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Can U.S. automakers’ recent success last? Yes. Despite the soft economy, the U.S. auto industry -- domestic and foreign brands -- is doing well, with U.S. sales headed to 15 million this year and more growth likely in 2013.
All signs continue to point up!
The Automotive News latest Business Outlook Survey indicated that regional manufacturing activity expanded modestly this month. The survey’s broad indicators for general activity, new orders, and shipments all remained positive but fell slightly from their readings last month.
The indicator for current employment, however, showed a notable improvement. Price pressures were only slightly more widespread this month. The survey’s broad indicators of future activity remained at relatively high readings, and firms were more optimistic about their plans for hiring over the next six months.
That means May should show the kinds of gains seen in April.
One reason: Years of pent-up demand from purchases deferred in 2009 through 2011, as the recession put millions of folks out of jobs. With cars on the road now averaging 10 years old -- up from 8.5 years in 2009 -- plenty of consumers will shell out for a new ride in the next year.
Over the next few years, look for a slow, steady recovery: Total sales of just 10.6 million vehicles in 2011, with about 5 million made outside the U.S. The market share of U.S. brands will keep inching up.
Longer term, new fuel efficiency rules spell bigger challenges for the industry. Much tougher miles-per-gallon standards for automakers’ fleets start in 2017 and reach a rigorous fleet average of 54.5 miles per gallon in 2025. That will force big investments in new technologies and bring about a significant shift in the vehicle mixes produced.
For electric vehicles and hybrid trucks, expect a big boost. Producing them will yield manufacturers extra credit toward the ratcheted-up mileage standards, but only if skeptical buyers can be convinced that they are worth the extra cost -- And only if energy efficiency won’t sacrifice pickup trucks’ power and towing capacity. A recently announced Toyota-Ford partnership suggests the two companies think the task is doable.
A push for weight savings will fuel demand for higher-cost materials -- high-strength steel and aluminum, plastics, carbon fiber, etc. For manufacturers, that means finding the right balance of weight vs. durability, cost vs. energy savings. There’ll also be more reliance on computers and advanced software to run increasingly complex systems in vehicles and to design and manufacture tomorrow’s cars
With global vehicle sales continuing to improve, with gains accelerating to a double-digit year-over-year increase last month. We will see the strongest growth since the spring of 2010. prior to the flaring up of sovereign debt problems in the southern euro zone economies. The rebound continues to be driven by the desire for incremental fuel efficiency, as well as the strongest pace of year-over-year job creation since late 2007. Noteworthy, the improving sales performance continues to be accompanied by declining incentives. We estimate that incentives on new cars in the United States are currently at the lowest level in a decade, though consumers have given notion that as credit ratings and lenders outlook goes higher, so will their desires to purchase a brand new vehicle.
What does this mean for the M2M telecommunications business? Accelerated business for dealers means accelerated growth in our products. As the largest provider of GPS vehicle tracking we feel it is our responsibility to continue to provide these auto dealers with the most reliable asset protection on the market. With our corporate identity shift and the sponsorship in place with Joe Gibbs, we are taking every necessary step to provide the highest form of business intelligence for those in the BHPH and Franchise market.
To learn more about our Automotive solutions please visit www.spireon.co