Auto Pacific: Three More Years of U.S. Auto Sales Growth

17 million light duty vehicles per year for the next 4 years.

Wayne Gerdes - CleanMPG - Feb. 19, 2015



With lower fuel prices, a shift away from efficient cars to less efficient CUVs will provide OEMs more profits in the near term.



AutoPacific released its 2015 U.S. light vehicle sales forecast with an expected 17 million vehicles sold, up 3.7 percent over the 16.4 million vehicles sold throughout all of 2014.



The company's 2015 forecast predicts a market share split of 55 percent trucks and 45 percent cars the largest truck share in U.S. history.



It is also forecasting continued nominal increases in U.S. light vehicle sales with a peak reached at just over 17 million vehicles in 2017.



Despite strong current and near term growth, AutoPacific forecasts a drop in sales volumes later in the decade. Why the decrease? According to Kim, a likely rise in interest rates in the coming years, along with Millennials waiting longer to buy their first new car are two reasons. Additionally, the average loan term will affect future sales.



Ed Kim, VP of Industry Analysis at AutoPacific:

Quote:

“U.S. sales recovery has been steady since hitting the bottom of the decline in 2009, though recent years have seen things taper off from 11% growth in 2010 to 6% in 2014, and a forecasted 3% growth this year. The big story is the compact CUV segment, which is seeing significant growth for both mainstream and premium brands.”

Rise of the CUVs.

Quote:

Originally Posted by Ed Kim “Consumers are enjoying low interest rates and low monthly payments, but they are financing their loans over a much longer period than they were a few years ago. With average loan periods now at 66 months compared to 48-months a few years ago, vehicle buyers will be in a negative equity position longer, and that will have a profound impact on replacement demand in the future.”

Even with heavy OEM incentives, the U.S. auto industry is profitable and continues to streamline for improved bottom lines looking forward. This should give rise to affordable low interest rate incentives for years to come.

1.15 million light duty vehicles sold in January of 2015 compared to the 1.01 million sold in January of 2014.

Given the very strong 13.9 percent January increase on a volume basis and 9.5 percent on a Daily Selling Rate (DSR) basis – 26 selling Days in January of 20915 vs. 25 days in January of 2014, I may be revising my own forecast upward to 17.3 million vehicles sold in the U.S. marketplace during all of 2015. We will be watching February and March sales results closely to see how these forecasts stack up.



AutoPacific achieves a 10-year average accuracy of 95%. As researchers and analysts, AutoPacific’s sales forecast methodology includes a review of economic factors as well as consumer data collected annually by AutoPacific to better understand vehicle buyer purchase intentions, including brand consideration and future segment intention.

Auto Pacific: Three More Years of U.S. Auto Sales Growth