Encouraged by a recovering economy and the need to replace aging vehicles, consumers will accelerate their car and truck buying in 1994, ’95 and ’96, the Commerce Department says.
Car and truck sales, which heated up in the last six months, should total 15 million in 1994, an increase of 1 million, or 6 percent, from 1993 sales.
Commerce Department analyst Randall Miller said the department believes new car and truck purchases will rise to 15.7 million in 1995 and 16.6 million in 1996.
The dramatic increase in new car and truck sales is the highlight of the department’s annual forecast of nationwide industrial production for the coming year. The analysis predicts overall production will rise 2.8 percent next year and inflation will be a relatively low 3.5 percent.
The biggest reason for the auto buying splurge is the average age of U.S. vehicles-8.2 years-Miller said. That’s the oldest car and truck fleet the U.S. has had since the end of World War II. In the last 50 years, the country’s motor vehicles have averaged about six years, Miller added.
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“We’re seeing a pentup demand for new vehicles,” Miller said. “Americans are feeling better about the economy, low interest rates and their jobs.”
An increasing number of Americans will buy vans, pickup trucks and sport-utility vehicles in the next three years, Miller said. Car sales will make only modest gains.
The predicted car and truck buying surge is good news for General Motors Corp., Ford Motor Co. and Chrysler Corp., Commerce Department Under Secretary Jeffrey Garten said. “Detroit will take back market share from Japan,” he predicted.
The Big Three’s share of the American car and truck market will climb 0.75 percent in 1994, Garten said, mostly at the expense of Toyota, Honda, Mazda, Suburu and other Japanese makers.
Miller predicted GM, Ford and Chrysler’s share of the 1994 U.S. car market will rise to 74.7 percent, and the Japanese share will drop to 22.7 percent. The other 2.6 percent will go to the Europeans.
The biggest reason for the Japanese slump is the price difference favoring American carmakers, Miller said. U.S.-made cars and trucks cost $2,000 less than comparable Japanese models. And the quality of many U.S. vehicles now equals the Japanese, he added.
Miller said Americans who hadn’t been considering buying American-made cars now are.