The giddy sales forecast: Full speed ahead!

Predictions add up to a 15.8 million year

U.S. light-vehicle sales forecasts for 2013 range from 15.1 million to 15.5 million units.

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ORLANDO -- All that giddy optimism in the air at the National Automobile Dealers Association convention here was remarkable and appeared genuine. That's because, one by one, automakers have followed up their bold talk with big sales projections for 2013.

Tote up companies' predictions of their own anticipated volume, and you get almost 15.8 million units this year, 300,000 more than even the most buoyant industrywide forecast.

Is it irrational exuberance? Volume targets drive production plans, and if things don't pan out, the result could be an oversupply of vehicles and an ugly incentives war. So are carmakers headed down a dangerous path?

Hold on: Last year almost all companies did the same thing. They made audacious sales forecasts that sounded unreasonable -- and then they went out and met or bettered them.

A year ago, the sum of automakers' projections for 2012 totaled 600,000 units more than the most optimistic forecast for the industry, which was 13.8 million. Not every automaker hit its target, but sales caught fire in the second half, and the market came in at 14.5 million.

Once again in 2013, forecasts for the overall market are more conservative than the aggregate of carmakers' predictions for themselves. The forecasts from analysts and automakers range from 15.1 million to 15.5 million sales.

Lentz: “Turned the page on a lot of issues”

Revising forecasts

There are plenty of reasons to feel good about 2013.

NADA chief economist Paul Taylor, who forecasts a 15.4 million year, says sales will be supported by pent-up demand, credit availability, a shortage of used-vehicles, improving home values, declining unemployment and the skirting of the fiscal cliff.

Also, a glut of new products in high-volume segments is arriving. And the used-vehicle fleet is the oldest in history. The average car on the road is 11 years old.

In some cases, 2013 projections are already proving overly cautious.

Toyota Motor Sales initially said it would increase sales by 100,000 units this year. But that projection was made in October, before sales rocketed in the last three months. In January alone, Toyota achieved nearly one-third of its projected full-year gain. Now executives are recalculating their 2013 forecast and will come up with a substantially higher target.

"Last year was a breakout year for us," said Jim Lentz, CEO of Toyota Motor Sales. "We've turned the page on a lot of issues. As we roll into this year, that same momentum is going to continue."

Chevrolet told dealers at the NADA convention that its 7 percent growth objective was based on a 15.5 million year -- but added that Chevy might top 7 percent because of the 13 new or refreshed models arriving this year.

"We're calling it 15 to 15.5 million, and we think it could be the high end of that," said Kurt McNeil, General Motors' vice president of sales operations.

Several automakers, notably American Honda Motor Co., Hyundai Motor America, and several luxury brands, predict record years, even though a 15.8 million market would be well below the industry's all-time high of 17.4 million units in 2000.

American Honda expects a 9 percent sales increase, to 1.55 million this year. "We don't take anything for granted, but we have some tailwinds," said Mike Accavitti, American Honda's chief marketing officer. "We have incremental products which will have tremendously more volume."

Some brands are counting on buyers who delayed 2012 purchases because they couldn't find the exact car they wanted. BMW was No. 1 in luxury sales last year but could have done better except for a shortage of vehicles during the first eight months of 2012, said Ludwig Willisch, CEO of BMW of North America.

"We didn't have enough mix; we didn't have enough product," Willisch said. "That was all solved in the fourth quarter."

For 2013, no automaker predicts a sales decrease, market share loss or percentage gain less than the overall industry's projected growth. While some executives expect short supplies of certain products, they were confident other nameplates in their brand portfolio would cover the shortfall.

Kia Motors America will at least maintain its market share, said Tom Loveless, executive vice president of sales.

"Do the math," Loveless said. "We're forecasting industry sales of 15.3 million for this year. Even if we remain flat in market share, that's still a lot more business."

Accavitti: “We have some tailwinds.”

Small brands eye growth

Smaller mass-market brands also are eyeing growth. Robert Davis, senior vice president of Mazda's U.S. operations group, believes Mazda can top 300,000 units this year, up from 277,046 last year, despite declining fleet volumes. And while Subaru wants sales to grow to 365,000 vehicles, COO Tom Doll said that number could "be near 380,000 and 400,000."

Still, sales forecasting remains a dangerous business, even though carmakers mostly met or exceeded their objectives in 2012.

"There is no gain in predicting," said John Mendel, American Honda's executive vice president. "If you overpredict, you're a buffoon. If you underpredict, you're a buffoon."

With staff reports

You can reach Mark Rechtin at mrechtin@crain.com. -- Follow Mark on

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