Kelley Blue Book analysts have forecast that new-car sales will exceed 15 million units in 2013, continuing the upward buying trend that the industry has witnessed since its 2009 low. In a statement released Thursday, the firm also predicted that sales for this year will total 14.4 million, an increase nearly 1.6 million units from last year.
Analysts at the Irvine-based firm cited various positive economic factors that fueled their predictions, namely increased consumer demand, historically low interest rates, and modest improvements in the overall economy. Their estimate comes amidst new data that suggest a slight improvement for United States’ GDP in the third quarter.
According to Kelley Blue Book statistics, sales of new cars have steadily increased since hitting the recession low in 2009. New auto sales in 2010 and 2011 increased by 1.2 million units each year, with total sales for each year equaling 11.6 million and 12.8 million respectively.
In large part, the statement attributes the predicted increase in sales to high consumer demand. Currently, the average car on the road is 11 years old, and many drivers may be looking to replace their current vehicles in 2013.
“There will be plenty of consumers needing to trade-up to something new to replace a vehicle on its last legs,” said Alec Gutierrez, a senior market analyst at Kelley Blue Book.
The statement also cites 2010’s car-leasing boom as a potential indicator for increased demand in 2013. Approximately 600,000 vehicles were leased during 2010, and as those leases begin to expire, analysts predict that up to 500,000 additional buyers could enter the market.
Other factors will also contribute to the sales increase. In addition to consumer need, continued low interest rates are likely to entice individuals to buy cars next year, and further loosening of bank lending standards will allow those individuals to get credit to purchase new vehicles.
However, while the statement acknowledges recent positive economic data, particularly last months drop in unemployment and bump in consumer confidence, it also warns that more significant economic improvements will be needed to support sales of 16 million units or more. As the Consumer Confidence Index sits at a historically low 70.3 and national unemployment hovers just under 8 percent, the statement insists that the car industry will not see pre-recession sales levels until consumer confidence is above 100 and unemployment is well below 7 percent.
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