NADA Says Auto Sales Outlook Favorable for Second Half of 2004
Despite mixed results in June, sales of new cars and light trucks are likely to gain strength during the second half of 2004, according to NADA Chief Economist Paul Taylor. He projects that year-end sales will reach 16.8 million vehicles, which is consistent with NADA projections throughout the year. It would make 2004 the fourth-best annual new vehicle sales total in automotive retailing history.
Taylor credits a series of factors for the positive outlook, including a growing economy, restrained action on interest rates by the Federal Reserve, expected escalation of customer incentives during the remainder of the year (already underway in early July), quality new-product introductions, and enhanced customer service at franchised new-car dealers. “All signs point toward healthy summer and fall selling seasons in the second half of the year,” said Taylor. “Consumer confidence is growing as the economy strengthens, and interest rate hikes are moderate, considering the multi-decade low in rates currently enjoyed. While inflation is expected to stay in check, any persistent signs of accelerating price pressure would be met with a faster pace of interest rate increases by the Fed, which could moderate the sales pace in 2005.” In addition to favorable economic conditions and incentives, significant investments by dealers in remodeling and customer improvements in their dealerships enhance the experience for customers. More than one-third of dealerships have invested in customer area improvements over the past five years that are taking shape now, which often include such amenities as Internet stations, children’s play areas and coffee bars.
“Dealers have taken great strides to make the dealership visit more enjoyable, convenient and productive to serve their customers better,” he added.
Download Bulletin PDF