NADA's U.S. sales forecast is 'toward the top of the heap'
Pent-up demand helps fuel estimate of 14 million in '12
NADA’s Taylor: Fuel costs are the wild card.
LAS VEGAS -- NADA is bullish on 2012, forecasting that U.S. light-vehicle sales could hit 13.95 million this year.
Paul Taylor, NADA's chief economist, said several factors are helping to drive more showroom traffic, including stabilizing housing prices, pent-up demand among car buyers and a milder than anticipated recession in Europe.
"I find myself toward the top of the heap in terms of estimates," Taylor said at the convention. One of the biggest factors, he said, is encouraging news coming out of Europe, where government leaders are willing to bail out countries in peril of an economic meltdown.
"The financial markets in Europe have not imploded," he said. "We don't expect a severe recession in Europe."
Also, 2011 industry sales, while up from the prior year, were suppressed by an earthquake in Japan and flooding in Thailand, he said. As a result, many automakers were forced to cut pro- duction, leaving dealers without many high-demand models. U.S. light-vehicle sales were 12.8 million in 2011.
Now, Taylor said, production is coming back online, and dealers will have more cars and trucks to sell this year.
Other economic indicators, such as low interest rates and a drop in unemployment, also are signs that industry sales will grow at a faster clip than in 2011, he said.
Gasoline prices remain the one wild card, Taylor said. While fuel costs have climbed over the past few years, consumers are using less heating oil because of the mild winter in many parts of the United States. That could increase the supply of gasoline later in the year and help keep costs in check during the summer driving season, he said.
NADA analyst Jonathan Banks said the availability of used cars is expected to drop in 2012 as a result of more financing options and consumers replacing aging cars and trucks. The shrinking supplies could push used-vehicle prices up by 1.8 percent by year end, he said.
Dealers will have to continue to hunt for used vehicles, especially those that are 3 to 4 years old, Banks said. Consumers are driving their cars longer, and Banks said many owners driving aging cars and trucks will be looking for replacements in the used-car market.