Auto sales are poised to crack the 16 million mark in 2014, a number that if met will represent the fifth straight year of growth for the American car market.
Deliveries of new cars and light trucks are predicted to hit 16.1 million in 2014 according to 13 different analysts polled by Bloomberg News. That is close to 500,000 more vehicles than are expected to be sold this year. If the segment does continue on its current path of growth, it will mark the second time since WWII that the auto industry has seen five years of consecutive growth.
“It’s not just the number 16 that’s amazing,” George Magliano, chief economist for IHS Automotive told Automotive News. “It’s the fact that it’s coming effortlessly. We’re not dumping cars and trucks into the fleets. We’re not using humungous incentives to move them. It’s a reflection of people’s willingness to buy and the strength of the product out there.”
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The last five-year growth period was from 1996 to 2000, when automakers rode a bubble of SUV and truck sales. Aging products and a downtrodden economy both hampered the Detroit 3, deflating annual sales figures.
Analysts are looking at the market now and trying to predict how far new car deliveries will continue to climb before the back swing occurs. Morgan Stanley estimates that the market could climb to 18 million sales annually before the next downturn, though others are less optimistic.
Cheap car loans and cut prices are currently enticing new car buyers to lock into long-term financing deals, which may eventually be the cause of a downturn in sales.
[Source: Automotive News]