United States Autos Report Q2 2012

In line with BMI's view that pent-up demand and more fuel efficient vehicles on offer would enable the industry to better prepare for soaring fuel costs now than in 2008, total light vehicle sales were up 13.8% year-on-year (y-o-y) in the first two months of 2012. With improved supplies of Japanese passenger cars added in as they recover from the earthquake and tsunami of March 2011, this augurs well for another year of strong growth. So much so, that BMI has revised its forecast for passenger car sales growth to 15%, which would take car sales over 7mn units for the first time since 2007.

The key driver of sales is improved fuel efficiency, especially as the average age of cars is at a high of 11 years. Drivers are looking for the more fuel efficient version of their car or truck, rather than choosing a smaller vehicle to cut fuel costs. Improvements to the vehicles on offer is evidenced by fuel efficiency data coming out of the US, which show a second consecutive month of record fuel-efficiency in February 2012. The total light vehicles sold in February had a combined fuel consumption of 23.9 miles per gallon (mpg), which was a further improvement on the previous record of 23.5mpg set in January. Based on BMI's revised oil price forecasts, which now show Brent averaging over US$100/bbl until 2021, compared with the previous projection for a drop to US$96 in 2014, which would be sustained, the moves toward more fuel-efficient vehicles are well timed.

One of BMI's core views for 2012 is that the US will become a highly favoured autos production and export base, mostly owing to its favourable currency for exports but also because of improved production efficiency. Toyota Motor has supported this view with news of a US$400mn investment to bring the hybrid version of its Highlander SUV, currently built solely in Japan, to Indiana. We believe Japanese brands will be at the forefront of this shift to increased North American production owing to the strong yen, but as BMW's plans for the year show, we are right to believe that it will not just be Japanese companies making the move.

BMW announced investment of US$900mn for its South Carolina (SC) plant in January 2012. SC is now the leading US state for both vehicles and tyres, bolstering BMI's view that its business environment is supportive of the state becoming a major hub, especially for tyres. In 2011, exports of vehicles from SC rose 52% year-on-year (y-o-y), the highest increase of any product shipped from the state. As a result, it overtook Michigan as the country's leading state for vehicle exports - a position last held in 2009 on the back of BMW's expanding production and export facility.

Chapter 1 - Executive Summary

Chapter 2 - SWOT Analysis

United States Auto Industry SWOT

United States Political SWOT

United States Economic SWOT

Chapter 3 - Global Overview

Eurozone And EMs Pose Risks To Growth Outlook; US And Japan On The Rise

Table: Passenger Car Sales (Units), Jan-December

Chapter 4 - Industry Risk/Reward Ratings

Table: BMI Risk-Reward Ratings For The Autos Industry In The Americas

Chapter 5 - Macroeconomic Forecast Scenario

Table: United States - GDP By Expenditure, Real Growth %, -

Chapter 6 - Market Overview

Table: US Market Share

Table: Company Financials

Chapter 7 - Industry Forecast Scenario

Table: US Auto Sector - Historical Data And Forecasts, -

Chapter 8 - Competitive Landscape

Table: US - Top New Vehicle Sales (CBUs)

Table: North American Light Vehicle Output (CBUs)

Table: US - Top New Vehicle Sales (CBUs)

Sector Developments

Investment

Suppliers

Chapter 9 - Company Profiles

Ford Motor

General Motors

Chrysler

Johnson Controls

Chapter 10 - BMI Methodology

How We Generate Our Industry Forecasts

Sources

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