“What’s especially encouraging is the current competitive strength among the automakers,” says Edmunds.com Chief Economist Dr. Lacey Plache in a preview of 2013 auto sales trends. “Consumers will continue to benefit from exciting new models and technologies—and potentially lower prices—as automakers continue to battle for market share.”
Other automotive trends that Dr. Plache expects to see in 2013 include:
- Lease terminations flood the market – Edmunds.com projects that there will be as many as 500,000 more car buyers coming off leases in 2013 than in 2012. That's 500,000 more potential new-car customers to buttress the remaining pent-up demand.
- Used-car prices softening – Those lease terminations should have a ripple effect on the auto industry—especially on used cars. Off-lease vehicles and more trade-ins will flood the used-car market and help to bring down prices. Edmunds.com expects the average used-car price to fall $200–$300 per vehicle in 2013, which will continue the price drop we saw this year after used-car prices peaked in 2011.
- Housing resurgence creates "wealth effect" – Housing prices are starting to rise, and this should continue in 2013. And while that's good news for the economy in general, it spells even more good news for the automotive market. Dr. Plache puts it best: "Rising home prices make consumers feel wealthier, which translates into greater consumer confidence to make large purchases, such as a new car."
- The year of the truck – When housing construction booms, so too does the market for pickup trucks, which are favored by builders and contractors. GM recently unveiled its upcoming line of ’14 Chevy and GMC pickups, which will only push the competitive juices of Ram and Ford. So, while 2012 saw a renaissance in small and midsize cars, there's every indication that, in 2013, trucks will regain some of their lost market share.
Dr. Plache and Edmunds.com Sr. Analyst Michelle Krebs offer a full preview of 2013 auto trends.