US auto sales continue to disappoint

US autos Sept11.pngOne characteristic of recessions is that recovery is always ‘just around the corner’. We can see this pattern in today’s US auto market. Since 2009, forecasters have been convinced that sales will quickly return to Supercycle levels of 15-17 million/year. But sadly, by around this time of year, it has become clear that nothing has really changed.

Thus the blog’s own forecast in January, that sales will be in the 11 – 13 million range, looks likely to be achieved, with the annualised sales figures now down to 12.12m. As the chart above shows, August sales (red square) were once again below the 1.1m level, which represented a minimum in the Supercycle days..

The problem is that manufacturers and analysts remain in denial about the impact of the ageing BabyBoomers (those born between 1946-70). Their argument seems to be that ‘demographics has nothing to do with demand’. Until we move beyond this phase, it seems unlikely that we can make much progress.

The pity is that the need to reduce carbon footprint, and improve fuel efficiency, could provide a major new growth paradigm. But it is unlikely to be realised, as long as the ‘experts’ convince themselves that a return to the Supercycle is just around the corner.

About Paul Hodges

Paul Hodges is Chairman of International eChem, trusted commercial advisers to the global chemical industry. He also serves as a Global Expert for the World Economic Forum. The aim of this blog is to share ideas about the influences that may shape the chemical industry and the global economy over the next 12 – 18 months. It looks behind today’s headlines, to understand what may happen next in critical areas such as oil prices, China and Emerging Markets, currencies, autos, housing, economic growth and the environment. Please do join me and share your thoughts. Between us, we will hopefully develop useful insights into the key factors that will drive the industry's future performance.

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