Edmunds Raises 2013 Forecast to 15.5 Million Units
With consumers once again feeling the ‘wealth effects,’ Edmunds.com raises its outlook for new-vehicle sales this year to 15.5 million units. If realized, 2013 would mark the best year for sales since 2007.
SANTA MONICA, Calif. — Edmunds.com sees reason for the automotive industry to be optimistic about car sales for the rest of the year, and is raising its 2013 light vehicle sales forecast to 15.5 million units. The industry hasn’t achieved that level of annual sales since 2007.
“Car shoppers seem unfazed by fiscal issues in the news,” commented Edmunds.com Chief Economist Lacey Plache, PhD. “Even though consumer confidence has been up and down so far this year, there are ‘wealth effects’ that are making Americans feel comfortable finally buying the new cars they’ve been waiting for.”
Dr. Plache explained that many people are feeling wealthier thanks to rising home prices and the strong stock market. Many have refinanced their home mortgages, which Edmunds.com estimates saved homeowners $210 per month — enough to budget for a car payment.
The improving labor market has put additional cash in some buyers’ pockets, and credit has been loosening more and more since the recovery began, which is key to car sales.
The fiscal cliff, the sequester and financial news from overseas have not had any noticeable impact on car shopping trends in 2013, said Dr. Plache. But she cautions that any drama at home or abroad that rocks the stock market or dominates news headlines could deter some car shoppers.
Looking ahead, the industry still has an ace up its sleeve: More car leases are set to expire in the second half of this year than in the comparable period last year, which means that a number of car shoppers will be entering the market at that time. This will likely give the industry a solid year-over-year increase even when taking into account the strong 2012 finish.
“Sales per driver and vehicles per driver will remain below pre-recession levels even with 2013 sales of 15.5 million cars, so there is room for even more improvement in 2014 and beyond,” notes Dr. Plache. “Automakers and car dealers with the right products and branding messages are looking at a great growth opportunity.”
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