U.S. automotive sales are about 1 million units below where they should be given the long-term historical patterns in the industry.
That’s according to a range of analysts who spoke at the Center for Automotive Research’s Management Briefing Seminars held earlier this month in Traverse City.
Most analysts at the CAR conference expect U.S. light vehicle sales to reach about 16.2 million units this year, up from a recent low of 10.4 million in 2009. But if historical patterns had held up in the recovery, experts said they would have expected to see sales of around 17.4 million vehicles in 2014. That deviation from historical patterns has many in the industry questioning what’s changed.
The answer is part behavioral, part economic and part a reflection of the industry making better products. But economics trumps most other factors for people considering big-ticket purchases, analysts said.
“Consumers are cautiously optimistic,” said Emily Kolinski Morris, senior economist at Ford Motor Co. and one of the speakers at the CAR event. “They see the positive trends that are going on in the economy right now overall, but they are also observing that it is not flowing through to their real incomes to the extent they would like to see. So that’s a little bit of a red flag for consumers.”
While economists acknowledge that the economy of the last few years has been anything but normal, they pointed to a range of factors that have played a role in consumers’ vehicle-buying behavior. Moreover, it’s been the result of cross-generational shifts — not just related to the millennials, the industry’s favorite scapegoat, according to experts.