General Motors Chairman and CEO Mary Barra is bullish about U.S. car sales.
She said in an interview with CNBC that the auto industry this year can match the record of 17.5 million vehicles sold in 2015.
“Barring anything external or macro driving it, we see this mid-17 (million) going for a few years,” Barra said.
Others aren’t so sure. Some Wall Street analysts say the U.S. auto market is close to a peak and will soon begin to weaken. That has some investors worried about how major automakers like GM (gm) and Ford (f) will fare if there’s downturn.
Barra acknowledged that it’s impossible to predict a downturn, but insists GM is prepared because it only produces what the market is asking for and is disciplined about keeping inventories in check. Automakers with high inventories are at risk because people stop buying cars when consumer confidence slides, forcing companies to discount or provide other incentives that eat into profits.
Most automakers say consumer demand is strong and predict it will continue. U.S. sales in first quarter closely matched those in 2015. For example, GM’s first quarter U.S. sales of 683,698 vehicles was flat compared to the same period last year. In terms of cars sold to individual customers and not corporate fleets, its first quarter sales rose 7% to 537,000 vehicles.
How Mary Barra led GM through a crisis:
However, sales have slid in the past two months. Both GM and Ford reported lower U.S. vehicles sales in May, which they said were a consequence of weak demand for sedans and two fewer selling days than a year ago. GM’s U.S. sales fell 18% to 240,450 vehicles while Ford reported a 6% drop to 235,997 vehicles in May compared to the same month last year.
Fiat Chrysler Automobiles CEO Sergio Marchionne, who was interviewed Friday at the annual workshop of the Council for the United States and Italy, believes global sales volumes will hold the next six to nine months.
“If anything, the risk is on the downside,” Marchionne told a Bloomberg TV reporter about the uncertainty about actual versus expected sales. “So we need to readjust our expectations, and we already have.”