Auto Sales Return to Pre-Meltdown Days – But How Long Will It Last?

By Jon LeSage, edi­tor of Used Car Mar­ket Reports

What a great year for auto sales in 2013 – 15.6M units sold, up 7.6% from 2012, accord­ing to Auto­da­ta Corp. It’s the best year since 2007 before it all plum­met­ed with a gaso­line price spike and eco­nom­ic melt­down.

Auto indus­try exec­u­tives expect gains to con­tin­ue, but at a slow­er pace. US auto sales have rebound­ed, but future growth will be hard­er to come by, accord­ing to The Wall Street Jour­nal.

Here are a few trends that auto ana­lysts are watch­ing to see how the mar­ket per­forms in 2014 and beyond…..

  1. Ana­lysts and indus­try exec­u­tives do see growth com­ing this year – up to about 16M new vehi­cles expect­ed.
  2. Light-duty pick­ups and sport-util­i­ty/crossover vehi­cles saw a very strong year. That should con­tin­ue. New pick­up truck mod­els are rolling out, which is expect­ed to strength­en inter­est in the prod­ucts. Gaso­line prices aren’t expect­ed to increase by very much this year, which should help light-duty truck sales.
  3. Incen­tives have been restrained and that should con­tin­ue. Much of it came through very com­pet­i­tive lease deals in 2013. With a high vol­ume of off-lease units com­ing back to remar­ket­ing chan­nels this year, much atten­tion will be giv­en to how new vehi­cle leas­es will be incen­tivized.
  4. Fleet vehi­cle sales are also expect­ed to be main­tained at a more restrained lev­el than was being done five-to-10 years ago.
  5. Chrysler Group is expect­ed to have a sol­id year. Its cred­it rat­ing was just raised one grade by Stan­dard & Poor’s Corp., after Fiat SpA reached a deal to acquire the rest of the Detroit automak­er.
  6. Con­sumers are will­ing spend more on the trans­ac­tion price at $32,077 – up 1.4% from a year ear­li­er and up 10% from 2005. Growth in lux­u­ry vehi­cle sales is help­ing that trend.
  7. Ana­lysts will be watch­ing how the mar­ket per­forms this year and next – if this growth con­tin­ues, flat­tens out, or reduces. Will the pent-up demand surge be sat­is­fied and soft­en? Will younger con­sumers buy enough cars?


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