By Mike Ramsey
The global auto industry is expected to produce 85 million sales in 2014, up from an estimated 82 million this year, IHS Automotive said in a forecast Monday.
By 2018 sales are forecast to break 100 million, according to the unit of business-information provider IHS Inc.
This global growth is driven by rising wealth in emerging markets as well as relatively moderate gasoline prices.
“In every major economy in the world we are expecting economic growth,” said Charles Chesbrough, an economist with IHS.
The U.S. market may rise 2.4% to 16.03 million from 15.65 million this year and to peak in 2017 at nearly 17 million before leveling off. IHS is bullish about the prospects for growth in auto sales and the U.S. economy.
“Consumer sentiment is going to get higher and that is going to be good for auto sales,” said Mr. Chesbrough said.
Auto sales since 2008 have been below the long-term trend of the previous decade. Even in 2013, sales will come in below 16 million, which was the normal pace for the previous 10 years.
Production in North America also is forecast to rise by 2.1 million vehicles between now and 2020, driven by new plants in the U.S. and Mexico. Asian auto makers are expected to add more than one million units of that capacity.
In a separate report, Deutsche Bank estimates global automobile sales will rise 4% in 2014, to 87.4 million light vehicles. That would be slightly ahead of the 3.5% growth the industry is on track to hit for this year, when global auto sales are expected to total 84 million vehicles. Total auto sales estimates can vary because of inconsistencies in reporting by different countries and whether heavier duty vehicles are included in the total.
The key drivers will be a return to growth in Europe and continued strong demand in the U.S. and China.
After six years of declines in new-car sales, Europe should see a rise of 3% in 2014, to about 14 million light vehicles, according to Deutsche Bank’s forecast. While that total would be an improvement from 2013, it would still be well below the 18 million new cars and light commercial vehicles that were sold in 2007. The bank says an aging fleet of cars on European roads, and a shortage of used cars, will prod more buyers to showrooms next year.
The U.S. market should expand 3% next year, to about 16.1 million cars and light trucks, mainly due to an improving economy, Deutsche said. The bank sees the U.S. economy growing 3% next year, and estimates that will give Americans $319 billion in additional disposable income. It predicts about $13 billion of that sum will be spent on new cars.
The U.S. should also get a lift as consumers who signed three-year leases on new cars in 2011 look to trade in for new vehicles. Leasing plunged between 2008 and 2010, and the rebound in leasing since them should provide a steady stream of ready customers for 2014, 2015 and 2016, Deutsche Bank wrote.
The Chinese market for cars should grow 10% next year, to 23.8 million cars and light trucks. That is still a robust rate but down from the 13% increase the market will see for 2013. For this year auto sales are seen reaching 21.7 million vehicles.
Source: Market Watch
