It’s hard not to be impressed with the pace of light vehicle sales of late.
Indeed, just last month Jeff Schuster, senior VP of forecasting at global research firm LMC Automotive, noted that his company increased its total light-vehicle sales forecast for 2015 to 17.0 million units, up from 16.8 million previously, based on strong economic indicators.
“The prospects for auto sales to overachieve in 2015 are moving closer to reality as 2014 goes out on a high note,” he said at the time. “Economic bliss, driven by job creation, wage growth and low gas prices may drive consumers to showrooms at a faster pace, emphasizing the notion that this recovery may not be over quite yet.”
General Motors CEO Mary Barra recently noted that the last time light vehicle sales expectations for the U.S.as a whole were this high – between 16.5 million to 17.0 million units in 2015, according to GM’s forecast – was back in 2001; which seems like a lifetime ago and not just 13 years.
Thus Barra feels more than just pent-up demand is at work during this current boom period.
“The U.S. economy and vehicle sales have been rebounding since 2009, and we believe there is still plenty of room for the auto industry to grow,” she noted in a speech last week.
“The strength of the labor market, better job security and the recovery in home prices has consumers feeling pretty good about the future, so we expect people will continue to replace their older cars and trucks,” Barra (at right) pointed out. “The recent sharp drop in fuel prices and rising incomes should only add to their confidence.”
Strong real GDP [gross domestic product] growth is expected to create new job opportunities in 2015 – as many as 200,000 new jobs per month, according to GM’s economists – and that should drive higher labor force participation and better job prospects for recent college graduates, she said.
“The most important change that we see coming, though, is the return of younger and first-time buyers to the market,” Barra stressed.
Indeed, she noted that third party studies reinforce GM’s view, including the National Association of Colleges and Employers, which said in its Job Outlook 2015 report that employers plan to hire 8.3% more new college graduates from the Class of 2015 for their U.S. operations than they did from the Class of 2014.
“A growing jobs market and new vehicles that exceed expectations for fuel economy and high technology are the best ways to rekindle the love affair America’s youth have historically had with cars and trucks,” Barra added.
To that end, GM is focused on retooling its entire product lineup – not only bringing back entirely new versions of its formerly discontinued midsize pickups, the Chevrolet Colorado (at left) and GMC Canyon models, but adding in new “green” vehicle options as well.
That’s where offerings like the retooled 2016 Chevrolet Volt and prototype Chevrolet Bolt EV come into play [you can view more photos of those two vehicles by clicking here].
“The Bolt EV concept (seen at right below) is a game-changing electric vehicle designed for attainability, not exclusivity,” Barra noted this week at the North American International Auto Show in Detroit, MI.
“Chevrolet believes electrification is a pillar of future transportation and needs to be affordable for a wider segment of customers [and] we have made tremendous strides in technologies that make it easier and more affordable for customers to integrate an all-electric vehicle in their daily lives,” she added.
GM is also putting some serious money where its mouth is on this, investing $435 million in the production of three new vehicles, including the 2016 Volt, at its Detroit-Hamtramck Assembly Plant and at its Brownstown Battery Assembly Plant, in MI, where the Volt’s lithium-ion battery pack is produced.
The OEM is also building the 2016 Volt’s new electric drive unit at its Powertrain plant in Warren, MI, while the 1.5-liter “range extender” gasoline engine in the new Volt to be built at GM’s Toluca, Mexico, engine plant for the first year of production, before eventually shifting to the OEM’s Flint, MI, engine plant.
That’s quite a heady New Year plan, if you ask me, so let’s how it eventually unfolds as 2015 kicks into high gear.