Auto industry analysts are predicting extended Black Friday deals will offer a bump in car sales this year.
Reports in Reuters said industry consulting and auto shopping website Edmunds is forecasting a 3.5 percent increase in car sales in November, thanks to Black Friday sales that extend for a full month. Analysts predict 1.4 million new cars and trucks will sell during the time frame.
“It also doesn’t hurt that automakers are starting to really sweeten the deals to clear out lingering 2017s and end this year on a high note,” said Edmunds’ executive director of industry analysis Jessica Caldwell in a statement Wednesday (Nov. 22).
It would be a much-needed increase for an industry that saw sales potentially petering last year. In August 2016, manufacturers reported a 4.1 percent decline in total vehicle sales, raising concerns that the auto industry could be flatlining after record sales in 2015.
But analysts assured the industry not to panic, considering American buyers now hold onto cars for an average of 6.5 years — a record length preventing would-be buyers from ditching their existing vehicles to buy a new one. Analysts at the time predicted approximately $17 million in total auto sales for 2016. This year, Edmunds analysts estimate $17.8 million total sales, according to reports.
The auto industry is also experiencing some changes in terms of how consumers buy used vehicles. According to August reports in Bloomberg, Black Book data showed average used car values dropping 17 percent over the last year. At the time, KAR Auction Services chief executive Jim Hallett said the industry was suffering from an oversupply of used cars, while also struggling because of an increase in new car sales.
This flux in car sales has had another impact, too: consumers being upside down on their loans — that is, owing more on their car loans than the car is worth.