Are U.S. Sales poised for a slide to a 15 million year by decade's end?
Based on a trend analysis by Ward's beginning with 1960, annual U.S. sales should surpass the 18 million mark some time in the latter half of the decade. But the data also indicate a good-size drop possibly to around 15 million units is likely, as well. The first two years (2000-2001) of the new millennium averaged about 17.2 million, so anything above 18 million would mean close to another 1 million
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Based on a trend analysis by Ward's beginning with 1960, annual U.S. sales should surpass the 18 million mark some time in the latter half of the decade. But the data also indicate a good-size drop — possibly to around 15 million units — is likely, as well.
The first two years (2000-2001) of the new millennium averaged about 17.2 million, so anything above 18 million would mean close to another 1 million vehicles up for grabs.
The prospect of 18 million annual sales also is an indication the North American market may not be as overburdened by excess production capacity nor as flooded with competition as some believe.
The question is whether the industry can handle the inevitable market plunge to 15 million units after its present run of four (or more) 16 million-plus sales years.
On the plus side, the analysis indicates the gap between the high and low years has continued to narrow with each successive decade. That means the industry can expect more stability — and annual sales should become easier to predict.
But even taking into account the flattening of the economic cycles, the trend suggests that some time during 2002-2009, light-vehicle sales should drop to around 15 million units.
The analysis also points to the decade of 2000-2009 averaging 16.7 million new car and truck sales per year, a big leap over 1990-1999's 14.5 million.
After the two 17 million-plus years of 2000-2001, sales will have to average below 16.6 million for the next eight years for the decade to hit the projected 16.7 million trend line.
Historically, in each decade — including back to the 1950s — the low year has come in the first half. This could be the decade that breaks tradition because of the huge incentives of late that effectively lowered new vehicle prices and possibly pulled ahead sales.
If that's been enough to upset the pattern, then the decade's worst years may come later. More likely, though, is that it has narrowed the high year/low year gap even more than the trend outlook projects.
But if the incentive wars of the past few years haven't changed that 5-decade pattern, then 2003 or 2004 could be ripe for a significant downturn.
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