Morgan Stanley sees 17 million sales in '15

DETROIT -- Pent-up demand will drive U.S. light-vehicle sales to 17 million units by 2015, from 2012's 14.5 million, Morgan Stanley Managing Director Adam Jonas told the Automotive News World Congress.

The average vehicle on the road in the United States is 11 years old, representing a lot of pent-up demand, he said, joking that nearly half the cars on the road today have tape decks.

But there is a big difference between having pent-up demand and releasing it, he said.

Jonas said the level of pent-up demand, which grew during the recession, reflects the auto industry's interplay with credit, which has become more available, and with the housing market, which has been improving.

The housing market's recovery is fundamentally good for auto stocks, he said.

"It's little wonder that U.S. auto sales are smashing through the five-year highs just when housing is coming out of hibernation," he said.

Last week, Morgan Stanley raised its 2013 U.S. light-vehicle sales forecast to 16 million units, from 15.5 million.

Housing and auto markets in general have a strong correlation, while housing and the pickup segment have an even stronger correlation, Morgan Stanley data show.

The housing market recovery could spur a rebound in U.S. pickup sales, which would be "higher than we're even physically able to produce at this point," he said. This would be good news for automakers' profitability, he said. But he predicted that their profitability will probably peak in 2013.

Of automakers' profitability, Jonas said that even if sales continue to rise, "we've been on a nice escalator and we think at some point we're going to be entering a treadmill."