Let’s look at record breaking 2015, the world economic outlook, and the automotive sector expectations for 2016 and beyond. How will you attack this potential growth?
Automotive Records Breaking:
The year 2015 was a record breaking year surpassing a record set 15 years ago in 2000. See the whole story below. It was a breakout year attributed to “low gasoline prices, pent-up demand, widespread credit availability, an increase in leasing and employment gains.”
Global Economies Stabilizing with Good Economic Prospects in Advanced Economies:
The year 2016 looks to be similar to 2015. Goldman Sachs forecasts 2016 growth at 2.2% which is slightly lower than 2015 or 2.4% Growth (See the images below) – also reported by CBSNews.
Yet Goldman sees economies Stabilizing and driving growth.
Most other forecasts are more optimistic.
While the World Bank has downgraded it forecasts for 2016 to 2.9% globally (down from its 3.3% forecast made in June), “[t]he economic prospects of advanced economies appear to be brightening as the developing world struggles. The World Bank expects the U.S. economy to grow 2.7 percent this year, up from 2.5 percent in 2015 and the fastest pace since 2006.”
Bill Conerly of Forbes reported “The global economy is poised for economic growth comparable to recent years’ performance”. He then injected that the International Monetary Fund released their World Economic Outlook, which provides a middle-of-the-road starting place for looking at the global economy. The IMF expects the world overall to expand in 2016 by 3.6 percent inflation adjusted, up from this year’s estimated 3.1 percent growth. Both advanced and emerging economies contribute to the improvement.
expecting “a Strong Economy for the 2016 Presidential Election”
About.com reports US economic prospects for 2016 as healthy with ideal growth between 2 and 3%.
Continued Growth in the US Automotive Sector:
Most conclusions are that the US Automotive Sector is expected to have GOOD growth in 2016.
In Forbes, Jim Henry expresses his predictions for the US Automotive sector as set to Top Out in 2016 and start to decline in 2017.
Auto sales in the U.S. should peak in 2017 before interest rates and other headwinds pose new challenges for automakers, analysts said …
The consultants have a rosy outlook for the U.S. …
“We’re back. We’re all the way back from the recession,” said Charles Chesbrough, senior principal economist at IHS Automotive.
Gautham Nagesh of the Wall Street Journal says the “Auto Industry Looks for Bumper Year in 2016” pointing to low loan rates, an improving labor market, and cheap gasoline.
Economic signs point to 2016 being the healthiest domestic auto industry in decades thanks to an improving labor market and low interest rates greasing U.S. demand. Cheap gasoline also is spurring sales of more profitable trucks and sport-utility vehicles, while the average cost of a vehicle sold is rising enough to offset rising sales incentives.
Now is the time to determine how you are going to participate more fully in this growing market; and take home more for your share of the prize.
By David Elmer Wolfensperger
Call or Text: 1 513 294-8767
Detroit 3, Nissan, Toyota, Honda finish 2015 on strong note as trucks set pace again
Editor’s note: An earlier version of this story provided incorrect context for December’s SAAR. It was the lowest since June.
The U.S. auto industry set a sales record in 2015 as solid December gains by the biggest automakers pushed the annual tally above the 17,402,486 mark set in 2000.
Automakers chalked up 17,470,659 light-vehicle sales last year, an increase of 5.7 percent over 2014, according to the Automotive News Data Center. The December increase of 8.9 percent was one of the year’s strongest, while the seasonally adjusted annual sales rate came in at 17.3 million, the lowest since June.
Among the largest automakers, Nissan Motor Co. was the biggest gainer, with a 19 percent jump from December 2014 levels. FCA US climbed 13 percent. Volume rose 11 percent at Toyota Motor Corp. and 10 percent at Honda Motor Co. Ford Motor Co. volume increased 8.3 percent while General Motors deliveries rose 5.7 percent.
Heading into today, most analysts had forecast a seasonally adjusted annual sales rate above 18 million and a 12-month total of 17.5 million light vehicles. GM and FCA said today the SAAR would come in slightly below 18 million.
U.S. sales continue to be driven by low gasoline prices, pent-up demand, widespread credit availability, an increase in leasing and employment gains.
Trucks, SUVs and crossovers continued to set the pace, jumping 19 percent in December and 13 percent in 2015. Car demand remains weak, falling 3.8 percent last month and 2.3 percent for the year.
“2015 was a standout year for the auto industry,” Bill Fay, group vice president and general manager for the Toyota division, said in a statement. “Best-ever light truck sales helped the Toyota division earn the retail sales crown for the fourth consecutive year.”
Volume rose 12 percent at the Toyota brand, 3.8 percent at Lexus and 44 percent at Scion last month.
