TrueCar's Eric Lyman says there isn't enough focus on the impact of millennials on auto sales. He believes they will lift sales through the latter part of this decade. Bobbi Rebell reports.
US on us now on pace for a record year in 2015 after its strong December let's get more from air line and hit vice president. An industry in fact accurate are great to see there. That's good to be here. I forgetting that this camera camera today they all looked very Fallon and some are a little bit disappointed are all up. From your research and what you hear from consumers Y 2015 have to agree year. So 2015 it was a great year record setting year for a couple of reasons. I gas prices are low and that's skewing more of the mix towards the big suvs in the rocks that's certainly. Creating some traffic in the show room we're still seen interest rates were continuing at their record lows. And the millennial continue to come into the market so I think that's one of the things we don't focus on as much. Impact of millennial which will continue through the latter part of the decades. Well as pigeon thing about the demographic shift their kids they're setting up household they're having valid are they gonna start buying. Different cars and other that they moved from the single cars to this you have against south part of the big family cars and their careers and retreating and. Absolutely obviously you would expect to younger buyers start out buying used cars amendment into the new car sector as well even if they by the used cars. You know act creates an opportunity for someone else to buy new car. Andy yeah they will grow we'll start to see utilities continue to be exceptionally strong impact when he fifteen was the first year compact utility. Took the sales crown in terms that first time any. Household others and we expect that. Over the long term consumers love that functionality. Cargo space utility vehicles and the patient is that as well gas prices are. Eric you mentioned it interest rates I want had a lot financing because financing seems to be stretched out a little bit longer than it used to be. People watching those rape and we do expect rates to continue to move higher in 2016 what kind of impact could that happen. So in and of itself interest rates would have a negative impact on auto sales but what we look at the whole holistic market. And we factor in the economic growth and everything else we still expect that. Even with a hundred basis points out of the federal funds rate in 2016 that's what we're expecting. We're still seeing that auto sales will be up about three percentage points sixteen hit that eighteen million miles down. So it does have a negative impact in a vacuum. Of course but only look at the overall strength that the economy's strength of the automotive industry. As well as suspension from the captain lenders. We don't expect that interest rates have an act on the market when it's. When he seed has an advantage from the automakers and it went to take to move these cars to get people to buy them. So we have seen instances creep up in the last six months or so are coming out of the recession. Capacity was there then there was a lot of vehicles being produced so that enabled auto makers have. Very low incentives and we have seen creep up. Although it still at a manageable rate it's nothing like what we saw early two thousands. We're still seeing a lot of consumer demand and they incentives are up. My belief is that the auto makers are really taking opportunity of the strength auto market you know our interest rates. And capitalizing on throwing a little extra. Incentives to view. Get some of those sales and when he fifteen early twenties Eckstein before we start to see things sort of taper off and the later part. Apparently the neck thank you so much Eric. Thank you I think future part Eric planet I've got him about this and writers.