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Investing.com -- Bank of America analysts have cut their outlook for U.S. auto sales and North American production, citing tariffs and a weaker macro backdrop.
“We revisit our view on the North America Automotive market post 2Q25 earnings,” BofA said. “We revise down both US sales and NAm production estimates for 2025E–2030E to account for potential price increases driven by tariffs and a less favorable macro environment.”
The firm now expects U.S. sales to decline 3% year over year in 2026 to 15.6 million units, down from a prior estimate of 16.9 million.
North American production is forecast to fall 2.5% to 14.8 million units, compared with a previous projection of 16.4 million.
Affordability is said to remain a key pressure point. “Currently, an average US consumer needs ~37 weeks of income to purchase a new vehicle,” BofA wrote, citing Cox Automotive data.
“We expect this figure to move to ~38 weeks in 2026E.” The bank assumes tariffs will push prices higher by about 2.5% as automakers pass on costs to buyers.
BofA also noted that 2025 has so far tracked expectations, with U.S. sales at a 16.3 million seasonally adjusted annual rate and inventories at 2.5 million in August.
However, the analysts believe there may be a “noticeable slowdown” in the fourth quarter.
Looking further out, BofA sees tariffs as a “major risk” that will keep U.S. sales below 16 million until 2028.
While tariffs could prompt some production shifts from Mexico and Canada to the U.S., the bank said the benefit will be “marginal.”