OUTLOOK '10: US auto industry will begin long recovery in 2010

30 December 2009 21:30  [Source: ICIS news]

Auto sales should increase in 2010HOUSTON (ICIS news)--US automobile sales will likely increase in 2010 after plummeting to abysmal levels during the nation's recession.

US automobile sales are a large end market for chemicals, creating much of the demand for styrene-butadiene rubber (SBR) and acrylonitrile-butadiene-styrene (ABS). It is also a major end market for synthetic fibres and paints and coatings.

After reaching roughly 17m units in 2005, US automobile sales began falling, according to IHS Global Insight.

Sales dived in 2008 before General Motors (GM) and Chrysler filed for bankruptcy protection in 2009.

US light vehicle sales will end the year at 10.3m units, said George Magliano, director of automotive industry research for North America at IHS Global Insight.

It will be the sector's worst performance since 1982, he said.

Next year, sales should rise to 11.2m, still a lacklustre figure when compared with the earlier part of the decade, he said.

"It's going to be a struggle for another 12 to 18 months," Magliano said.

Automobile sales will likely improve with the overall US economy, he said. However, the industry still has several obstacles.

Credit remains tight for consumers and businesses, he said. US jobs are still few, and unemployment will continue rising in 2010.

Magliano also expects the US consumer will become more conservative regarding personal finance, saving more and spending less.

In all, it will take several years before the auto demand recovers to previous levels, said Mike Jackson, director of North American vehicle forecasts for CSM Worldwide.

Indeed, Jackson estimates that demand will not reach 2007 levels until 2013.

CSM expects sales will remain flat during the first half of the year before rising in the third quarter, Jackson said.

For more on ABS or SBR visit ICIS chemical intelligence
Paul Hodges studies key influencers shaping the chemical industry in Chemicals and the Economy
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By: Al Greenwood
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