Edmunds forecasts that the US light vehicle market will reach 16.4m units in 2014, a 6% gain on a projected 15.5m sales in 2013.
Such a market total would cement recovery in the US automotive sector and would be the highest level for the auto industry since 2006. In 2009 at the height of the recession, annual light vehicle sales hit a low of just 10.4m units and have been recovering steadily since.
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“The average age of all light vehicles on the road climbed to 11.4 years in 2013, and an ageing fleet will continue to force buyers back to the market next year,” says Edmunds.com Chief Economist Dr. Lacey Plache. “With used car prices still elevated over past norms and used car supply still tight, the new car market will remain attractive to many of these buyers.”
Edmunds also said that sales will also benefit in 2014 from an expected 300,000 additional lease returners compared to 2013, who will lease or buy a new vehicle when their current leases terminate. Their analysis also points out that with recent auto sales showing resiliency in the face of fiscal uncertainty at home and slowing economies abroad, downside risk to sales growth has decreased for 2014.
The main drag on sales growth expected in 2014 comes from the need for stronger economic growth to allow many of the remaining sidelined buyers to return to the market, including young people, lower income households, and small businesses, Edmunds says.
