We retain our outlook that, despite a slow start in Q114, macroeconomic conditions are largely favourable, and we expect further growth in light vehicle sales, albeit slightly slower at 3.6%, to be achievable in 2014, taking the market back to 16mn units for the first time since 2007. We expect light trucks to continue to outperform the car segment, led by a slew of new product launches.
Data for the year so far bears this out. In 5M14, total light vehicle sales were up 5.0% year-on-year (y-o-y), but the balance was heavily weighted towards light trucks, with growth of 9.4% y-o-y, compared with 0.7% growth for passenger cars. Since the harsh winter conditions that kept consumers away from dealerships in Q114 abated, sales have returned to their growth trajectory, aided by low interest rates and favourable credit conditions.
Despite a 5.0% contraction in investment into residential housing in Q114, we expect the tightening labour market to support housing demand and we expect to see a recovery in the coming quarters. This is positive for our bullish view on light trucks, as the housing market is traditionally a bellwether for truck sales. We forecast 5.3% growth in light truck sales in 2014, which is still robust by historical standards, despite representing a slowdown from previous years.
At the heavier end of the spectrum, we forecast total medium and heavy truck sales to grow 5.3% to 370,379 units in 2014, pushing the market closer to the 400,000 unit mark last seen in 2005. In line with our view that strength in the freight transport sector will drive growth in demand for medium and heavy trucks in 2014, truck sales posted their best results for May since 2006 as freight levels also achieved new highs. The growth in US manufacturing, which is generating demand for road haulage of goods between factories and end users or ports and railways for export, will see this growth story continue for the remainder of the year and indeed our forecast period to 2018.
The United States Autos Report features the latest data and forecasts covering production, sales, imports and exports.
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BMI Industry View
Summary of BMI's key industry forecasts and views, covering production, sales and the introduction of new technology or products.
Global, Regional and Country Industry Overviews
In-depth analysis of the major global and regional developments in the market, which can be linked with the country industry overview, providing cross-country investment, product and financing trends that will affect each market, supported by BMI’s global and regional industry forecasts.
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BMI's proprietary Autos Business Environment Rankings are a unique country-comparative Risk-Reward Rankings index that separately analyses the risks and rewards of operating in each market. It is aimed at investors (including manufacturers, suppliers and dealers) who seek to either identify and compare market opportunities, or evaluate country-specific operational challenges.
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BMI Industry Forecasts
Historic data series and forecasts to end-2018 for all key industry indicators (see list below), supported by explicit assumptions, plus analysis of key downside risks to the main forecast, including:
Total production value (US$bn); total production of units; production by vehicle-type (including cars, commercial vehicles, trucks and buses); total sales value (US$bn); sales by vehicle-type, including passenger cars and commercial vehicles (vans and microbuses, pickups, trucks and buses, 4 wheel drive); total exports by value (US$bn) and by units; total imports by value (US$bn) and by units; contribution to GDP; employment in industry.
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BMI forecasts to end-2018 for all headline macroeconomic indicators, including real GDP growth, inflation, fiscal balance, trade balance, current account and external debt.
Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI's industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.