I recently updated and expanded my outlook for the United States auto industry, and I am happy to report that the news is all good.
My latest forecast calls for an increase of 5 percent in the total number of motor vehicles assembled in the U.S. in 2015. This follows an expected gain of well above 6 percent in 2014. In 2013, the total number of motor vehicles assembled expanded by 6.7 percent.
As the chart illustrates, this data hit a record-low total of 5.7 million assemblies for the year in 2009, but it has climbed rapidly ever since. Careful inspection of the graph will reveal that the slope of the forecast part of the line is a bit less steep than it has been since 2006, indicating that the recovery is maturing. In terms of the actual number of units assembled, the increase in 2015 will be a bit lower than the gains in 2013 and 2014.
But what is most exciting to me is the fact that the industry will finally get back to its pre-recession levels next year. Even with the recession in 2001 included in the figures, the number of motor vehicles assembled in the U.S. averaged right at 12 million units per year from 2000 through 2006. If my latest forecast is accurate, then the U.S. auto industry will get back to the level of 12 million units in 2015. So after nine long years, the industry that once defined U.S. manufacturing will at last be fully recovered from a statistical perspective.
This forecast is based on a continuation of a number of trends that drive demand for motor vehicles.
The best indicator of market demand for automobiles in this country is the widely-reported monthly data on U.S. auto sales. Because I think of the auto industry as a major end-market for plastics processors, I focus mostly on the assemblies data because it represents the best indicator of the North American auto industry's demand for domestically produced plastics parts.
But the forecast of the future trend in the assemblies data is driven by trend in total market demand for autos. The monthly data on auto sales combines the sales of domestically produced autos with imported vehicles, so it is the best overall indicator of total market demand for cars and trucks in the U.S.
In recent months, U.S. vehicle sales have registered their best sales figures since 2006. For the year to date, the number of passenger cars and light trucks sold in the U.S. is up 5 percent when compared with 2013. In terms of units, the average so far this year is 16.4 million units (seasonally adjusted annualized rate). In 2006, total sales of just under 16.6 million units were recorded.