Morgan Stanley Warns There's a ‘Buyer's Strike’ Coming for Cars
- Carmakers, suppliers, dealers weak as estimates, targets cut
- Annual auto sales forecasts lowered by millions of units
Breaking Down the May U.S. Auto Sales Numbers
Carmakers and auto parts suppliers traded weaker on Thursday after Morgan Stanley warned of an "unprecedented buyer’s strike," and lowered its U.S. auto sales forecast by millions of units for each year though 2020.
The U.S. auto industry seems to have hit a point of diminishing returns, Morgan Stanley’s auto analyst Adam Jonas writes in a note to clients, and the tactics required to attract new customers are now putting even more pressure on the used-car market that is already suffering from a steep erosion in values. Jonas now expects the 2017 U.S. annualized automotive sales rate, adjusted for seasonal trends, to reach 17.3 million, down from a prior expectation of 18.3 million, as last week’s May sales results were insufficient to support the prior estimates.