Bloomberg News

NADA’s Taylor Forecasts U.S. Auto Sales to Rise 10% This Year

February 04, 2012

Feb. 4 (Bloomberg) -- U.S. sales of cars and light trucks are expected to rise by about 10 percent this year to 13.9 million, reflecting improved consumer demand and more stable credit availability, a dealer group said.

Paul Taylor, chief economist of the National Automobile Dealers Association, said better credit, improved incentives and low interest rates are spurring vehicle sales, according to a statement. He spoke at a press briefing during the NADA Convention and Expo in Las Vegas, reiterating a forecast the group gave last month.

Automakers sold new cars and trucks in January at the fastest pace since the 2009 “cash for clunkers” program without resorting to profit-sapping discounts, signaling demand returned to pre-recession levels.

“Recent sales are what we would expect from a normal growing economy coming back from recession,” Taylor said in the statement.

Taylor said one- to five-year-old used vehicles are in short supply and selling at higher-than-usual prices. He said 5 million vehicles weren’t traded in during the recession, which has bumped up the average age of cars and light trucks.

A rise in gasoline prices could be a factor that may affect sales this year, the group also said. Analysts forecast the prices may rise to $4.13 per gallon, up from an average of $3.51 last year.

NADA also said it expects used vehicle prices to gain 1.8 percent on a seasonally adjusted basis this year, peaking in April and May. Used vehicle prices gained 3 percent in 2011, NADA said.

--With assistance from Craig Trudell and Keith Naughton in Southfield, Michigan. Editors: Sylvia Wier, Mike Millard

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