Automakers to Promote Luxury Units and Leases in 2012

Globally, automakers are expecting a strong 2012. Demand in the U.S., the world’s third largest market, will be solid, but outpaced by faster-​growing economies. This year, U.S. automakers will likely be revving up their ad budgets to compete with international manufacturers who have set aggressive targets in the U.S. market and they’ll also be promoting luxury vehicles and lease financing.

According to Polk, about 77.7 million new vehicles will be sold in the global market this year. This sales level represents a 6.7% increase over 2011. Not surprisingly, China will lead the way with an expected jump of 16% and total units sold of 17.9 million. Only Europe will see higher demand with an anticipated new unit sales level of 19 million. In the U.S., automakers expect to sell about 13.7 million new vehicles, which reflects a growth rate of 7.3% over last  year. But some sectors will fare better than others.  Analysts believe the luxury segment will see at least 14% growth. Anthony Pratt, director of forecasting for the Americas at Polk, says, “More affluent buyers are returning to the market for new vehicles, after three years of spending reductions.” To fuel demand, dealers will be promoting leases. In the luxury category, about 41.5% of sales involve leases. However, leases are part of only 17.1% of U.S. auto transactions overall.

Analysts also expect Toyota and Honda to come back from the disasters they encountered last year. And with respect to European competition, Volkswagen is coming after U.S. buyers with its new Beetle.  The major U.S. companies, GM, Ford and Chrysler, will be rolling out their own updated products as well. All of this activity in the market is certain to generate higher ad spending to grab the attention of consumers.

[Source: Polk Issues Global Auto Forecast. Polk​.com. 3 Jan. 2012. Web. 11 Jan. 2012] 
Kathy Crosett
Kathy is the Vice President of Research for SalesFuel. She holds a Masters in Business Administration from the University of Vermont and oversees a staff of researchers, writers and content providers for SalesFuel. Previously, she was co-​owner of several small businesses in the health care services sector.