Despite what appear to be growing odds, the U.S. new-vehicle market is still on track for growth this year to a forecast 16.3 million units, according to JD Power.

The company reiterated its full-year outlook at the Automotive Forum event in advance of the New York International Auto Show, where it held to its earlier prediction despite the supply shock from the U.S.-Israel war in the Middle East.

Its analysts see multiple reasons for the positive market mindset, though they qualified the forecast as “cautiously optimistic.”

“There is no doubt that the current situation in the Middle East will make things more difficult to predict over the near-term, and the longer-term risks to auto sales are material, but the fundamentals are strong for a solid year in 2026,” said JD Power OEM Solutions President Thomas King.

The company cited several reasons for its optimism, including the kind of adaptation that has helped the auto industry weather the pandemic and U.S. trade tariffs.

Supply sourcing diversification, increasingly flexible operations and other measures make the sector better able to respond to shocks, JD Power said.

Other reasons it gave for optimism include:

• Strong used-vehicle prices, up about 3% year-over-year due to lingering limited supply from the pandemic-era production slowdown. The dynamic facilitates today’s new-vehicle sales by way of strong consumer trade-in positions.
• Despite higher new-vehicle prices, overall per-vehicle automaker incentive spending is slated to increase 5% this year to $3,325.
• Though gas prices have skyrocketed since the war started, greater new-vehicle fuel efficiency than many trade-ins afford can spur sales.

“On a relative basis, fuel cost as a percentage of financed monthly payments for gasoline-powered vehicles remains below levels observed four years ago, indicating that today’s buyers are less vulnerable to fuel price fluctuations,” JD Power said.

 LEARN MORE: Auto Dealers Cautiously Hopeful