Fueled by compelling product redesigns and introductions, replacement demand and potentially low prices as automakers continue to battle for market share, new-car sales are expected to surpass 15 million units, for the first time in five years, in 2013.
As automakers worked to finish 2012 on a strong note, analysts expect December sales to increase 14% from a year ago, according to a report released by J.D. Power and LMC Automotive.
“What’s especially encouraging is the current competitive strength among the automakers,” said Dr. Lacey Plache, Edmunds.com chief economist in a preview of 2013 auto sales trends. “Consumers will continue to benefit from exciting new models and technologies – and potentially lower prices – as automakers continue to battle for market share.”
Edmunds.com predicts that there will be as many as 500,000 more car buyers coming off leases in 2013 than in 2012. In addition to creating more potential new-car customers to support remaining pent-up demand, off-lease vehicles and more trade-ins will flood the used-car market and help bring down prices.
Funds saved from vehicle purchases could mean extra cash for consumers to spend on aftermarket upgrades.
Furthermore, the rise of housing prices in 2013 will benefit the economy and the automotive market as a whole.
“Rising home prices make consumers feel wealthier, which translates into greater consumer confidence to make large purchases such as a new car,” Dr. Plache said.
Edmunds.com forecasts that a demand for housing will stimulate the construction industry, which will fuel the market for pickup trucks. While 2012 saw a renaissance in small and mid-size cars, 2013 trucks will regain some of their lost market share, partially due to the release of new-generation pickups from General Motors, Ram and Ford.
Jeff Schuster, senior vice president of forecasting at LMC Automotive, said although the 2013 forecasts seems favorable for the U.S. light-vehicle market, the fiscal cliff could be a major road block. A tax increase for middle-income households could slow sales growth through next year and beyond.