New vehicle sales will rise slightly in the United States this year on the strength of a growing economy, strong demand for crossover vehicles and a continuation of consumer incentives, the National Automobile Dealers Association predicted on Sunday.
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The Associated Press (AP) said NADA chief economist Paul Taylor, speaking at the organisation’s 88th annual convention, projected new car and light truck sales of 16.9 million units in 2005, up from 16.86 million in 2004.
Autodata Corp., another source for vehicle sales, pegged last year’s US tally at 16.91 million units – one of the best on record, AP noted.
The report said Taylor’s prediction is in line with many industry forecasts – General Motors has said it expects the US market to be down slightly in 2005, while Ford predicts business will be flat.
“The key to sales of 16.9 million will be the continued strong economy and sustained incentives,” Taylor reportedly said. “If manufacturers increase incentives, sales over 16.9 million units are clearly possible.”
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By GlobalDataCiting Autodata, AP said US vehicle sales have topped 17 million only twice – in 2000 and 2001.
The Associated Press noted that the health of the vehicle industry is considered key to the US economy – GM has said it alone accounts for roughly 1% of the national gross domestic product, which measures the value of all goods and services produced within the United States. Automobile sales account for approximately one-fifth of total retail sales tracked by the US Commerce Department, AP added.
The NADA reportedly expects incentives to average about $US2,500 a vehicle this year, AP said, noting that the average incentive for each vehicle sold in the United States in December was $2,512, a 2.3% increase from December 2003, according to Edmunds.com.
Taylor reportedly said he expects the growth in sales this year to come largely from crossover vehicles and large cars. He also said the increasing number of crossovers on the market – such as the Nissan Murano and Ford Freestyle – has led to a decline in bigger, truck-based SUVs – more so than rising fuel prices.
As for individual automakers, Taylor said he expects GM and Ford to at least maintain their share of the US market in 2005, helped by a slew of new vehicles introduced in the past several months, AP reported.
But he also reportedly expects Asian brands to continue to expand their businesses in the United States – a common pattern in recent years.
As a trio, Japan’s Big Three automakers – Toyota, Honda and Nissan – saw their U.S. market share rise from 24.1% in 2003 to 26.2% in 2004, while GM, Ford and Chrysler saw their combined share fall to an all-time low of 58.7% last year, down from 60.2% in 2003, the Associated Press said.
