Auto industry analysts predict sales of new cars will rise in 2012

Posted on January 9, 2012

Industry experts offered 2012 new-car sales forecasts for the U.S. ranging from 13.3 million to 13.9 million, fueled by more available credit and slow-but-steady growth in employment, during Sunday’s Society of Automotive Analysts conference at the Detroit auto show.

Colin Langan, an auto analyst with investment bank UBS, came in at the low end of the range. He said one encouraging sign is that Americans still aren’t buying one new car for every old one that reaches the end of its useful life. That is a sign that there is still pent-up demand.

The recent decline in the nation’s unemployment rate, while modest, also could help.

“The consumer is numb. They’ve seen so much bad news that they are starting to ignore it,” Langan said.

Brandon Mason, an analyst with PwC Autofacts, predicted that Americans will buy 13.6 million new vehicles this year. Automakers will make 14 million vehicles in the U.S. this year, according to Autofacts’ data; that would be an increase from 13.1 million last year.

General Motors’ chief economist Mustafa Mohatarem did not offer a specific sales forecast, but he did offer that the U.S. economy will be the world’s bright spot in 2012 as Europe grapples with its debt crisis and that the torrid growth of auto sales in markets such as China, India and Brazil will slow this year.

Finally, Paul Taylor, an economist with the National Automobile Dealers Association, said he expects new-vehicle sales to hit 13.9 million, which would be up from 12.8 million in 2011.

“I also expect that pickup trucks, minivans and luxury cars will sell much better than they did last year,” Taylor said.

David Strickland, administrator of the National Highway Traffic Safety Administration, told the conference that U.S. traffic deaths in 2010 — 2011 data will be released this spring — fell to 32,788, the lowest total since 1949. But he went on to say that is still too high.

NHTSA is working with most major automakers to speed up the installation of electronic stability control and crash avoidance technology in more models. He also warned that the industry has not yet resolved the risks of introducing smartphone, entertainment and voice-activated features.

“Being connected is core” to how young people live, Strickland said, then referred to his set of triplet godchildren. “I have seen them text from one room to another, and even when they are sitting across the table from each other.”

NHTSA’s sister agency, the National Transportation Safety Board, recommended last month that all 50 states ban texting and cell phone use while driving.

Strickland was more conciliatory in discussing driver distraction, choosing to emphasize cooperative efforts between NHTSA and communications providers.

By Greg Gardner, Detroit Free Press