Is 17 Million Annual Car Sales Possible?

During the lowest point of the recession, some automotive industry analysts were declaring that the era of robust auto sales for the United States was over. After peaking at 17.4 million annual units sold in 2000, sales gradually slid over the decade until plunging in 2008 and finally bottoming out at 10.4 million units for 2009.

Annual Sales

In the course of the recession, the US lost its long held position as the top car consuming country in the world, as China saw its sales surge in the face of an American retreat. Few are predicting that sales will return to previous levels at least in the next few years with some saying that 12-13 million annual sales is the most likely scenario, effectively becoming the “new normal” for the country.

Fortunately, that position is not universally held.

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According to The Wall Street Journal, the management consultant firm A.T. Kearney, Inc. has issued a much more positive projection from 2012 and beyond even as sales are likely to climb to just 11.7 million units for 2010.

Optimistic Predictions

For 2012, Kearney is predicting US sales to reach 16.8 million units, 17.8 million in 2013 and 18.6 million in 2014. These sales numbers are the company’s “optimistic” predictions with their “pessimistic” numbers reflecting 12.9 million sales in 2012 followed by consecutive 14.6 million units sold in 2013 and 2014.

Even with baseline sales of 16.1, 16.5 and 17.5 million units in 2012, 2013 and 2014 respectively, few analysts are predicting that the 16 million unit threshold will be reached before 2013. Still, mostly everyone, including Kearney believes that pent up demand will bring customers back in to dealer showrooms. And, though cars tend to last much longer these days, the number of people with cars ten years or older is skyrocketing. Those people are seen as contributing to stronger sales in years ahead.

Outside Forces

Auto Trends doesn’t make predictions based on anticipated sales data, given the vagaries of the economy and other market conditions that may weigh in. The national debt is at an all time high level and taxes are bound to increase as national health care is introduced and other funding mandates arrive.

Finally, as A.T. Kearney partner Daniel Cheng noted, economic problems in Europe and elsewhere or terror threats could diminish the auto industry’s hope for a strong recovery, perhaps making everything I’ve written here moot!