Which Presidential Candidate Will Have Better Impact on Auto Sales?

October 30, 2008

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BANDON, Ore. — Could the number of used vehicles sold in the U.S. next year hinge on who wins Tuesday's presidential election?

According to Art Spinella, president of CNW Research, the policies of the next commander-in-chief may significantly impact industry sales in 2009 on both the new and used side.

Spinella projects that if Sen. Barack Obama wins the election, used-vehicle sales will total 36.75 million units in 2009. However, Spinella forecasts used-vehicle sales of 37.5 million models if Sen. John McCain wins.

Spinella anticipates similar trends on the new side, as well.

Why the discrepancy? Basically, it comes down to the candidates' tax plans, according to Spinella.

"The tax policies each is supporting have significantly different impacts on small and medium business as well as corporate fleet auto purchases," he explained. "About 20 percent of used sales are to families with incomes over $200,000 per year for sons, daughters and other family members as well as for use in home businesses.

"Higher taxes on these families is not offset by lower taxes or rebates to lower-income families who typically buy private party and on an as-needed basis," Spinella continued. "None of the tax plans would actually add significantly to the disposable income of those families."

Discussing the new-vehicle market further, Spinella predicts that an Obama win would mean 14.6 million units sold in 2009, while a McCain victory would result in sales of 15.4 million vehicles.

"If the Obama policies are enacted by a Democrat-controlled Congress, new-vehicle sales — which are nearly 40 percent to small, medium and large business as well as commercial fleet (excluding daily rental) — would be severely curtailed," Spinella stated. "McCain tax policies would likely be thwarted by a Democrat-controlled Congress, which puts the industry on a conventional and historic trend line."

What Spinella called the "800-pound gorilla" is how much of the $700 billion bailout package is loaned to auto financiers.

No matter who wins the election, it could result in roughly 750,000 more used units sold and 250,000 additional sales of new models, Spinella projected.

"Those are some big ‘ifs,' I know, but we have rarely seen such a significant difference in proposed tax policies and the potential for one party to have a super majority capable of stifling debate over those policies," Spinella concluded.

For more information, visit www.cnwmr.com.

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