The Economy

Forecast: U.S. Auto Sales Won't Return to Pre-Recession Levels by 2016

June 3, 2011

Edmunds.com sees auto industry gaining momentum, but at a 'moderate pace.'

The auto industry will continue on a steady pace of recovery, but sales won't return to pre-recession levels before 2016, according to a new five-year forecast of U.S. automotive sales published by Edmunds.com.

Edmunds.com anticipates new-car sales will climb to 15.85 million units in 2015, falling short of the benchmark of 16.1 million in 2007, the last full year before the U.S. economy fell into a recession.

On average, 11.7 million cars have been sold in the United States in each of the last three years, and Edmunds predicts 2011 sales will reach 12.9 million units.

U.S. vehicle sales will reach 15.85 million units in 2015, according to Edmunds.com's latest forecast.
"In the past six to eight months, an increasing number of signs suggest that economic fundamentals are improving, and these factors are contributing to rising auto-sales momentum," said Lacey Plache, chief economist at Edmunds.com. "We expect this momentum to continue, but at a moderate pace, given the fundamental steps that are still needed for a full economic recovery. "For example, at the current rate of roughly 250,000 jobs added per month, it will take nearly two and a half years to recover the 7 million jobs needed to reach pre-recession employment levels, which do not include jobs needed to accommodate population growth." Housing Crisis, Credit Crunch Stunting Growth In addition to unemployment, Plache noted that other economic factors are keeping auto sales from recovering as fast as they fell. Those factors include the continuing housing crisis and tighter lending standards. As a result, consumers are holding on to vehicles longer and average vehicle age is increasing. Supply disruptions stemming from the March earthquakes in Japan led to a decline in May 2011 auto sales. But Japanese automakers are reporting accelerated improvements in production, and Edmunds.com predicts that the effect on U.S. auto sales likely will not linger much past the summer. Still, Edmunds.com CEO Jeremy Anwyl says that U.S. automakers have a once-in-a-generation opportunity to boost their reputations and cut into their Japanese competitors' market shares. Edmunds.com U.S. Auto Forecast, 2011 to 2015 Year Projected Sales 2011 12.9 million 2012 13.9 million 2013 14.65 million 2014 15.25 million 2015 15.85 million See Also:

"Toyota Tumbles to Fourth in U.S. Sales Amid Supply Crunch"

About the Author

Josh Cable | Former Senior Editor

Former Senior Editor Josh Cable covered innovation issues -- including trends and best practices in R&D, process improvement and product development. He also reported on the best practices of the most successful companies and executives in the world of transportation manufacturing, which encompasses the aerospace, automotive, rail and shipbuilding sectors.

Josh also led the IndustryWeek Manufacturing Hall of Fame, IW’s annual tribute to the most influential executives and thought leaders in U.S. manufacturing history.

Before joining IndustryWeek, Josh was the editor-in-chief of Penton Media’s Government Product News and Government Procurement. He also was an award-winning beat reporter for several small newspapers in Northeast Ohio.

Josh received his BFA in creative writing from Bowling Green University, and continued his professional development through course-work at Ohio University and Cuyahoga Community College.

A lifelong resident of the Buckeye State, Josh currently lives in the Tremont neighborhood of Cleveland. When the weather cooperates, you’ll find him riding his bike to work, exercising his green thumb in the backyard or playing ultimate Frisbee.