IHS hikes 2014 U.S. auto sales forecast to 16.4 million

Low interest rates, moderate fuel prices and new models packed with Internet-connected cockpits and fuel-saving engines are luring buyers to dealership showrooms and lots. Photo credit: TOM WOROBEC

DETROIT (Bloomberg) -- U.S. auto sales, buoyed by increasing consumer confidence and cheap financing, are rising faster than expected and will reach 16.4 million this year and climb to 17.4 million in 2017, consultant IHS Automotive said.

"The recovery's positive spirit leads to people making big-ticket purchases, whereas they had been hesitant in the past," Henner Lehne, IHS senior director of global light-vehicle forecasting, said today at a briefing in Southfield, Mich. "The housing market is improving, there's a good business climate and you have credit availability."

IHS raised its U.S. light-vehicle sales forecast to 16.4 million this year, the most since 2006, from 16.25 million as the pace of deliveries exceeded expectations in recent months, Lehne said.

Last year, Americans purchased 15.6 million cars and light trucks.

Low interest rates, moderate fuel prices and new models packed with Internet-connected cockpits and fuel-saving engines are luring buyers to showrooms.

That has automakers cranking up factories. U.S. assembly of cars and light trucks surged 13 percent in July to a 12.85 million annual pace, the highest production since May 2000, data from the Federal Reserve show.

Globally, auto sales will climb 2.9 percent this year to 85.7 million from 83.3 million last year, Lehne said. China will drive the growth with an increase of 1.9 million for light vehicle sales, Lehne said.

China's auto sales will reach 23.3 million this year and rise to 24.9 million next year, he said. "In China, there is just so much room for growth," Lehne said.

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