Analysts lower forecasts for U.S. light vehicle sales in 2011, 2012
August 12, 2011
Analysts lower forecasts for U.S. light vehicle sales in 2011, 2012
UPDATED: 8/12/11 6:00 p.m. ET
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DETROIT -- Analysts, citing the cloudier outlook for economic growth in coming months, are trimming their forecasts for U.S. light vehicle sales in 2011 and 2012.
J.D. Power and Associates today trimmed its estimate for 2011 light vehicle sales to 12.6 million from 12.9 million units, and its 2012 outlook has been cut to 14.1 million from 14.6 million units.
"Demand will continue to edge upward in the coming months but we won't reach the sales pace we saw early in 2011," Jeff Schuster, executive director of global forecasting at J.D. Power, said in an interview with Automotive News. "The economy is not going to grow in the second half as much as anticipated. Consumers are going to remain cautious for a while in the absence of robust job growth."
IHS Automotive reduced its estimate for U.S. auto sales in 2011 by 200,000 units to 12.5 million light vehicles.
IHS analyst Rebecca Lindland said the forecasting group also cut its estimate for 2012 deliveries in the U.S. to 13.5 million vehicles, from 14.7 million.
The Massachusetts-based researcher also lowered its estimate for light-vehicle sales in 2013 to 15 million, from 15.5 million.
Light-vehicle sales rose less than 1 percent in July, spurring some analysts to lower their outlook for 2011 industry sales.
JPMorgan Chase & Co. last week reduced its estimates for 2011 and 2012 by a combined 700,000 vehicle sales.
General Motors and Ford Motor Co. -- citing signs of weaker economic growth -- recently indicated they expect 2011 sales to come in at the low end of a range of 12.5 million to 13.5 million units.
Industry sales are up 11 percent this year through July, though growth has slowed in recent months because of inventory shortages following the March earthquake in Japan, rising gasoline prices and overall economic uncertainty.
A drop in discounts and higher new vehicle prices have also discouraged some buyers, analysts say.
On a broader level, high unemployment and the depressed housing market continue to undermine consumer confidence.
Ed Kim, director of industry analysis at AutoPacific Inc., said demand will remain sluggish for several months as consumers remain worried about the nation's debt, and the impact volatile equity markets have on their savings and wealth.
Lackluster job growth will also hold back new car and truck demand, Kim said.
AutoPacific's current forecast calls for 2011 light vehicle sales of 12.6 million units, up from an estimate of 12.45 million at the beginning of the year.
"Bad news is everywhere right now, and that will hamper consumers’ desire to buy new vehicles at the moment," Kim said.
The risk of a double-dip recession has increased sharply as the U.S. economy endures the impact of slowing growth and wild swings in global equity markets.
In a survey by The Wall Street Journal over the past week, 46 economists polled put the odds that the U.S. is already in another recession at 13 percent, while they peg the chances of another recession in the next year at 29 percent -- up from 17 percent only a month ago.
The Federal Reserve, signaling it sees meager to slow growth over the next two years, promised this week to hold short-term interest rates near zero through at least the middle of 2013.
Economists viewed the move as a sign the U.S. central bank has all but written off the chances of an expansion strong enough to drive up wages and prices.
You can reach David Phillips at dphillips@crain.com.Read more: http://www.autonews.com/apps/pbcs.dll/article?AID=/20110811/RETAIL01/308119609/1493#ixzz1UrRxQFqz