In their 15th annual Automotive Study, A.T. Kearney indicates that U.S. auto sales will likely come in at 13.2 million in 2011 and trend to 16 million by 2013. The study highlights pent up demand of 32 million units (new and used) and a 15 million post-recession “newly sub-prime” group which could be a $3.2 billion opportunity for automakers who begin to better understand the buyers with lower FICO scores.
“Behind the forecast, four key macroeconomic factors were measured. Economic recovery scenarios were developed to project the possible outcomes, the variables being: 1) overall economic growth; 2) credit availability; 3) consumer prices; and 4) consumer confidence. Pent-up demand and whether the recent downturn will resemble prior recessions adds additional factors, as does vehicle age and the need to replace older cars, the current average age being 10.4 years. The forecast’s wild card is Japan, where in the aftermath of the earthquake and tsunami, parts shortages will impact 2011 U.S. new vehicle sales by 200,000 units. Dan Cheng, partner and leader of A.T. Kearney’s Automotive Practice, notes, “Given what we know about production downtime, in 2011 we see 328,000 U.S. customers of the affected brands up for grabs, and more if the time to wait for a particular brand begins to extend.”
The study also considers the renewed interest in fuel economy and the fact that newer cars, even bigger ones, are getting substantially better fuel economy than the existing fleet on the roadways today.
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