N. American Auto Recovery to Shift Into Higher Gear in 2014

SOUTHFIELD, MI – The coming year will mark a turning point in the North American auto industry’s continuing comeback from the Great Recession of 2009, analysts at IHS Automotive say.

“This will be a transition year,” IHS analyst Peter Nagle says of 2014 during a backgrounder by the forecaster here. “The market will be less driven by incentives and more by the economy.”

Colorado-based IHS predicts North American light-vehicle sales will rise to 16.03 million in 2014, in line with a WardsAuto projection of 16.2 million units. The figures mark a gain from an estimated 15.59 million in 2013.

New products will help fuel demand. WardsAuto data show more than 65 new or significantly refreshed vehicles on the docket for launch next year that are expected to bring buyers into showrooms. Next year’s product onslaught comes on the heels of more than 45 new models rolled out in 2013.

That heightened competitive environment, plus continued tight capacity and pricing pressure will challenge automakers in 2014.

“We’re going to see a shift,” says Mike Jackson, senior manager for IHS. “We’re going to go back to a dynamic of ‛How do I compete in this environment?’ It comes back to which manufacturer has a strong strategy.”

Competition will continue to ratchet up over the next couple of years as the market completes its recovery from 2009’s steep drop and begins expanding. That means new investment will be needed to get to projected production volumes of 17.4 million-17.5 million vehicles in 2015 and 18.0 million in 2018 both IHS and WardsAuto/Automotive Compass are forecasting, and automakers will be slugging it out to get their fair share.

Some competitive relief will be found in increased exports from the region, as IHS predicts annual overseas shipments will rise by more than 2 million units by 2020. That will come as automakers increase application of global platforms and European and Asian manufacturers in particular begin to source more vehicles in North America as part of a strategy to build where they sell and balance the exchange-rate scales.

“The region is far more competitive than it’s been (as a global production base),” Jackson notes.

Europe will be the primary destination for North American exports, accounting for 35%, IHS says, followed by the Middle East/Africa (22%), South America (20%), China (12%) and Japan/Korea (6%).

The North American gains will come as the eurozone begins to emerge from its recession next year and markets in the Asia-Pacific region continue to advance.

Global sales, which rose a projected 3% to 82 million light vehicles in 2013, will gain another 4% to 85 million in 2014, IHS says, rising to 100 million-plus by 2018.

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