U.S. sales growth to slow, yield healthy industry results, Power says
Automakers building to demand, dealer profits up
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The rise in U.S. auto sales will slow in coming years but is unfolding the right way, analysts say, with automakers building to demand and dealers' profitability improving. Photo credit: REUTERS |
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ORLANDO -- The double-digit sales increases notched by the U.S. auto industry since 2009 will give way to slower but steady growth through 2015, J.D. Power and Associates predicts.
Sales should grow percent this year, to 15.1 million, followed by 4 percent gains in each of the next two years, according to a forecast presented at the J.D. Power International Automotive Roundtable here today.
A recovery in the U.S. housing market, a slew of new products, pent-up demand and ample credit availability will drive growth, said John Humphrey, senior vice president of J.D. Power's global automotive operations.
Most promising, Humphrey said, is that the growth is happening the right way, with automakers building to demand and dealers' profitability improving.
"What makes me more excited are the fundamentals that make these volumes more healthy than they had been in the past," Humphrey said.
The fundamentals include:
• Automakers are using 84 percent of their production capacity, the highest level in recent memory.
• Strong pricing: Average transaction prices hit $28,586 in 2012, a record high, J.D. Power says.
• The nation's 17,500 dealerships -- down from more than 20,000 in 2009 -- generally are enjoying better profitability and throughput.
Stronger leasing and the continued return of buyers with weak credit will help, too, Humphrey said.
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Humphrey: Auto industry volumes are more healthy than they have been in the past. Photo credit: JOE WILSSENS |
Lease penetration has grown each of the last four years to 21 percent in 2012, from 13 percent in 2009. And last year, sales to subprime buyers grew more than twice as fast as buyers with good credit.
Humphrey cited three risks to the forecast: Fallout from the European debt crisis; geopolitical risks in the Middle East and Asia; and the U.S. government failing to get its fiscal house in order, which could threaten the fragile economic recovery.
You can reach Mike Colias at mcolias@crain.com.
