J.D. Power & Associates predict a 1 million unit rise in the auto industry this year courtesy of loosening consumer credit and a gradual return by manufacturers to leasing. The U.S. retail forecast for this year is 9.6 million units, up from 8.6 million last year.
Credit is the key determining factor, as unemployment still remains rather high, but the economy does show signs of growth. A slowing economy has meant 7 million fewer units sold from 2000 to 2009, but given that scenario, there are many older cars on the road in need of replacements.
Leasing accounted for a huge chunk of the pre-recession retail auto market, accounting for 20-22 percent of total new sales in 2008. The leasing market took a huge hit with the recession, as GM and Chrysler nixed their lease programs, and Ford cut theirs significantly. Leasing is expected to creep back this year and account for 15-18 percent of new sales.
– By: Stephen Calogera
Source: Detroit News