S&P Cuts U.S. Auto Sales View on Slowing Demand, Brexit Effectby
Estimate for 2016 reduced to 17.5 million from 17.8 million
S&P analyst also cites softness in prices for used vehicles
S&P Global Ratings cut its estimate for U.S. auto sales this year to 17.5 million vehicles from 17.8 million, citing slowing demand from individual buyers and the effect on the nation’s economy from U.K. voters’ decision to leave the European Union.
The revision comes as deliveries last month were at a seasonally adjusted annual rate of 16.6 million, Nishit Madlani, an S&P credit analyst, said in a statement Wednesday. He also said there has been “softness in used car prices.” S&P trimmed its estimate for growth this year in the U.S. economy to 2 percent from 2.3 percent.
“In our view, the growth rate of U.S. auto sales will likely slow for the remainder of this year and into 2017,” S&P said.
S&P’s reduced outlook reflects increased pessimism that U.S. deliveries this year will beat 2015’s record 17.5 million cars and light trucks. The average estimate from analysts surveyed by Bloomberg last month was for a 2016 total below 17.7 million, down from a 17.8 million consensus in January. The sentiment that sales may already have peaked has contributed to falling stock prices for Ford Motor Co. and General Motors Co. even as they reported record profits.
Analysts began to cut their estimates after the May U.S. jobs report, which showed that U.S. employers added the fewest jobs in almost six years, and as the Brexit vote spooked financial markets.