The 2016 New York International Automobile Show opens this week as the surge in vehicle sales of the past five years nationally and on Long Island is settling into slower growth, but kept at a robust level by low interest rates and some of the cheapest gasoline prices in years.
The event at the Jacob K. Javits Convention Center in Manhattan, which has long been the nation’s best attended car show, will feature more than 1,000 new vehicles ranging from a redesigned Mitsubishi Mirage subcompact starting at $13,000 to a $200,000 variant of the Land Rover Range Rover.
The new and remodeled vehicles boast an array of electronic features to help drivers avoid crashes, in most cases via warnings, but in some models, such as the redesigned Mercedes-Benz E-Class, by automatic braking and automatic steering, which uses video cameras to detect when a vehicle drifts out of its lane, and steers it back on course.
Auto analyst Jesse Toprak, who is developing an auto information website based in Beverly Hills, says the safety technologies are a pathway to self-driving cars, though he thinks autonomous vehicles are at least five years from showrooms. “By offering these accident-avoidance technologies, automakers can make their products more competitive today and also get ready for the self-driving cars of tomorrow,” he said.
Even the small, redesigned Mirage will be available with a rear camera for safer backing up, and will come standard with “brake assist” to boost brake system pressure for emergency stops.
The new models are getting better gas mileage and slicker styling, which in some cases is aimed at transforming boxy sedans into the shape of a coupe.
The show opens to the public Friday after a two-day media preview and runs through April 3. Last year a record crowd of more than a million people attended.
What to watch for
Notable models, based on their predecessors’ popularity, include a Honda Civic four-door hatchback, the Fiat 124 Roadster, which is based on the Mazda Miata, and a new minivan from Chrysler, the Pacifica, replacing the Town and Country. The show also features a revived Lincoln Continental sedan, the brand’s new flagship.
Also redesigned are the Buick LaCrosse sedan and Volvo S90 top-of-the-line sedan. There’s a new version of the Volkswagen Golf, the Alltrack, and Maserati’s first SUV, the Levante.
New luxury models also include the Alfa Romeo Quadrifoglio sedan, two variants of the BMW 7-series sedan, the M760i and Alpina B7, and the Lexus LC 500 coupe, which will be offered in gasoline and gas-electric hybrid variants.
New sporty models include variants of the Porsche 911 and Boxster, and the Chevrolet Camaro.
The new models will arrive in national and Long Island markets where sales are strong but no longer sharply rising, as pent-up demand from the recession is now largely satisfied.
Last year, registrations of new vehicles rose by 3.1 percent over a year earlier on Long Island, to 223,819 units, according to the Greater New York Automobile Dealers Association, which runs the show. (New registrations approximate sales.)
Nationally, sales last year rose 5.7 percent from 2014 — to a record of almost 17.5 million vehicles, according to the trade paper Automotive News. In the 12-county region covered by the dealer group, which includes Long Island, New York City’s five boroughs and the northern suburbs, registrations rose by 6.2 percent last year from 2014.
There are no local figures yet for January and February, but, nationally, sales decelerated to a 3.3 percent gain from a year earlier.
At the 22-store Atlantic Auto Group, which is based in West Islip and is the Island’s largest dealership chain, co-owner Michael Brown says he expects a small increase this year over last, when his sales rose about 5 percent.
“It’s an election year,” he said. “I think that plays a role. I think people get cautious. They’re also cautious about interest rates and gasoline prices rising. All of those can play a role.”
At BMW-Mini of Freeport, owner Greg Vitello notes a potential positive for local sales: Huge numbers of leases are coming due this year on new cars acquired by Long Islanders in early 2013 to replace vehicles destroyed by superstorm Sandy in October 2012, and to replace vehicles whose purchases had been deferred since the recession. “We’re entering a very interesting market now,” he said, adding that his store expects 300 leased vehicles to be returned this month.
Chris Hopson, a senior auto analyst at the Lexington, Massachusetts, office of consultant IHS Automotive, is forecasting a 2 percent increase in sales nationally this year, factoring in the possibility of a drop in consumer confidence from the November election and a small rise in interest rates.
But, he adds, “by no means am I calling an end to this nice growth cycle.”
What’s driving sales
Local economists, auto analysts and dealers have attributed the growth in auto sales since the recession’s official end in 2009 to economic gains, particularly higher employment. Moreover, the market has benefited from low auto loan interest rates and the growing popularity of leasing, particularly in affluent areas such as Long Island. Leasing usually brings drivers back to showrooms every three years.
The economy on Long Island, though, may provide less of a boost to car sales this year. A panel of local economists and other experts gathered by Farmingdale State College in January forecast that Long Island’s economy would grow more slowly than the nation’s this year — gaining 1 percent, or less than half the rate of growth for the nation, according to one panelist, independent economist Thomas Conoscenti.
“The economy is not bouncing back the way we want it to be,” he said at the event. Some panelists disagreed with that local estimate, but still expected slower growth here than in the nation as a whole.
In a positive sign, Long Island’s jobless rate dropped to 4.5 percent in January, the lowest for the month since 2007, recent state data showed. In January 2015, the rate stood at 5.3 percent.
Workers at Long Island companies had slightly bigger paychecks in 2015. Average weekly wages climbed 2.3 percent in Nassau and 1.4 percent in Suffolk in the second quarter of 2015, from the same period in 2014, the latest period for which figures are available from the U.S. Bureau of Labor Statistics.
But wage growth here was uneven, and the local rate remained below the state’s and the nation’s. Statewide the gain was 3.1 percent, and nationwide it was 3 percent.
Sales of light-duty trucks, especially sport utility vehicles, have been particularly strong nationally and locally since the collapse of gasoline prices starting in mid-2014.
“Once they dropped below $3 a gallon we couldn’t keep SUVs in stock,” said Vitello. BMW sells three SUV models in this country.
Visitors to the auto show will find all-new or significantly updated versions of some of the most popular SUVs, including the Chevrolet Trax, GMC Acadia, Mazda CX-9, Buick Encore and Toyota Highlander. Buick is adding a compact SUV that is smaller than its midsized Encore for 2017, the Envision, with a turbocharged four-cylinder engine.
Gasoline prices have fallen almost steadily from a recent peak of $4.036 a gallon on July 2, 2014, to a recent low of $1.926 last month, as crude oil prices collapsed from $107 a barrel for the U.S. benchmark grade to a low of about $26 in that period. A worldwide glut of oil drove the prices down.
Cheaper gasoline has provided a boost to disposable income for Long Islanders.
Gas prices rising
Now, however, oil is rising again — by more than $13 a barrel from $26.19 on Feb. 11 for the U.S. benchmark grade — amid slowdowns in U.S. production and agreements by some major international producers to freeze output at current levels. Pump prices are slowly rising again, in part because of crude’s price recovery and partly from the seasonal pickup in demand from warming weather and the phase-in of more expensive summer-grade gasoline.
Regular averaged $2.039 a gallon Friday morning, up 11.3 cents from the February low, according to AAA.
Few analysts, however, are predicting significant rises this year in the price of crude or fuels.
Hopson of IHS says his company forecasts only small increases in fuel prices for the next few years, so truck sales are likely to remain robust in relation to those of cars. “I don’t think a minor uptick in fuel prices, especially from where we are now, is going to cause too much of a dramatic switch” back to cars, he said.