While storm clouds have been gathering over the US sector for months, with various adverse news reports building in recent weeks, such as the recent spike in subprime auto loans, which jumped 27% in August, or near record new-car sales incentives, or even Ford’s recent warning that sales have “reached a plateau” and will be “at a lower level” in 2017, the straw that may have broken the camel’s back was unveiled today by Goldman which in an extensive, 92-page report slamming the US auto space, said that “the next leg is down” adding that “the US Auto cycle peaked in 2015 and is currently being held at a plateaued level by increasing OEM incentives” and predicting that “this environment can hold through 2017, but we see a path to normalized US SAAR (15mn) beginning in 2018.”
Oh, and for good measure it also downgraded new tech auto darling Tesla from Buy to Neutral with a $185 price target.
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