Forecasts drop for 2012, 2013 U.S. auto sales
Photo credit: Joe Wilssens
TRAVERSE CITY, Mich. -- For much of this year, gains in U.S. auto sales have been a bright spot in an economy that remains weighed down by joblessness, a still-sluggish housing market and global uncertainty.
Now, those outside factors have started to drag on the auto industry, likely slowing the rate that sales will grow through 2013, analysts said here today at the 2012 Management Briefing Seminars.
One analyst, Jeff Schuster of LMC Automotive, said he has lowered his forecasts for this year and next year by about 200,000 units each. He now expects 2012 light-vehicle sales of 14.3 million and 2013 sales of 15 million.
"We're looking at a consumer that's getting jittery again," Schuster said. "That is driving a lot of volatility again, and that does play out in the vehicle market as we look at the second half of the year. We don't see things going negative; we just don't see things growing as strongly as we had seen previously."
LMC's 2012 forecast had been the highest of 11 listed during a presentation at the seminars. The others range from 14 million to 14.4 million, any of which would still make this year the industry's best since 2007. The industry posted a seasonally adjusted annualized selling rate of 14.1 million in July, down from the 14.3 million in June.
"We're not seeing anything in the leading indicators that suggests we're about to embark on an acceleration of economic activity," said Ellen Hughes-Cromwick, chief economist at Ford Motor Co.
A positive note
On the positive side, the analysts said housing prices appear to have hit bottom in much of the country, setting the stage for any growth in that sector to begin propelling auto sales higher. Economic growth is projected to increase to 3 percent in 2013 from an estimated 2 percent this year. Sean McAlinden, the chief economist at the Center for Automotive Research, said 3 percent economic growth has traditionally been the minimum necessary to support strong auto sales during past recoveries.
In addition, dealer inventories are back to normal levels after short supplies hampered sales for Toyota and Honda in 2011, said Paul Taylor, the chief economist at the National Automobile Dealers Association. NADA's current 2012 sales forecast is at 14 million, but Taylor said he expects to adjust that figure upward after August sales are reported.
"Confidence is, at best, mediocre right now," Taylor said. "Consumers will gradually get more confident in this economy as various parts of it begin functioning better."
Longer-range, the analysts generally said they foresee U.S. sales to rise to about 16 million by 2015. But while LMC projects sales to reach 17 million -- matching the levels automakers enjoyed in the early 2000s -- McAlinden and Anthony Pratt of Polk each said they expect sales to level off around 16 million before declining to 15.5 million in 2018.
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