The auto industry is headed for a record year in 2015, according to Joe Derkos, director, consulting & analytics at J.D. Power & Associates. New vehicle spending is forecast to hit $407 billion in 2014, equal to the GDP of Austria. The average transaction price is also expected to hit $30,000 on the year, and retail sales (excluding fleet sales) are set to hit 13.8 million vehicles in 2015, matching a record set in 2004.
But all of that growth faces numerous risks, Derkos said. Each risk is modest on its own, but if multiple risk factors move in the wrong direction simultaneously, the risks could compound with damaging effect. Derkos described the following risk factors for the industry: Growing OEM incentives, rising interest rates, longer loan terms, increased leasing activity, and falling used car prices.
