Automotive dealers expect an increase in sales in 2013, according to a new survey from Chase Auto Finance. The Chase Auto Finance Dealer Survey, which reveals dealers’ 2013 expectations on hiring, financing, auto industry trends and the U.S. and local economy, also found that an overwhelming majority of dealers believe the auto industry and their own dealership businesses are improving and primed for growth. Green Lights Ahead for SalesNearly half (45 percent) of auto dealers surveyed expect sales growth between five to 10 percent this year, while 22 percent expect sales to increase 11 to 15 percent. Another ten percent anticipate sales to increase 16 to 20 percent and five percent of auto dealers are planning sales growth of 20 percent or more in 2013. Specifically, auto dealers expect new and pre-owned sales growth in 2013. Two-thirds (67 percent) anticipate new sales to increase, while 73 percent of dealers expect growth in pre-owned sales. Additionally, dealers expect healthy increases in service sales (49 percent), service contract/warranty sales (48 percent) and leases (42 percent). Sedans Are Top Choice for AmericansMore than half of dealers (57 percent) say the sedan will be the top selling type of automobile in 2013. Trucks (17 percent) are a distant second, followed by crossover vehicles (13 percent) and SUVs (9 percent). The trends look similar for fleet sales, which are an important indicator for economic growth. Dealers who also participate in fleet sales (44 percent) said the sedan is expected to fuel sales growth (53 percent), followed by trucks (47 percent), crossover vehicles (20 percent) and SUVs (20 percent). Dealers Optimistic About the EconomyMore than three in four (77 percent) auto dealers surveyed believe their dealership business is improving, and 68 percent believe the economy in their local community is strengthening. As for the national economy, nearly a third of dealers (32 percent) believe the national economy will start getting better later this year and more than half (52 percent) said not until after 2013. “Automobile purchases continue to be a leading indicator of economic activity, and our survey reveals solid optimism for growth in 2013,” said Marc Sheinbaum, CEO of Chase Auto Finance. “Buying or leasing a new car is an investment that individuals and companies make not only by necessity, but also when they feel good about the stability of their financial future. These results affirm what we saw in the second-half of 2012 and have already seen in 2013. Sales are improving and dealers are investing in their businesses and hiring more people as they prepare for growth.”
Steve Ricchiuto, MZUHO Securities chief economist, and Bob Michele asset management global CIO with JP Morgan (JPM), joined BloomberTV's 'Bloomberg GO' to discuss the economy and the Fed raising rates.