Sales and Loan Volume Are Likely to Pick Up in 2011
You're likely to see auto lending pick up in 2011. Many of those loans will be for practical rather than high-end vehicles. More young members may seek auto loans. Sales of domestic makes are likely to improve. That's the picture sketched by Jeff Schuster, executive director of automotive forecasting at J.D. Power and Associates.
"Sales have improved," Schuster noted. "The trough was in 2009 with 10.4 million units. In 2010, we're looking for 11.5 million. In 2011, we expect continued slow but steady improvement to 12.8 million.
"I think there is some regionalization to the recovery," Schuster responded. "Certainly Michigan, for example, was hit harder than many states, and I think will take a little bit longer to bounce back. There will be areas that will lead the auto recovery and others that will lag."
He also expects some demographic patterns to emerge. Younger buyers, he noted, exited the market first. They essentially stopped buying cars. They are now coming back into the market in larger numbers. It's partly a function of the availability of credit, which isn't back to prerecession levels but is improving.