Car sales to fall 30 percent by 2022, analyst predicts

Overall sales could drop to 14 million units.

New car sales have remained relatively steady over the last few quarters, but one industry analysts predicts the market is headed toward a cliff.

John Murphy, a senior auto analyst with Bank of America Merrill Lynch, said on Wednesday that he expects car sales to decrease by nearly 30 percent by 2022. That would mean industry sales of around 14 million units, down from record highs just over 17 million units.

"The industry is going through this process of what it is, what it should do and how it should operate, and what its current business strategy should be, and it's a challenge," Murphy said, according to The Detroit News. "You have to get your core business in great shape and that much better off than it has in the past so you can intake that success and fund the uncertain future.”

Learning from their mistakes during the last economic downturn, Murphy predicts automakers will refrain from offering discounts, which should help insure profitability, even at lower volumes. It should also help that automakers are heavily reliant on crossover utility vehicles, which are more profitable than typical passenger cars.

New vehicle introductions should also help keep the market afloat. Automakers are expected to introduce an average of 62 new products per year over the next four years, which is well above the usual average of 40. Those new products should keep customers interested and prevent sales from dipping any lower than 14 million units.

Although Murphy's outlook is bleak, there's light at the end of the tunnel; he expects the auto market to make a full recovery after the 2022 dip.