower terminal values and a glut of pre-owned units, creating opportunities for traditional auto lending
• The shift to light-trucks has kept transaction prices high, supporting profitability in spite of lower volumes
• Sales of electric vehicles will hit a record in 2017; however, the potential elimination of the $7,500 tax credit could affect demand in the short-run

Fuente: BBVA Research

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