America’s Society of Automotive Analysts (SAA) has painted a bright picture of US future growth – albeit with certain caveats – ahead of the start of this year’s North American International Auto Show (NAIAS) in Detroit.
Protesters, apparently demonstrating against the parlous state of Detroit city’s finances outside the Cobo Center, provided a sober counterpoint to the upbeat mood inside the cavernous motor show but were not enough to dampen the positive noises emanating from the analyst community.
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“The US economy is the strongest economy in the world,” said Federal Reserve Bank of Chicago senior economist, William Strauss, addressing this year’s SAA Outlook Conference at the Cobo, although he laced his comments with a certain caution.
“Yes, we are growing and growth is decent, but by no means spectacular. The housing industry appears to be on the mend, home values are rising.
“The recovery is broad-based with motor vehicles, primary metals and machinery manufacturing leading the way, vehicle sales are forecast rising 3% this year and next.”
For her part, Edmunds industry analysis senior director, Jessica Caldwell, cited 2013 figures of 15.6m units in the US as “healthy,” compared to previous years where incentives had propped up the market.
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By GlobalDataBarclays managing director senior equity analyst, Brian Johnson, emphasised the importance of rising US oil supply as key to building confidence among the auto buying community and stabilising prices.
“We are in a new era of energy production – oil prices really affect the mood of car buyers,” he said, also highlighting the importance of an aging population. “In developed markets, we are getting older. “This is the one thing can predict with the most certainty.
Despite that optimism, Johnson cautioned stubbornly high youth unemployment could act as a brake on new car purchases, as well as an average US monthly student debt repayment of US$180 per month, which was also a potential barrier to auto sales.
But the Barclays analyst equally cited “normalised 16m SAAR” sales in the US, fuel economy regulations pushing vehicle improvements across all car sizes and connectivity advances all as key auto drivers.
Strauss also highlighted the modest population increase in the 300m or so US citizens as potentially generating further auto stimulus.
“Population growth in the US is just under 1%,” he said. “That will create 3m individuals each and every year, so the driving population will continue to rise.”