Lexus passed Mercedes-Benz, but BMW held on in December to top the luxury segment in 2015 for its fourth sales crown in five years. The race was tight until the end. BMW finished 2015 with luxury sales of 346,023, followed by Lexus with 344,601 and Mercedes with 343,088, which excludes Sprinter deliveries. All three luxury brands, along with Audi and Porsche, set annual U.S. sales records last year.
Deliveries at Honda Motor Co. rose 9.9 percent with the Honda brand up 12 percent and Acura off 5.5 percent. The Honda brand, riding a wave of new or redesigned crossovers, set an annual record with 2015 deliveries of 1,409,386, up 2.6 percent.
Subaru’s U.S. sales advanced 13 percent last month, helping the brand to another annual milestone of 582,675 cars and light trucks sold, up 13 percent.
Among smaller automakers, December sales rose 18 percent at Mazda on strong truck volume, and 21 percent at Mitsubishi. Volvo saw volume surge 90 percent in December and 24 percent for the year.
Enhanced year-end discounts and five sales weekends in December put a solid cap on a sixth consecutive year of growth. There were also two extra selling days last month compared with December 2014.
Nissan’s December boosted the automaker’s gain for the year to 7.1 percent. The Nissan brand advanced 18 percent last month, helping set an annual sales record of 1,351,420. Infiniti volume rose 26 percent in December.
Fiat Chrysler, behind another stellar showing at the Jeep brand and more-generous holiday deals, extended its streak of gains to 69 consecutive months.
Deliveries increased 42 percent at Jeep, 4 percent at Ram, 6 percent at Dodge and 1 percent at Fiat, but volume slipped 21 percent at the Chrysler brand.
Overall, FCA’s U.S. truck sales jumped 22 percent while car demand slid 19 percent.
Jeep set an annual U.S. sales record with 865,028 deliveries. The Ram brand also posted its best sales year since it was spun off from Dodge in 2009.
Fiat Chrysler’s U.S. incentives averaged $3,553 last month, or 12 percent higher than December 2014, TrueCar estimated.
Ford deliveries were aided by an 8.1 percent gain at the Ford division and a 12 percent increase at Lincoln.
GM’s 5.7 percent increase included an 8 percent rise in retail sales. Volume rose 1.7 percent at Buick, 2.1 percent at Chevrolet, 13 percent at GMC and 29 percent at Cadillac.
On Monday, Edmunds projected that leases will account for a record 29 percent of all new U.S. retail sales in 2015. That is up 2 percentage points from 27 percent in 2014 and compares with a leasing rate of 16.6 percent just 10 years ago.
The growth in leasing is being spurred by higher vehicle and transaction prices. The average new-vehicle transaction price in 2015 was $33,188, up 2.5 percent from $32,386 in 2014, Edmunds says.
Overall, average industry incentives per vehicle rose 3.9 percent from December 2014 to $3,063 last month, TrueCar estimates.
Year-end deals and red-tag sales were plentiful across the U.S. last month:
• Kia dangled offers of no payments for five months, with the first two monthly payments — capped at $1,000 total — paid for by the company. That’s on top of 0 percent financing for up to 66 months.
• Average savings of $3,014, or nearly 15 percent, on a 2016 Jeep Compass Sport with all-wheel drive, according to TrueCar.
• Zero percent financing on a 2015 GMC Sierra 1500 for up to 72 months.
• A 2015 Volkswagen Tiguan available with zero percent financing for up to 60 months.
• Hyundai’s 2015 Genesis, with awd, was available for lease for $370 a month for 36 months and no down payment.
Among major automakers, FCA, Nissan and Hyundai/Kia gained U.S. market share last year while GM, Ford, Toyota, Honda and the VW Group lost ground.
Of the 14 auto brands that set U.S. sales records in 2014, four — Jeep, Land Rover, Porsche and Subaru — established new records in 2015 before December. Hyundai and Kia also set all-time highs for U.S. deliveries in 2015.
The final sales tally for 2015 marks the longest streak of annual gains since the 1920s and caps a spectacular comeback for the industry. The sharp downturn of 2008-09 — sales slumped to a three-decade low of 10.4 million in 2009 — roiled the industry and saw two U.S. automakers, General Motors and Chrysler Group, seek bankruptcy protection under government supervision.
“It’s truly remarkable that the auto industry is finishing off its best year ever just six years after the depths of the Great Recession,” analyst Jessica Caldwell of Edmunds.com said. “Low-APR offers and tumbling gas prices are making it easy for shoppers to buy or lease a new car, but don’t overlook the products themselves. If you’re buying a new car today, you’re getting a safer, more fuel- efficient and more technologically packed vehicle than ever before.”
Nick Bunkley and Amy Wilson contributed to this report.
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