Alysha Webb, Editor and Publisher
Press day at the Los Angeles Auto Show was very crowded this year, a good sign for the industry. There was a palatable feeling of optimism in the air. Auto industry executives and others generally expect 2015 to be a good year.
J.D. Power sees retail pricing remaining strong, with the average new vehicle price in 2015 rising to $30,026, helped by a low-interest environment and better inventory control. John Humphrey, head of global automotive for J.D. Power, speaking at the 2014 NADA/J.D. Power Western Automotive Conference, forecasts $407 billion in total vehicle expenditure in 2015. Auto makers can make money on lower volumes than in the past, he said, and “the industry is in a very strong state.”
Still, there are a few clouds in that generally sunny sky. Interest rates are expected to rise slightly in the second half of 2015. A rise of a mere 100 basis points would result in 300,000 lost unit sales, or $8 billion in overall revenue, according to J.D. Power.
That may be offset by continued low gas prices, however. As vehicles become more fuel efficient and oil remains cheap, who will succeed in that scenario, asked Humphrey? “We don’t know,” he said.
You can mull over the answer to that question as you recover from Thanksgiving Dinner. We are taking the week off, but will continue to post any Transaction News that comes our way.
Happy Thanksgiving!