2009 will be a memorable year for the automotive industry — unfortunately for all the wrong reasons. The U.S. light-vehicle market is expected to close out 2009, at a disastrous 10.3 million sales, down from 16.1 million sales just two years ago and the lowest industry volume since AutoPacific began forecasting automotive sales in 1988. The national economic collapse had a profound impact on retail sales of light vehicles.
The industry can look forward to a gradual year-on-year recovery, according to research firm AutoPacific’s five-year forecast period. AutoPacific forecasts industry volume of 11.4 million units in 2010 as the economy improves. However, unemployment will hinder the industry’s quick sales recovery. 2015 will see industry sales of 15.4 million, a significant improvement from 2009 volume but still a far cry from the near-17 million unit years seen through much of the past decade.
“Even with the gradual recovery of the economy, many Americans will need to address serious near-term issues such as loss of personal savings and wealth as well as focusing resources on projects, such as home repairs, that had to be deferred due to the recession,” said Ed Kim, director of industry analysis at AutoPacific. “Because today’s vehicles are more durable and long lasting than ever, consumers are able to put off new vehicle purchases for much longer than they have been able to in the past. This dynamic will hamper industry recovery in the near term.”
This relatively slow recovery means big challenges for the automakers. Despite the loss of several brands over the past year, AutoPacific still expects nearly 300 individual vehicle nameplates in the marketplace in 2015. By comparison, there were only 198 nameplates in 1998, which was the last time industry volumes were at around 2015’s expected level (15.4 million units). Thus, automakers will be fighting for a piece of a much smaller pie. Profitability at these lower volumes will represent a challenge, especially when the drive towards greater fuel efficiency will add significant cost to upcoming new vehicles.