Enter your email address and start getting breaking law firm and legal news right now!
Polk Predicts 15-Million Milestone As Auto Industry Races Towards Recovery
Auto research firm, R.L. Polk & Co’s poll is a harbinger of good tidings for the US auto industry, revealing that the on the road-to-recovery industry would have its best year yet in 2013. The demand would get a boost as there were more new models being put up for sale and there was an increased demand for pick-up trucks, coupled with a more stable economy and easier access to loans and leases, Polk predicted that the sales could cross 15 million.
The poll expected vehicle registrations, a credible pointer of auto sales, to rise by 6.6 percent. It estimates that new vehicle registrations will swell by 900,000 and reach around 15.3 million for the entire year. Anthony Pratt, director of forecasting for the Americas at Polk said that if the economy does not get impacted negatively, the sales growth for the auto industry is likely to be very encouraging.
In 2009, with the recession driving the American economy to its nadir, auto sales faced a huge decline and sold less than 11 million. Since then the growth has been slow but steady. One of the prime factors is the introduction of newer models, which will renew interest and want car and truck owners to replace their old vehicles with newer ones. The poll found that 43 new models were ready to hit the market in 2013.
Tammy Darvish, vice president of DARCARS Automotive Group, that owns man dealerships in Washington DC, said that sales were picking up and that there were more people buying, unlike a few years ago.
Pratt echoed similar feelings saying that the average age of the cars on the road was 10 years and their owners will be looking forward to swap them with something new.
Banks were more accommodating and flexible with writing auto loans. Interest rates are low and around the historic lows of between 3 and 5 percent. The tenure is also being increased to at least 6 years, which works to around $452 per month, which is within reach of many people desirous of buying a car.
Hurricane Sandy destroyed an estimated 250,000 vehicles and owners flush with insurance money will want to replace them with new cars. Moreover, during the hurricane auto sales were seriously impacted and will also add to the growth in sales now.
Polk is not the only one that is optimistic about the auto industry, other forecasts are also predicting a plus 15 million sales and industry insiders are wondering if a 16 million figure could be breached.
Pratt says that it’s achievable, though doubtful. For that to happen the economy would have to grow faster than projected. He said, a 16-million sales target was possible in 2014 or 2015.
In percentage terms the estimated registration of new light-vehicles may not seem very high, a mere one million up from last year, but that is because the auto industry had salvaged most of its recession induced losses during the year.