A major component of our country’s economy, the auto industry moved a lot of inventory in 2016 and endured a lot of scrutiny. Sales were strong but not record-breaking. Connected and autonomous car technology ramped up with everyone from Google to Uber now in the race. The EPA set the bar while VW faced the music for cheating. Let’s take a look back on 2016 and what I see for 2017…
1. Auto sales in 2016 saw the seventh straight year of rising sales according to Forbes. However, with 17.5 million vehicles sold in 2015, and 2016 seeing 17.55 million, the jump to beat the record was not very large. In the same article from Forbes, it cited that some analysts think the ‘winning streak’ could be coming to a close. Some industry and economic analysts are calling the small gains a slowdown and an indicator of the bubble bursting, while others are seeing a flatter but still healthy market. Honestly, it’s a massive comeback since 2009 when the market bottomed out at just 10.4 million in sales. That’s why it’s important to look at the big picture.
I’ve already discussed my thoughts on the bubble here and here, but I predict that in 2017 we’ll see technology and the auto industry moving forward together to deliver the connectivity that consumers want and are willing to pay for. In turn, this will help drive the market and assist in keeping sales strong throughout the next year and beyond.
2. Regulations also made news in 2016 with the EPA pushing for reduced emissions and increased fuel economy by 2025. This puts automakers in a tough position where lower gas prices have driven consumer demand for more SUVs, trucks and crossovers.
Whatever happens, hopefully automakers have learned that cheating is no way to comply with EPA regulations. This year we saw further fallout of the VW scandal, the company was hit with a fine of $14.7 billion and is now offering partial refunds to owners of 482,000 of its diesel cars.
I predict that this will continue to be a point of contention in 2017. While the average gas price has slowly crept up from around $1.50 per gallon earlier this year to the current $2.34, my sources don’t indicate any reason for alarm next year. We’ll see our usual peaks, but nothing that will deter buyers from heading to car lots for a roomy SUV or powerful V8 truck.
3. The Connected Car and autonomous technology have turned into a market share grab amongst automakers, technology giants, even wireless carriers and other players. Thanks to 17.5 million vehicles sold in 2015 and a continued sales surge in 2016, Google jumped at the chance to pair up with Chrysler while Microsoft connected with Ford to take autonomous cars to the next level. Even Uber has joined forces with Volvo for testing of driverless ride-hailing services.
As I’ve said before, I think this new frontier and addition of smart technology will certainly make an impact on the auto industry in 2017 and well beyond. Tech savvy consumers are waiting for the next big thing, and it’s going to be here sooner than many realize. I predict that connected and even autonomous cars will be the catalysts for sales that just might break the 2015 record.
So there you have it, a quick round-up of 2016 and a look at 2017. We’ve got strong sales, gas prices conducive to car buying and incredible technology in the works. That all points to another great year, and I predict a whole lot of success for our dealer customers in the New Year.
Curious how Spireon can help your dealership in 2017? Contact us today for a free demo.