Industry Optimistic, While U.S. Drivers Keep Cars Longer
At the same time, a just-published analysis by Polk reveals that U.S. drivers are keeping their cars longer and longer. The average age for cars and light trucks is now 10.8 years.
Is there some contradiction here? Not really, since neither Polk nor the automakers expect the trend of driving older, high-mileage cars to continue rising. That is, a lot of pent-up demand for new cars has been building since 2008.
Another factor driving new-car sales is an improved product. The industry is making some of its best (and longest-lasting) products ever, cars like the 2013 Ford Fusion.
Last year, U.S. car sales were 12.8 million, up 10.3 percent over 2010. This year, the car chiefs are talking 13.8 million and doing some chest-thumping, like Mercedes-Benz USA CEO Steve Cannon:
For every one customer that leaves and migrates to Lexus, four migrate from Lexus and come to us.
We don’t produce trucks, nor taxis or buses. We don’t produce sofas on wheels—and we don’t take mass-market vehicles and rebadge them as premium.
Take that, schweinhund kompetitors!
These happy/feisty predictions assume that the economy will continue improving, even as Europe’s remains very shaky. Car prices keep rising, and the main reason people can anticipate buying a new car is low-interest financing. Which equals more debt, of course, against generally stagnant wages.
So I come down on the side of caution in the face of all the industry hoopla. Yes, the immediate outlook is good, and no, there are still many glitches lurking in the software.
Do you think the auto industry can sell 13.8 million cars in the U.S., as predicted, this year?