By on November 19, 2011

The pent-up demand has been chased-after more than Richard Kimble. And like the good doctor, the pent-up demand has so far eluded its pursuers. Now, Joe Pent-Up appears to be surrounded, further resistance is futile. Reuters has it from J.D. Power that:

“U.S. auto sales may have their strongest month of 2011 in November, spurred by consumers’ growing need to replace aging cars and trucks and a wider selection on dealer lots.”

LMC Automotive agrees to the forecast. However, LMC just bought J.D. Power’s forecasting business along with Jeffrey Schuster, so they ca hardly act as a corroborating witness.

Total light vehicle sales are forecasted to rise 8 percent in November compared with the same month in 2010, and the  SAAR is supposed to climb to 13.4 million, up a tad from the 13.2 million in October. For the year, the amalgamated J.D. Power and LMC forecasters predict sales of around 12.7 million vehicles. The really good part (unless you are a treehugger) will follow next year – unless the crystal ball has developed cataracts during the handover. Jeffrey Schuster, now LMC senior vice president of forecasting, predicts:

“As long as there is not an external shock or economic setback, the selling rate could be stable above the 14-million-unit level during the second half of 2012.”

Let’s see what the carmakers  have to say to this forecast of a rosy 2012.

Toyota’s Jim Lentz told Reuters’ Bernie Woodall that Toyota expects the U.S. auto market to rise to around 13.6 million in 2012, which would be in the ballpark of the new Power/LMC forecasts. By the middle of the decade Lentz sees sales of 15 million to 16 million, which would be close to the pre-carmageddon levels of 17 million.

General Motors has a more subdued outlook. At a Barclays conference in New York, GM’s U.S. sales chief Don Johnson said:

“We continue to believe that the industry will grow; it will grow slowly, along with the economy and it will be flat to slightly up in 2012. We actually like this slow growth. For us, it is a better environment within which to plan and we prefer to have less uncertainty, less volatility.”

So who will be right? Bullish Schuster & Lentz? Or cautious Don Johnson? What is your crystal ball saying? Most of all: Are you feeling the irresistible urge to inhale that new car smell again?

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12 Comments on “The Return Of The Pent-Up Demand: 14 Million New Cars Next Year?...”


  • avatar
    lilpoindexter

    I really don’t see it happening. There’s still too much uncertainty about whether you will have a job or not. 2012 is an election year, so I think people will wait to buy until after the election, as well. But i can definitely see things getting better after the election.

    • 0 avatar

      You really think people will hold off a purchase based on an election result? I don’t know how many people think about such macro things when making consumer purchases.

    • 0 avatar
      Volt 230

      yeah I see the sales increase in the luxo brands as the rich get richer, but a downturn in the every man’s class as the middle class descends into near poverty levels.

      • 0 avatar
        highdesertcat

        There’s a lot more to it than the “haves versus have-nots” argument. I am one of the “have-nots” but I do not condemn the people who have money, no matter how they got it. I say “Good for them!”

        I wish I had lots of money but the reality is that I don’t. That doesn’t stop me from buying a new car when I finally do have the money saved up.

        Pent-up demand exists because all things wear out eventually and must be replaced or repaired if we are to keep on with our daily lives. Not everyone has access to public transportation.

        The key issue as I see it is the US economy and the lack of jobs. Sure, there are a lot of people bailing OUT of the job market everyday to get on with their lives on the social security and medicare dole, like I do.

        But that is because I paid into it all my life and now it is time to start taking out my investment in this benefits program before it is permanently altered or reduced.

        But for those who haven’t yet reached their nirvana and still need to work for a living, the current job market is the pits.

        Once more people find permanent employment and can plan their lives accordingly, we’ll see a major uptick in new-car sales precisely because of pent-up demand. But not before 2014/2015, IMO.

  • avatar
    SilverHawk

    In a previous post, I predicted 12.9 million for this year. Realistically, we will come very close. Probably 12.8+. I see a continuation of the current trend for 2012. Improved inventories for Japanese auto makers, plus the arrival of many new models during the calendar year, should bring us to about 13.8 million.
    My main vehicle is an 09, and I don’t feel the need to go new just yet, but if I don’t start a new classic project, I could be tempted.

