Kelley Blue Book Analyst Sees Big Slow-Down For New Vehicle Sales Growth

Sales of new vehicles are expected to grow at a slowing pace in the current year, while an "onslaught" of used cars will hit the market, according to an analyst.

New vehicle sales growth in 2015 will slow to a 3.7 percent pace from 5.8 percent in 2014, according to Alec Gutierrez of Kelley Blue Book, a unit of privately held Cox Enterprises.

Gutierrez predicts sales of 16.9 million units in the current year, up from 16.5 million in 2014.

New sales will include 13.9 million sold through retail transactions, up from 13.5 million in 2014, while the average transaction price will increase to 2 percent to $33,500.

Automaker spending on promotional "incentives" will increase to an average of $2,950 in 2014, from $2,791 last year.

The incentives will equal 8.8 percent of the average sales price, up from 8.5 percent last year.

The incentives are especially high for hybrids and electronic vehicles which Gutierrez said are "increasingly difficult to sell."

Lower gas prices will help continue a trend among consumers to favor utility vehicles and trucks. Last year non-luxury utility vehicles accounted for 28 percent of new vehicle sales but 46 percent of growth.

Michelle Krebs of Autotrader.com, also a Cox unit, said used cars certified by a manufacturer will become increasingly popular as consumer familiarity with the concept grows.

The average 60-month residual value of a mid-size truck is 56.4 percent, versus 35 percent for a mid-size car and 28.9 percent for a high-end luxury car, according to Kelley Blue Book.

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