LMC Automotive, formerly J.D. Power Automotive Forecasting, has revised its June prediction of 2012 U.S. light vehicle sales prediction downward. However, it is still predicting a record year for global auto sales, in spite of grim economic forecasters domestically and abroad.
Auto sales strong,despite slowdown
The forecasting firm original predicted that the U.S. auto rate of sales would reach 14.5 million. Now, however, faced with a mid-year slow down, it is revising that figure down to 14.3 percent. At the same time, is says global vehicle sales will record a record of nearly 80 million transactions. That beats the record set last year at 75.5 million units.
LMC’s chief forecaster, Jeff Schuster, revealed his predictions at a Center for Automotive Research conference in Traverse City, Michigan:
“The global sales level, even here in 2012 with all the risks we’re seeing here in Europe, we’re still in positive territory. We’re looking at 2012 to be up about five percent from where it was in 2011.”
LMC has also downgraded its initial prediction of 2013 sales. It said in June that U.S. auto sales would reach the 15.2 million mark. Now it says 15 million is more likely.
Emerging markets growing
The global numbers are being driven up partly by Chinese imports flooding emerging markets around the world. Schuster said of Chinese auotmakers:
“They are starting to have a stronger presence in South America, in Eastern Europe.”
Troubles in Eurozone
However, mid-year slow downs are, at least partially, a reaction to diminished sales in economically-troubled Europe. Sales in western Europe went down by 8 percent this year. Jonathon Poskitt, LMC’s head of European sales forecasting, said:
“The pressure in the European market is immense at the moment as the auto industry struggles with falling sales volumes, increased discounting and idle plant capacity. The risk of the Eurozone crisis worsening threatens any meaningful recovery in the near-term, and even the German market is showing clear signs of a slowdown.”
While the domestic numbers are expected to dip a bit due to concerns about Europe, Schuster says the market is strong enough to weather the storm. He said:
“The United States and Canada posted stable selling rates in July, but the growth rate for the remainder of the year is no longer expected to be as strong, as the economy cools and concerns with Europe rise. However, we do expect the North American market to be able to ride out the potential storm, albeit at a lower level.”
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Asia is also showing a healthy, growing market. At the end of the second quarter of 2012, Japan posted improved sales of 53 percent from a year before. India’s light vehicle sales were up by 14 percent year-over-year, and China saw six percent sales growth.