New York Auto Show: U.S. Carmakers Poised for Strong 2014
NEW YORK -- Pent-up demand, relaxing credit and pricing discipline by carmakers will drive the industry to strong profitability in 2014, John C. Humphrey, senior vp global automotive operations at J.D. Power, said Monday at the 2014 Automotive Forum.
Speaking before the opening of the New York International Auto Show later this week, Humphrey said that U.S. car dealers had the best March on record since 2006 and are on target to sell 16.1 units by the end of 2014. "The heath of the industry is far greater than it has ever been," Humphrey said, citing rising prices, less reliance on incentives and the loss of 3,000 dealers during the recession. The remaining dealers "are more profitable and can capitalize on opportunities," he said.
Humphrey also stressed the importance of marketing to millennials, who will represent 40 percent of car sales by 2020. "Understanding Gen Y is imperative," Humphrey said. Forty-nine percent of millennials use digital research to decide to buy a car and 31 percent rely on others' opinions in the shopping process. "They have a desire to communicate and interact with brands that is very different than their predecessors."
Addressing the increasing connectivity of cars and the issue of distracted driving, Humphrey predicted "there will be some pretty draconian legislation that will deal with distraction -- that will have to happen first."
Overall, Humphrey said J.D. Power is "bullish on the industry. There are 25 new models in the coming year, greater credit ability. At the same time, a lot of car companies are doing a very good job of creating more stylish vehicles. The industry is doing better."