Firm predicts slow but steady auto industry growth

ORLANDO, FLA. -- The double-digit sales increases notched by the U.S. auto industry since 2009 will give way to slower but steady growth through 2015, J.D. Power and Associates predicts.

Sales should grow percent this year, to 15.1 million, followed by 4 percent gains in each of the next two years, according to a forecast presented at the J.D. Power International Automotive Roundtable at the National Automobile Dealers Association meeting in Orlando.

A recovery in the U.S. housing market, a slew of new products, pent-up demand and ample credit availability will drive growth, said John Humphrey, senior vice president of J.D. Power's global automotive operations.

Most promising, Humphrey said, is that the growth is happening the right way, with auto makers building to demand and dealers' profitability improving.

"What makes me more excited are the fundamentals that make these volumes more healthy than they had been in the past," Humphrey said.

The fundamentals include:

•  Auto makers are using 84 percent of their production capacity, the highest level in recent memory;
•  Strong pricing: Average transaction prices hit $28,586 in 2012, a record high, J.D. Power said; and
•  The nation's 17,500 dealerships—down from more than 20,000 in 2009— generally are enjoying better profitability and throughput.

Stronger leasing and the continued return of buyers with weak credit will help, too, Humphrey said.