Warren Buffett's Berkshire Hathaway To Purchase Auto Dealership Firm Van Tuyl Group


Fueled by the strongest job growth in the U.S. since 1999, the auto industry is wrapping up its best sales year in nearly a decade, and optimism for 2015 is brimming like a foamy cup of eggnog.

To challenge our own fortune-telling skills, the Free Press offers five safe and five bold predictions for 2015. For example, predicting this year's surge in auto and light truck sales didn't require much analytical magic.

But foreseeing that gas prices would fall below $2 a gallon was a much more difficult prediction.

And a year ago, General Motors was riding a wave of new pickups and critical acclaim for the Chevrolet Impala. The government had just sold its last shares. The skies were clear. But in mid-February, the first recall was tied to the defective ignition switches, which put the company in crisis mode for the next six months.

So every year brings surprises that not even the claivoyant can see. In that spirit, we also offer some out-of-the-box scenarios that aren't all that outlandish.

Safe predictions

■ Sales stay strong:We're not at the peak of this strong auto sales cycle yet.

TrueCar, the car-buying and selling platform, forecasts Americans will buy 17 million new cars and trucks next year, the highest level since 2005, and not too far below the industry's best-ever annual mark of 17.4 million in 2000.

"We see a convergence of favorable economic circumstances pushing auto demand up to prerecession levels, the best consumer sentiment in eight years and low fuel prices," said John Krafcik, TrueCar president.

■ Upscale still sells: People who can afford to spend a lot on their next vehicle will. Luxury cars, crossover and increasingly upscale pickups will sell at record prices because affluent buyers' appetite for the latest bells and whistles is not sated.

This is a reflection of easy credit, continued low interest rates and stronger income growth among wealthy consumers.

■ Gas prices volatile: Prices at the pump will be more volatile as lower prices force higher-cost refiners, including some relying on Canadian tar sand crude, to cut back on production or to exit the market. Look for a moderate increase in prices beginning in late March or April as refiners switch to summer blends, but prices will settle in the $2.50 to $2.75 range by late summer and early fall.

■ Sales of hybrids and plug-in electric vehicles will struggle: Except on the West Coast where climate change concerns, tax incentives and Silicon Valley's loyalty to Tesla will keep EVs off the endangered species list.

■ Recalls continue: Expect the recall surge to continue, both from the National Highway Traffic Safety Administration and the industry acting pre-emptively. New NHTSA chief Mark Rosekind must prove his regulator credibility both with his own understaffed agency and the politicians that accused his predecessors of being insufficiently vigilant.

Bold predictions

■ Truck price war: A price war will break out among the major pickup manufacturers, partially in retaliation against Ford's aluminum F-150, which will sell well, but not at the lofty profit margins Ford envisioned. Aluminum prices will rise as steel prices fall.

■ CAFE standards rollback: Someone from the Detroit 3 will suggest that the Obama administration's 54.5 miles-per-gallon by 2025 standard should be revised or repealed.

■ Free bicycle: Some automaker, in an effort to reach millennials, at least in selected urban markets, will offer a free bicycle and carrier, with the purchase of certain models.

■ Major merger: When the industry is this hot, investment bankers come knocking on the door with all kinds of merger and acquisition deals. Expect a major bid involving two — probably European-based automakers. Don't rule out Volkswagen making a run at Fiat. Sergio Marchionne will fight it to the bitter end.

■ UAW strikes: After a short strike against General Motors, the UAW and all three Detroit automakers will agree to a contract that grants a very small base wage increase to workers hired before 2007 and narrows the gap between them and the more recent hires. The contract also will have incentives for workers with more than 25 years of service to retire.

Contact Greg Gardner: 313-222-8762 or ggardner@freepress.com. Follow him on Twitter @GregGardner12

 Original Article

Views: 77

Reply to This

Replies to This Discussion

I also see an ongoing and growing interest in online vehicle valuations and online sales, as well as a continuing decrease in consumer response from the online contact form, so a need to increase usage of tools such as live chat. 


Latest Activity

Walter McNulty posted videos
3 hours ago
Walter McNulty posted a status
"The EL Patronn show airs live tomorrow at 11am on Facebook. Tune in for some great insights."
3 hours ago
Damian Boudreaux posted blog posts
4 hours ago
Scot Eisenfelder posted a blog post

Affinitiv and AutoLoop Sign Definitive Agreement to Merge

Combination creates a leading provider of marketing technology and software solutions exclusively…See More
6 hours ago
Michia Rohrssen posted a blog post
10 hours ago
John Sternal posted a blog post

Lease Credit Approval Rates Dip To 65% In June

More Demand From Consumers Seeking Existing Lease Contracts at Price Points Negotiated When Dealer…See More
10 hours ago
Doug Van Sach posted a blog post
10 hours ago
Asad Shoaib posted a blog post

Australia’s Equivalent of Truecar.com

The process of buying and selling a new car is never going to be all easy and smooth. However, if…See More
15 hours ago
Veronica Dunford posted a blog post
Dan Beres posted a blog post
Ryan Holman posted a blog post

Why Hire Professional Window Tinting Service Providers?

It might be tempting to tint your car windows by using a DIY kit, but the benefits of hiring an…See More
Bill Wittenmyer posted a blog post

The Best Leads are in Your CRM

New leads are important, and you always want to keep the pipeline full. Yet, it can cost as much as…See More
John Sternal posted a blog post

Inovatec Systems Corp. Partners with ZestFinance to Enhance Lending Procedures

Inovatec Systems Corp., a provider of industry-leading, cloud-based software solutions for all…See More
Paul Moran posted a blog post
Steven Laureys posted a blog post
Jim Flint posted a blog post
Tyler Newport posted blog posts
Crystal Hartwell posted a blog post

SureSale Certified, the Gold Standard for Quality Used Vehicles and Purchase Protection, Expands to Louisville

SureSale enters the Louisville market with certified used vehicle program that offers consumers…See More
Michael Trasatti posted a blog post
Michia Rohrssen posted a blog post

Get Newsletter

© 2019   Created by DealerELITE.   Powered by

Badges  |  Report an Issue  |  Terms of Service