Pub. 1 Issue 4

24 www.glancda.org Toyota, 19.0% Honda, 14.1% Nissan, 7.1% Mercedes, 6.8% Ford, 6.7% BMW, 5.5% Chevrolet, 4.9% Lexus, 4.4% Kia, 4.2% Volkswagen, 3.9% Others, 23.4% Covering Data thru December 2013 Los Angeles Auto Outlook Los Angeles Auto Outlook Comprehensive information on the LA County new vehicle market Market Summary Domestic brands consist of vehicles sold by GM, Ford, Chrysler, and Tesla. Data source: AutoCount data from Experian Automotive. % Chg. Mkt. Share 2012 2013 '12 to '13 2013 TOTAL 372,726 424,403 13.9% Car 250,367 285,164 13.9% 67.2% Light Truck 122,359 139,239 13.8% 32.8% Domestic 64,704 77,896 20.4% 18.4% European 88,257 97,150 10.1% 22.9% Japanese 188,363 215,515 14.4% 50.8% Korean 31,402 33,842 7.8% 8.0% Los Angeles County Brand Market Share - 2013 3 Key Market Trends 1. Los Angeles County new retail light vehicle registrations in- creased 13.9% from 2012 to 2013, higher than the 8.6% improvement in the Nation. 2. Light truck market share was unchanged in 2013. Light trucks accounted for 32.8% of the overall market. 3. Domestic brand county registrations were up 20.4% in ‘13, higher than the 13.9% increase for the industry. County Domestic brand market share still trailed U.S. (18.4% in county vs. 40.6% in Nation). The graph above shows market share leaders in 2013. FORECAST County New Vehicle Market Predicted to Move Higher in 2014 New retail registrations are expected to approach 450,000 units and increase for the fifth straight year Forecasting automotive sales is a delicate balancing act. There are frequently conflicting indicators that can provide mixed signals on future market conditions. The trick is identifying these trends, sepa- rating the meaningful from the meaningless, and forming a consensus on where the market is headed. Below, we identify the key positive and negative forces that are likely to impact the market in 2014. Forces leading the market higher • Low interest rates and strong affordability. Low interest rates and mild inflation, combined with decent personal income growth have kept new vehicle affordabilliy at historically strong levels. • Improving economic growth. Most economists expect GDP growth to accelerate in 2014, which should give a boost to the job market. • Pent up demand and benefits to “upgrade.” The average age of vehicles on the road exceeds 10 years. This will continue to prompt many consumers to purchase a new vehicle based on need (pres- ent vehicles are wearing out) and desire (new vehicles offer many advantages over the average 10 year old vehicle). Forces holding the market back • Consumer sentiment. Although consumer attitudes have improved somewhat, there is still a pervading sense of concern about the future, a lingering consequence of the 2008 financial crisis, and ensuing economic recession. • Household balance sheets. Consumers have made considerable headway in reducing debt, but are largely hesitant to fund increas- es in spending by adding on more debt. Wrap up: Positive factors will lead the market higher in 2014, but we believe that for at least the next two years, the negative factors will place a ceiling on how high new vehicle sales will go, and we could approach that ceiling by 2015.