  • avatar

    We might see 15 million by mid decade, but cars last very long these days so I don’t 16 million unless there’s some kind of economic boom.

  • avatar
    porschespeed

    Typical DET think (and why we no longer run the world).

    If the industry is lucky it’ll see 12MM mid decade. In reality it’ll see somewhere in the 10-11MM range.

  • avatar
    highdesertcat

    In view of the current economic conditions 14 million is optimistic. But right now is the right time to buy a NEW car or truck. Selection is super and prices are good. Many dealers are willing to make deals to move inventory. They cannot survive without sales.

    What motivates people to actually lay down real money differs from person to person, but those who can, still do. And dealers know, instinctively KNOW, when a buyer has the means to buy and the dealers will provide them an opportunity to accommodate that motivation.

    Last Tuesday I laid down real money on a new 2012 SUV. We didn’t need one but my wife saw it, liked it, and we bought it.

    What motivated her to retire her 2008 Highlander Limited AWD for a 2012 Jeep Grand Cherokee Overland Summit V6 4X4 is a mystery to me. But I wasn’t ready to trade off the Highlander yet and we kept it for me to drive when I need something smaller than my Tundra to get around in. So now we have three vehicles!

    There was no pent-up demand for us, but we bought a new SUV anyway. There probably is a lot of pent-up demand for many people out there today but financial constraints keep them from taking on another expenditure.

    That’s why I think the 14 Million number is optimistic. Unless the economy turns around and the unemployed find work, there can be all the pent-up demand in the world but people will be held back for lack of money.

    I say we’re lucky for 2011 to be anywhere over 12 Million and for 2012 I believe we’re going to be around the same figure UNLESS the economy suddenly gets much better and the unemployed find real jobs.

  • avatar
    nrd515

    I had a couple of friends who were actually planning to buy when everything went to hell in 2008, and put it off, but 3 years later, it’s going to happen pretty soon now. One has a 2012 Challenger on order. One couple are shopping for two, his wife is going to be buying an Explorer right after Thanksgiving (His wife had a rental and loved it), and he is getting an F150 4×4 with the Ecoboost V6 at the end of the year (must be nice to be able to spend $80k and not worry about it). Another friend is trying to decide between a Tahoe, a Grand Cherokee, or a Durango. So far, the Tahoe is winning, barely, over the GC, but it seems to change daily. The SRT GC might be what finally makes him choose the Jeep.

    • 0 avatar
      highdesertcat

      The prices on new vehicles are never going to be any better than they are right now, no matter which brand or model a buyer chooses.

      Dealers are really interested in moving stock. The new owners of the dealerships formerly owned by my brothers are having truly remarkable sales events on much of their current inventory, i.e. 1% over total cost.

      New 2012 Fusion S cars for $17K! Hell of a deal! It has actually come to pass that the offerings from Hyundai and Toyota actually cost more than similar offerings from the domestic car makers.

      The remaining 2011 models can be had for 20%-30% off MSRP because of factory incentives in many cases. If you need wheels it is often cheaper to buy a new ‘year-old’ than it is to buy used. Either way, it satisfies pent-up demand.

      Anyone ABLE to buy now would be well-advised to do so.

  • avatar
    redav

    I suppose I’m one of these “pent-up” buyers. I have money set aside for a new car, but I’m sitting on it because my current car still has plenty of life left in it and I’m not completely thrilled by what’s on the market. There are a couple models I really like, but I’m going to wait a couple years to see if their quirks get tweaked away.

  • avatar
    Zackman

    I don’t plan on buying anything in the near future, as long as my ’04 Impala holds up. So far, so good, as this car has been every bit as reliable as our 2002 CR-V. Truth be told, the Honda has seen pretty light duty and since September I have been putting 500 miles a week on the Chevy, when I drive it all five days. Occasionally I’ll take her car, but I drive our ’07 MX5 every so often, but it’s a weekend car, for the most part and the Impala sits from Friday at 5 PM when I get home until I leave for work on Monday, 6:30 AM.

    So we’ll see…


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