It’s time to look ahead at the automotive trends we’ll be seeing in 2013.
Industry analysts all predict continued growth in new car sales, which have shown three years of double-digit expansion: 11 percent (2010), 10 percent (2011), and 13 percent (2012). Sales hit 14.49 million units last year, the highest number since 2007.
Will it continue?
George Magliano, senior automotive economist for IHS, predicts sales of at least 15 million units this year. That optimism is reflected locally.“ I feel 2013 will be a growth year, barring any unforeseen calamities out there,” says Warren Waugh, co-founder of the Lyon- Waugh dealership group that includes Acura, BMW, Land-Rover, and Mini of Peabody plus Audi and Porsche of Nashua, N.H., and Mini of Bedford, N.H.
In the darkest days of the economic downturn in 2009, Ray Ciccolo, CEO of the Village Automotive Group, was steadfast in predicting the auto industry would lead the recovery.
“Ray was right,” says IHS’s Magliano. “We’ve been telling people that, too.Typically, autos and housing lead out a recovery, but this time housing is only starting to rebound.”
Magliano sees that housing rally as one of the factors that will contribute to a big year for pickup truck sales. “Housing and small business are both coming back,” he says. “Plus, we at IHS see the price of gas remaining stable.”
That’s good news for GM, which is about to launch its new Chevy Silverado and GMC Sierra as early 2014 models. It also bodes well for the 2013 Ram 1500, both the North American Truck of theYear and Motor Trend Truck of the Year, and for Ford’s perennially bestselling F-Series pickups.
“Those gas prices should mean we won’t be seeing any big shift to smaller cars. People still will be buying crossovers and mid-size vehicles,” says Magliano.
That’s not necessarily good news for the hybrid market. “Hybrids and electronic vehicles (EVs) are a fact of life in the industry,” Waugh explains, “but for some brands, growth is going to require subsidies. You have to enter that market carefully and be careful how they’re sold to the consumer. Some require home modifications for charging.
“The consumer wants a normal plug-in with good battery life and performance and quick-charging capability. The demand is there, but people want the convenience factor, too. People don’t want to pay a $10,000 premium to make a statement. When we can deliver convenience and price, you’ll see demand grow, but we’ve got to start somewhere. Remember how expensive calculators were in the ’70s? Now they’re simple, even giveaways.”
Hybrid sales also tend to go in proportion to gasoline prices.When gas is high, so is demand for hybrids.
So, if prices remain stable or lower in the coming year, savvy buyers may find some deals in the hybrid sector, knowing that the petrol pendulum will come back the other way.
Manufacturers also are introducing ever more efficient gas engines, models that don’t carry the price of a hybrid, EV, or diesel. “This is a trend we’ve seen over the past year or so,” says Magliano. “Combined with the stable gasoline prices, there are many choices with gas engines that give you good fuel economy without paying a (hybrid, diesel, or EV) premium or worrying about battery life.”
Magliano also points to the bankruptcy of Waltham-based battery-maker A123 as hurting the EV movement. “There hasn’t been the hoped-for technological breakthrough to lower the price or make batteries more efficient, two advances automakers have been awaiting,” he says.
As for diesels, Magliano says that “the buying public still considers them to be dirty, even though they’ve made great strides.”
Waugh sees that perception changing, noting solid sales among the German brands’ diesels. “I drive a diesel myself. The engineering is there. Audi and BMW [plus Mercedes-Benz and Volkswagen] have been building strongperforming, quiet diesel engines. While some customers still are wary of them, the reality is that you get 200 more miles on a tankful of gas, which more than offsets the higher price of diesel fuel.”
Other trends to watch in 2013:
• Used cars:“By some accounts, up to 500,000 vehicles will be coming off lease in 2013, which is going to help the new car market, obviously, but will have a huge effect on the certified pre-owned market.That’s also going to help soften pricing in that segment as buyers have more choice in vehicles that are less than four years old,”says Keith Griffin, the guide to used cars at About.com.
• Technology: “All the bells and whistles, technological features, and the OnStars and connectivity will be more widespread,”says Magliano.
• Sports cars: “A sign the economy is trending the right way is Porsche 911 sales. They’ve been good for two years now,” says Waugh.
• North American factories: “The production equation has shifted to North America,” says Magliano.“We’ve become an export hub, thanks to manufacturers’ global platforms. This century we’ve gone from zero exports to a million units and are headed to 2 million by 2020. That means more jobs. Everyone is moving production here—Kia, Hyundai, the Japanese, and Germans.” Of course, not everything is rosy. As Automotive News senior editor Jesse Snyder points out, there’s still the matter of higher payroll taxes, weak job growth, and continued economic uncertainty (budget cuts, debt ceiling) coming out of the political wrangling in Washington.