The recovery to the US light vehicle market is expected to maintain momentum this year, according to a market analyst who spoke to just-auto.
Jeff Schuster, analyst at LMC Automotive’s US office, says that January’s market result is likely to continue the sales strength that marked the fourth quarter of last year.
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“The January light vehicle market seasonally adjusted selling rate is likely to come in at around 13.5m – around the same as December,” Schuster maintains.
Schuster also notes that incentives are flat and running at around the level they were at a year ago.
“The market is seeing some underlying strength due to replacement demand and some improvement to the economy,” he says. “For example, we now expect that the US unemployment rate will not be as high as 8.5% in 2012. Many had previously expected it to be over 9% this year.”
The US market ended 2011 on a high note. Light vehicle sales rose 8.9% to an estimated 1.24m units, producing a seasonally adjusted annualised rate (SAAR) of 13.56m, down slightly from November’s 13.63m mark but still the second best reading of the year. Full year sales came in somewhat above 12.7m, in line with just-auto estimates.
Forecasts for 2012 are generally in the mid-to-upper 13m range. Recent sales have been robust but some worry the good results were driven by pent-up demand that may have been mostly satisfied. The US economy is recovering, albeit slowly, but there are still risks that could throw a spanner into the works.
Schuster stresses that there are risks to the US economy and that the crisis in Europe ‘remains a risk-factor’ in terms of its potential to adversely impact the global economy, but he expects the recovery to US vehicle sales to continue in 2012.
“We are forecasting a 13.8m market this year,” Schuster maintains. “But there are certainly some risks to that market forecast.”
What about prospects for the Detroit Three and others who saw share gains in 2011 which were helped by the exceptional difficulties that hit the Japanese makers especially hard? Schuster expects some claw-back in 2012.
“The competitive picture will be intense this year,” he says.
“And the Japanese OEMs will certainly win back some of the share that was eroded last year. Will they get it all back? I very much doubt that. The competition will be extremely tough and the revitalised Detroit makers, and others, will be determined to hang on to as much share as they can.”
