--Sees US Auto Sales Hitting 15.6 Million In 2013
--Forecasts China Auto Sales To Exceed 20 Million In 2014
WASHINGTON (MNI) - U.S. automobile sales should continue to recover in 2013, reaching their highest level since before the financial crisis, Standard & Poor's said Wednesday.
S&P expects growth of 8% in U.S. auto sales for the year, which alongside stronger sales in emerging markets should buoy world auto sales for the year, even as Europe and Japan are forecast to see declines in the industry, according to the rating agency's Industry Report Card.
"We expect sales to keep recovering in the U.S. - which remains a bright spot for the industry," said S&P, who are forecasting sales of 15.6 million units in 2013, the highest level since 2007, and "the first return to 16 million units" sold in 2014.
S&P sees "healthy demand fundamentals" for the U.S. light vehicle industry, with the market remaining "favorable" in 2013.
"Rising light vehicle sales and a still favorable mix of cars and trucks underpin good fundamentals for most automakers in the region," said S&P, and sales should hold "comfortably above our estimated replacement level, although we also believe that pent-up demand from the recession could start abating this year."
Chinese light vehicle sales meanwhile, are expected to jump 9.9% in 2013, reaching the 20 million sales threshold, with a further 15.8% jump in 2014 for the world's largest automobile market, according to S&P.
While U.S. sales growth and a "reacceleration of sales growth" in China should allow for overall auto sales growth of 2.8% worldwide, S%P expects sales in both Europe and Japan to decline for the year.
"In the European Union, our base-case outlook assumes that 2013 sales of light vehicles ... will continue to decline modestly to some 13 million units," it said, dropping 4% for the sixth straight annual decline.
"With the European economy worsening, we expect demand for light vehicles to decline by between 4% and 5% in 2013 in Western Europe. Manufacturers that rely most on Southern Europe will be more affected," S&P said.
For 2014, Western Europe is expected to see 1.4% growth in sales, though this estimate is "based on a recovery in the European economy."
Japan should see a similar drop in 2013, and S&P "anticipates that new vehicle sales will decline by at least 5%, to less than 5 million units" for the year, largely reversing last year's growth, caused in part by the government's eco-car subsidy program.
--MNI Washington Bureau; tel: +1 202-371-2121; email: jnewell@mni-news.com
Auto Lending Bubble Inflates, And The Federal Reserve May Be Responsible