ALG, the benchmark for forecasting future vehicle values, and the analytics subsidiary of TrueCar, Inc. (NASDAQ: TRUE) projects 16.9 million total new light vehicle sales for 2020, a decrease of 0.8% from the prior year. In January of last year, ALG published its 2019 forecast of 17,049,661 million new vehicles and came in at only a 0.01% difference or 1,936 units, making it the most accurate publicly available forecast in the industry.
“While sales will dip below the 17 million mark for the first time since 2014, when you look at the broader picture, 16.9 million vehicle sales are healthy,” said Eric Lyman, Chief Industry Analyst for ALG, a subsidiary of TrueCar. “2016 was a record sales year fueled by pent up demand following the great recession, so the decline we’re seeing indicates the exhaustion of that excess demand and a market correction closer to organic supply and demand levels,” added Lyman.
The auto industry remains resilient and showing positive economic fundamentals such as record low unemployment rates and steady consumer confidence.
While new vehicle sales are projected to soften slightly for 2020, the average transaction price for a new vehicle is expected to rise by 2.5 percent year-over-year to $36,348.
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