NADA Sees 12 million+ Sales in 2010

NADA Sees 12 million+ Sales in 2010

NADA Chief Economist Paul Taylor sees a brighter picture on the employment front, rising GDP and an end to the freefall in home prices, all of which he believes bodes well for a very positive 2010 where new vehicle sales will likely surpass 12 million units.

Writing in his latest Economic Update, he says a significant shortage of quality used vehicles will also play a critical role in bumping new vehicle sales. Taylor notes that the normal supply of used vehicles is down by nearly 5 million units and that, as a result, used vehicle prices have been rising dramatically, which in turn makes a new vehicle more attractive.

Taylor says he expects new vehicle sales in the remaining months of 2009 to follow the pattern established in October, with month-over-month increases, limited discounting and easier access to credit. For the year, he expects sales to total 10.3 million units.

Along with rising sales, Taylor also expects that the dealership count will stabilize in 2010 at around 18,000 rooftops. Correspondingly, he notes that there will likely be about 20,000 dealerships at the end of 2009 (a net loss of 760 from the previous year) and that there will be another 200 net drop in 2010. After that, however, he expects the dealer count to rise as the industry recovers further and Chinese and Indian manufacturers get a foothold here.