You might say that reports of the automobile industry’s demise are greatly exaggerated. Despite sales falling to as low as 10.4 million vehicles in 2009 (due to the recession and Americans postponing new-car purchases), light vehicle sales reached their highest level ever (17.5 million) in 2015. And this year may be even bigger.
In my cover story (“Auto Lending: Credit Unions Rev Up for Growth”) in the most recent issue of The Federal Credit Union magazine, I explore what it means to the nation’s credit unions, which are seeing remarkable growth in auto lending.
The CliffsNotes version is that credit unions are gaining market share, and credit union auto loan growth has been in the double digits for the last three years.
Here are some trends worth watching in 2016 from Stacey Doyle, senior auto industry analyst for TrueCar (who I interviewed for the article):
- Light trucks (pickups and SUVs) are expected to outsell cars.
- Millennials’ share of the auto market will increase to about 21 percent.
- Baby boomers will buy the most cars (the average age of a car buyer is 54).
- Loan terms will continue to get longer (72 months or more).
- Leasing will remain popular (40 percent of luxury vehicles are leased).
According to Automotive News, the boom in U.S. auto sales is driven by low gasoline prices, pent-up demand, widespread credit availability, an increase in leasing and employment gains.
Trucks, SUVs and crossovers have set the pace, jumping 13 percent in 2015. Car demand, on the other hand, fell 2.3 percent in 2015.
As always, kudos to my friends at NAFCU for producing a solid magazine. And special thanks to Curt Long, NAFCU’s chief economist and director of research, for his help with industry trends and data.