According to a recent study conducted by Edmunds.com, in 2014 automobile sales could reach as high as 16.4 million vehicles sold. This would be very close to the pre recession levels of 16.5 million vehicles sold in 2006. In 2013, industry experts expect sales figures to reach 15.5 million vehicles so the study suggests a 6 percent increase year over year. The study says that one reason for the increase will be that 300,000 more leases will expire in 2014 than in 2013.
Another reason for the expected increase is pent-up demand; every month so far in 2013 the average age of trade-ins has increased. Historically, this has been a sign that demand is about to increase since the average vehicle on the road is getting older, cost of repairs is getting higher and a new vehicle is becoming more appealing. “The average age of all light vehicles on the road climbed to 11.4 years in 2013, and an aging fleet will continue to force buyers back to the market next year,” says Edmunds.com’s chief economist in the study, Lacey Plache. “With used car prices still elevated over past norms and used car supply still tight, the new car market will remain attractive to many of these buyers.”
This does not mean that the economy has fully recovered and the automobile industry still faces several headwinds. Small businesses, younger people and lower income households are still feeling the effects of the recession. “Even though auto sales from these groups have improved from recession lows, their participation in the recovery still lags the rest of the market,” the study says.
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