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Polk forecasts 7% rise in U.S. new vehicle deliveries in 2012

06 January 2012 Tom Libby

The U.S. new vehicle industry continued to gain momentum as 2011 came to a close, with December deliveries up almost 9% from December 2010. For the entire year, dealers delivered 12,777,939 new cars and light trucks, up about 10% from 2011. The Polk Forecasting Practice expects the industry recovery to continue in 2012, with U.S. new vehicle deliveries climbing another 7% to 13.7 million units. Further growth in the industry will unfortunately be inhibited by the continued weakness in the U.S. economy, in particular the stubbornly high unemployment levels. The Polk U.S. Light Vehicle Forecast also states that pre-recession new vehicle sales levels in the 16 million range will not reappear until 2015.

In the U.S. new vehicle market in 2012, leasing will, at a minimum, continue to play a considerable role, and its influence may even grow because of the increased availability of money and improved residuals for many makes and models. This trend will drive the luxury market to an increased share of the total market as leasing traditionally accounts for more than 40% of all luxury deliveries (41.5% October 2011 CYTD). The premium market will also benefit from several major new product launches (BMW 3-Series, Cadillac ATS, Infiniti JX, among others) as well as intense volume competition among the luxury leaders.

Globally, China is expected to make the largest contribution to global new vehicle sales growth in 2012, with an anticipated 16 percent increase over 2011. Much of this growth will occur outside of the large metropolitan cities of Shanghai and Beijing. European sales are expected to be flat or down slightly to just over 19 million units, as austerity plans prevent governments in Europe from boosting 2012 sales through scrappage programs or other incentives offered in previous years.

Growth in the BRIC countries other than China will outpace many mature markets over the next few years. Polk expects Brazil to have surpassed Germany when 2011 sales results are finalized, and new vehicle sales in India are expected to surpass those in Germany in 2014.

Looking at the make level in the U.S., Toyota and Honda should realize the greatest amount of market share growth in 2012 as they win back some share lost in 2011 due to inventory shortages from the natural disasters in Japan and Thailand. Volkswagen will continue to gain market share in the U.S. as its more aggressive pricing strategy, successful with the re-designed Jetta and Passat, is applied to the new Beetle. Hyundai and Kia will both gain sales volume, but these brands may find it difficult to continue to gain share as the competition offers compelling new products in many segments. Lastly, the traditional Big Three will be competitive as they unveil several attractive new products such as the re-designed Chevrolet Malibu, re-designed Ford Fusion, and all-new Dodge Dart, among others.

Posted by Tom Libby, Lead Analyst - North American Forecasting, Polk (01.06.2012)

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