Analysts Predict Big Growth for U.S. Car Sales in 2012

Several factors, including wider credit availability, rising employment numbers and automakers' need to move aging products are leading analysts to predict a booming year for the U.S. automotive industry, with some predicting sales as high as 14 million vehicles.

According to Automotive News, the predictions of 11 independent analysts from agencies such as Morgan Stanley and Wells Fargo Securities yielded an average outlook of 13.6 million units. That would mark a 6 to 7 percent increase from the projected 2011 numbers, which are figured to top 12.7 million units.

One stated reason for the projected boost is an American car-buying public that now remains steadier during times of troubling financial news, unlike the plummet seen when the financial crisis hit in 2008. One analyst cited the summertime congressional standoff over the debt ceiling, noting that "the Dow fell 1,500 points -- and car sales stayed smooth and consistent." Analysts also downplay the idea that the European debt crisis will significantly alter American buying habits.

Another factor is an expected buyers market next year, with Asian and European manufacturers looking to unload excess product in the U.S. -- likely along with healthy incentives. Other indicators are a projected bump in North American auto production, higher leasing rates and better credit availability. The aging American vehicle fleet -- the average age of vehicles on the road is 10.7 years, as opposed to 8 or 9 years seen for much of the past decade -- is also major factor. One analyst quoted by Automotive News summed it up like this: "Americans have gone without for a very long time. 'I need a car' is the biggest reason for optimism."

Source: Exaust Notes