KBB sees 2015 as slowest growth in US auto industry in six years

Article by Andrew Christian, on January 14, 2015

Analysts at Kelley Blue Book expect a sixth consecutive year of recovery in the United States auto industry this 2015, although the growth would be the lowest since 2010. They said at the eve of the Detroit auto show that for this year, US light-vehicle sales will surge 2 percent to 16.9 million units, up from 16.5 million in 2014.

So far since 2009, US light vehicle sales jumped 6.1 million units. Cars.com and Toyota Motor Sales U.S.A. have similar forecasts at 17.0 million and 16.7 million (conservative), respectively. KBB analyst Alec Gutierrez remarked that retail sales will surge from 13.5 million in 2014 to 13.9 million this year, which means that 2015 fleet sales would remain more or less at 3 million units.

But KBB expects carmakers to play tough this year to get those sales – higher incentives and net prices, and more leasing. KBB projects the number of new vehicles leased to hike to 3.51 million this year from 3.36 million in 2014.

On the other hand, Gutierrez expects average incentives to jump $159 to $2,950 per vehicle -- the highest dollar amount on record. However, customers may not feel the effect since prices of vehicles are also on the rise.

He remarked that such incentives are still not at a level that could be considered risky since the average transaction price is also rising. KBB expects 2015 incentives to be 8.8 percent of average transaction prices, which should be at $33,500.

Topics: united states, sales

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