It’s obvious that the auto industry is not able sell 17 million cars and light trucks in America year after year. At some point buyer demand will become sated. Higher interest rates will force manufacturers to offer less attractive deals. Thus, sales would begin to drop from their recent peak, which will create a set of difficult challenges for car companies that operate in the United States. A forecast for January sales predicts a dip of 3% to 1.13 million, which translates into 31,000 vehicles. Some car companies will start to be part of trends that may erode their earnings.
Analysts say the drop will be extremely uneven among manufacturers. Volkswagen, which also owns the Audi and Porsche brands, will begin to rebound sharply from a sales collapse brought on by adiesel engine cheating scandal. Its sales will rise 17% to 42,500. However, this will still makeVolkswagen a tiny participant in the American market, second only to China in size, with a 3.1% share — smaller than any other large global manufacturer. Volkswagen trades places from year to year with Toyota Motor Corp. as the world’s largest manufacturer. Read more