A continued release of pent-up demand will lead the way to 16.4 million new car sales in 2014, forecasts Edmunds.com, which predicts that the auto industry is on pace to reach its highest annual sales performance in 2014 since shoppers bought 16.5 million new cars in 2006.
"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 Chief Economist Dr. 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."
Dr. Plache says that the auto sales environment in 2014 will closely resemble the environment in 2013, for which Edmunds.com projects that new car sales will come in at around 15.5 million. That automotive environment includes a continued flood of lease returns to the market: Edmunds.com estimates that 500,000 more leases will expire in 2013 than in 2012. And Edmunds.com estimates that this number will grow by an additional 300,000 in 2014, accounting for about a third of all expected sales growth in 2014.
But the 2014 sales picture isn't entirely rosy for the auto industry. Even if new car sales grow at the 6 percent rate that Edmunds.com projects, it will be the slowest year-to-year growth since auto sales bottomed out in 2009.
"The economy has not yet improved enough for recovery to widely reach the groups hardest hit by the recession, including young people, lower income households and small businesses," says Dr. Plache. "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 full 2014 sales forecast is available here.
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