Pub. 2 Issue 2

26 www.glancda.org 455,571 421,742 339,240 240,746 267,382 298,458 372,726 424,403 456,000 0 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 450,000 500,000 2006 2007 2008 2009 2010 2011 2012 2013 2014 Forecast New light vehicle registrations Market is predicted to improve 7.4% in 2014. Covering Data thru June 2014 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. YTD '13 YTD '14 % Chg. Mkt. Share thru June thru June '13 to '14 YTD '14 TOTAL 209,204 230,737 10.3% Car 140,350 153,435 9.3% 66.5% Light Truck 68,854 77,302 12.3% 33.5% Domestic 38,725 42,247 9.1% 18.3% European 48,034 50,338 4.8% 21.8% Japanese 105,047 120,158 14.4% 52.1% Korean 17,398 17,994 3.4% 7.8% Annual Trend in LA County New Vehicle Market The graph above shows annual new retail light vehicle registrations in the county from 2006 thru 2013 and Auto Outlook’s projection for 2014. 6 Key Market Trends 1. County new retail registrations increased 10.3% for the first six months of this year versus a year earlier (June figures were estimated), well above the 4.3% improvement in the U.S. 2. The market is predicted to increase 5% in the second half of 2014 versus 2013. 3. County light truck market share has increased from 32.9% during the first half of 2013 to 33.5% this year. 4. Japanese brand registrations were up 14.4%, higher than the 10.3% improvement in the overall market 5. Hybrid and electric vehicle market share was 9.5% thru June of this year, up from 8.9% in 2013. 6. Toyota, Mercedes, Honda, Lexus, and BMW are strong per- forming brands in the county market (see page 3). Flash back to 2009 - the devastating impact that the financial crisis would have on the economy was becoming plainly evident. Banks weren’t lending, the stock market crashed, and unemployment was rising. The writing was on the wall for a sharp decline in new vehicle sales, and that’s exactly what transpired. New retail light vehicle reg- istrations in Los Angeles County fell from 421,742 in 2007, to just 240,746 in 2009, a 43% drop in two years. At the time, the prevailing view was that it could take a decade or more for the market to return to sales level reached during the early and mid-2000’s. We disagreed. At the time, we pointed out that the combination of significant pent up demand, extremely low interest rates, higher used vehicle prices, and greatly improving new vehicle offerings would more than offset the negative impact of a slowing economy and household de-leveraging. We predicted that within about five years, the market could easily approach, or exceed, sales levels attained in 2007. And that is exactly what has transpired. This year’s total is predicted to reach 456,000, well above the 2007 total. So where is the market likely to head in 2015 and beyond? As men- tioned in the past few issues of Auto Outlook, there are reasons to believe that the pace of the sales recovery will ease during the next 18 months. At this point, we are predicting a 4% increase next year, with registrations exceeding 470,000. FORECAST County Market Stays Strong in 2nd Quarter of 2014 7.4% improvement predicted for entire year