LAS VEGAS—How much longer can the robust auto market remain at current levels? Another three years, according to one analyst.
Jim Treece, editor with Automotive News, told CU Direct’s DRIVE 15 Conference here that the U.S., which is in the longest period of auto sales recovery since World War II, said “times are good; everyone is making money: dealers, lenders, suppliers.”
Treece said the projection is for auto sales to remain at approximately 17 million units sold per year through 2018.
What credit unions should be watching, said Treece, is “the second buyer.” In other words, purchasers of used cars.
“The used car department is the second most profitable of any dealer operation, right behind parts and services,” observed Treece. “We’ve been seeing very good profits on used cars due simple supply and demand for a number of years. Demand for used cars is always going to be high; there is always a market for good, reliable used cars. Supply is another matter. How do you make a used car? You make new cars. A number of years ago we weren’t making many used cars. For the last three years we’ve been making a lot of used cars. What had been a low supply is now coming up. There are lots of off-lease vehicles coming in. Now the market is starting to change a bit. That’s why I say watch what happens to the second buyer.”
For a look at what four auto dealers have to say about what it's like to work with credit unions on financing, go here.