It’s official: the American car market is back, and delivering the sort of sales figures that manufacturers with a keen presence in the US can start getting excited about again.
In the opening keynote speech to the Los Angeles motor show this morning, Jim Lentz, president of sales for Toyota America, revealed that the US market is likely to be worth 14.3 million sales this year, up 1.5 million on last year. That acceleration is likely to continue, too, with sales back to their best of 16 million within three years.
This confidence stands in stark contrast to the continuing and deepening concerns regarding the European market, and worries prompted by the Chinese slowdown, albeit to a ‘mere’ predicted growth rate of eight per cent a year.
The US case is driven by three factors, according to Lentz. One, there's pent-up demand for new cars, with the average age of cars on America’s roads hitting an all-time high of 11 years. Two, car loans are now available at record low rates. And three, survey data suggests that a whole generation once saddled by student loans and high unemployment is now emerging, financially stronger and eager for personal transport.
For car makers with a strong presence in the US, all this is great news, just as the growth in China has been for makers performing well there. But there should also be a note of caution, because for the manufacturers still rooted in Europe only, the situation is only going to look bleaker.
Having footholds in as many diverse economies has never been more important than now. Ask Ford, which is leaning on its US and Asian success, or Fiat, which is ever more thankful for its Chrysler share.
Diversity is key – and the makers without it, or too heavily invested in Europe, are on ever more shaky ground as booming markets elsewhere allow their competitors to reinvest faster and harder, and push the gap between the haves and the have nots ever wider.