Auto Sales Expected to Continue Growth, Increase in 2012

As 2011 comes to an end with the pace of auto sales accelerating, industry analysts expect the trend will continue in 2012.  New products, such as the BMW‑3 Series and the 2013 versions of the Ford Fusion and Chevrolet Malibu will lure buyers in their segments.  Improved selection and loosening credit conditions will also help entice buyers.

Truecar​.com market analyst Jesse Toprak expects 2012 light vehicle sales of 13.8 million units, up from about 12.8 million in 2011. "The fundamental consumer demand has improved this year and will continue to improve further in 2012," Toprak says. "The myth of pent-up demand has turned out to be at least partially true: Consumers at some point need to get a new car."  Edmonds​.com Chief Economist Dr. Lacey Plache agrees, adding, “with annual sales still far below the level achieved prior to the last recession, there’s plenty of indication that pent-up demand is far from spent.”

Widespread projections of continued economic growth, albeit slow growth, combined with a surge in sales in the current quarter, buttress expectations for continued growth in 2012 sales. An estimated 13.6 million new cars and trucks will be sold in 2012, according to a new auto sales forecast released recently by Edmunds​.com. The forecast anticipates a solid increase over 2011 new car sales, which could come in as high as 12.8 million vehicles when December 2011 comes to a close.

From January until April 2012, the industry will see the tail end of the current “mini-bubble” of auto sales generated by car buyers who steered away from high prices and poor selection at dealer lots last summer following the Japanese earthquake. Of those months, sales are likely to peak in March, a popular car-buying month.

At that point, seasonal factors will resume as a key influence on sales in 2012, resulting in more volatile sales on a monthly basis as opposed to the flat line monthly sales that we saw this year from May through November. Specifically, next summer’s sales will be influenced in May by graduation-related purchases and again in August by the summer sell-down of current year models, then popular year-end sales events should continue to keep the recent trend of strong November and December sales performances well intact.

Next year won’t be without obstacles, though. Dr. Plache says that the continued slow pace of the economic recovery and uncertainty in the months leading up to the U.S. Presidential election may constrain sales growth. Threats of a European recession and a Chinese economic slowdown will also pose a risk to growth in the auto market, and if these or other negative events shake the marketplace, new vehicle sales momentum could weaken.

[Source:  Reed, Ted.  "More Sales, More Luxury in 2012 Car Sales."  The Street.  13 Dec. 2011.  Web.  20 Dec. 2011; "Edmonds​.com 2012 New Auto Sales Forecast."  Edmonds​.com.  19 Dec. 2011.  Web.  20 Dec. 2011.]