Wholesale car auction company Manheim predicts 3.6 million vehicles will come off lease in 2017 followed by 4.1 million in 2018. If historical patterns hold up, around 4.3 million cars will come off lease in 2019.
“Off-lease returns still remain the wild card,” said Pete DeLongchamps, vice president of manufacturer relations at auto retail chain Group 1 Automotive Inc <GPI.N>.
Investors are also watching rising interest rates, inventories of unsold vehicles and the generosity of profit-eroding discounts that automakers are offering to close deals. Those indicators are largely negative.
According to Cox Automotive data, consumer discounts were up 14.6 percent on the year in March. In their sales forecasts in the last two months, automotive consultancy firms J.D. Power and LMC have said discounts hit levels not seen since the recession in 2009.
Signs that the auto cycle is at its peak have weighed on the shares of Detroit automakers, casting a shadow over an industry central to President Donald Trump’s pledge to rebuild American manufacturing.
