Fiscal cliffs, sequesters, Cyprus bailout? U.S. consumers are ignoring the headlines, feeling good about their personal finances, spending more and buying more new vehicles this year, say industry executives and analysts.
“Every one of these crises is like the boy who cries wolf,” said IHS chief economist Nariman Behravesh on Tuesday at the J.D. Power & Associates automotive conference days before the opening of the New York International Auto Show. “Despite the sequester, despite the increase in payroll tax in January and despite rising gasoline prices, the fundamental of consumer spending has continued to strengthen and will continue to strengthen especially during the second half of the year.”
The comments underscore a steady shopping pace U.S automotive dealers are seeing during the first few months of the year, increasing the likelihood the industry will meet its target of selling between 15.3 million and 15.5 million new vehicles this year. Sales reached 14.5 million last year.
March vehicles sales results, due out Monday, will show more than 1.45 million car and trucks were purchased during the month, estimates auto researcher Kelly Blue Book. That would be the highest monthly sales total since August 2007.
“We are very optimistic about 2013,” said Toyota Motor Corp. U.S. sales chief Bob Carter. “More people have more jobs, there is easier access to credit and we are seeing younger car buyers returning.”
Mr. Carter said he expects Toyota to sell 2.2 million vehicles in the U.S. this year between the Toyota, Lexus and Scion brands. One stat Mr. Carter dropped–the auto maker expects to sell 200,000 Rav4 sport-utility vehicles in the U.S. this year alone. He also said consumers should hear details later this year on a new Toyota Corolla.
“How many people say they buy a Corolla because they look good in it?” Mr. Carter said. “Styling and interior refinement is an area we are working really hard on for the new Corolla. That is what the younger customer is expecting.”
But strong sales are only part of the story.
An increasing amount of data show the world’s auto makers are also selling their vehicles at higher price points in the U.S. The average transaction price is expected to hit $28,977 in 2013, said J.D. Power President Finbarr O’Neill. That is an approximate $3,000 increase over 2008.
Meanwhile, incentives continue to remain relatively flat with the average discount price average about $2,790.