What does the future hold for the auto industry?
Watch where the auto market is headed, economist advises CUs.
The auto industry is filled with disruptive forces, says Dr. Sean P. McAlinden, vice president and chief economist for the Center for Automotive Research.
Those forces include low oil prices, recalls, increased regulation, and self-driving cars.
Credit unions should keep making auto loans but watch where the automotive industry is headed, McAlinden told attendees of the CUNA Economics and Investments Conference in Chicago.
Some of McAlinden’s conclusions about the future of the auto market:
- Seven years of auto sales growth coming out of the recession is coming to an end;
- The price of fuel will remain low and people will buy more trucks and fewer electric vehicles;
- More federal regulations will increase vehicle costs and reduce new-auto sales;
- Ride-sharing businesses will not have the huge impact some suggest and may be limited in U.S. markets;
- True self-driving cars are coming, but are a long way off.
Credit unions need to pay attention to the future of the automotive industry because auto loans are one of the fastest-growing loan segments, according to Mike Schenk, CUNA’s vice president of economics and statistics.