The U.S. economy will avoid a double-dip recession as auto sales continue to climb back toward 16 million a year, says AutoNation Inc. CEO Mike Jackson.
"There is so much stimulus in this economy" that another downturn will be avoided, Jackson told dealers last week at a Washington Area New Automobile Dealers Association luncheon.
And while the recovery is anemic, "if there's a bright side in this economy, it is the auto industry," said the chief of the nation's largest retailer.
Jackson is not yet giving a forecast for 2012 but says U.S. auto sales will increase from the 12.6 million or 12.7 million units likely in 2011.
Longer term, though, reaching 16 million annual sales may take two or three years, he said. "We're on a journey back to selling 16 million units a year."
He said the projected rebound has three drivers.
1. Demographics support it. With 14 million vehicles taken off the road annually, the scrappage rate exceeds new vehicle sales. Vehicles are getting older with the average age up to 11 years, he said. And 1 million new households are being formed annually.
"You see it in the showroom every day: People need to replace their vehicles," Jackson said.
2. Automakers are producing better vehicles than ever before with innovative new technology.
3. In a reversal of the credit crisis that triggered the industry downturn, great financing options are available.
"If there's one lesson from 2008, it's that people will make their car payments," Jackson said. "People will pay for their cars before they'll pay for their house and before they'll pay for their credit cards."