Sales of new light vehicles in the United States are expected to top 16 million units in 2014, the first time since 2007. While US light vehicle sales may reach the 2007 level in 2014, carmakers are behaving unlike the last time the figure topped 16 million units. Back in 2007, carmakers overproduced and artificially increased demand by throwing blowout sales to eliminate of the excess inventories.
"Back in 2006 and 2007 the industry was on illegal drugs, doing steroids," Jesse Toprak, president of Toprak Consulting told Automotive News. He noted that this time, the auto industry is reaching its sales goal all naturally, on the merit of the product. He added that now, sales are not being fueled by “irresponsible lending or outrageous incentive spending."
The Automotive News Data Center expects the US auto industry to log light-vehicle sales of 15.6 million units in 2013, for an 8-percent gain over 2012. This means that US light vehicle sales need to grow at least 3 percent to hit 16 million units in 2014. The artificial sales growth points to more profit not only for carmakers but also for dealers.
Since 2007, almost 4,000 dealerships have gone under, which means that those who survived the recession are now selling more light vehicles than ever. If the auto industry sells at least 16 billion in 2014, this means that the average sales per US dealership will be more than 900 vehicles, up from about 521 vehicles in 2009 and a peak of 785 in 2005. "The guys that survived are going to do well," Steven Szakaly, chief economist for the National Automobile Dealers Association, told Automotive News.