Representatives from the National Automobile Dealers Association hosted its quarterly economic press briefing on Monday to set the scene for Tuesday's NADA / J.D. Power Automotive Forum.

And the tone set by NADA for the remainder of the year and coming years was remarkably positive. Perhaps one of the strongest examples of that attitude was portrayed by Jonathan Banks, the association’s executive analyst, who, when asked when the impending “used-car bubble” that some in the industry have been forecasting for years was going to bust, said it doesn’t currently exist.

“NADA was never one of the pessimists that thought there was a used-car bubble,” Banks said. “In fact, if you just look at the used supply, used supply in ’14 was flat compared to ’13, and before that it was actually declining, obviously because of the pull-back in new vehicle sales from the recession. But this year will be the first year since the recession that we’re actually going to see a little bit of growth.”

Auto Remarketing previously reported on the NADA’s prediction that used-vehicle supply will return to pre-recession levels in 2017. According to Banks, the industry should expect to see the strongest burgeoning in used supply in 2016 to 2018, with a predicted growth of 3.5 percent of zero- to 8-year-old vehicles in 2016 and as much as 4.5 percent in 2017. He didn’t want dealers to worry, however, too much about large jumps in pricing levels.

“We’re going to see some moderation in used-vehicle prices, but we think it’s going to be slow,” Banks said. “We don’t think that there’s any indication that there’s any sort of bubble. It’s just purely supply and demand that’s been keeping the prices strong.”

Banks did warn about the pressure that the new-vehicle market may put on the used industry in coming years. According to the executive analyst, the current slowing of new-vehicle sales is seen as a potential “headwind” for the used market, which could see an increase in manufacturer incentives, in an attempt to continue new-vehicle sales pace, make the option of a used vehicle less and less enticing for the budget-minded consumer base.

NADA expects to see a decline in price on zero- to 8-year-old vehicles by as much as 1.5 percent this year, which is down from the 2 to 2.5 percent the association forecasted in January.

“Our forecast of down 1.5 percent, in a historical perspective, still puts used prices very high,” Banks continued. “But what we do know, what we definitively know, is those late-model used vehicles, that supply coming back, will continue to grow.”

Alongside Banks was Steven Szakaly, NADA’s chief economist. Some highlights from his breakdown of the economic outlook for the market, on the new-vehicle side, are as follows.

• Despite a “somewhat weak” first quarter (due to weather and the West Coast port strike), NADA still predicts sales of 16.94 million units in 2015.
• GDP growth in the first quarter was 2.1 percent. NADA expects an overall annual growth for the year around 2.9 percent, down from previous prediction of 3.1 percent.
• Light trucks will make up 56 percent of overall light-vehicle market, up several percent over last year.
• Segments most impacted by lowering oil prices will be remain to be light cars – which will not change this year. Expect to see slight hits on hybrids and electric vehicles, as well.
• Light vehicle sales will outpace the overall economic growth for what will be the sixth year in a row.
• NADA is worried about wages and income: It would like to see growth between 1.5 and 2 percent in 2015. If that doesn’t happen, it could lead to negative outlooks for the end of 2015 and the rest of 2016.