Transport News

Surge in Auto-Sales to Spur Demand for Freight In 2016

Posted Date : 2016-03-28

The US market is witnessing a continuous six-year surge in demand for automobiles as well as automotive freight.

A growth rate of 2.3% is expected in light truck and new car sales touching 17.7 million units in 2016. The surge is spurred by low –interest auto loans, low fuel prices, and moderate growth in wages.

This was noted by Steven Szakaly, the chief economist at the National Automobile Dealers Association (NADA) at the Los Angeles Auto Show.

He said that 2016 would be the seventh year straight in a row of rising sales of new vehicles. NADA raised its 2015 sales figures of light trucks and new cars to 17.3 million. The figure touches 17.8 million when heavy duty and medium trucks are included.

The impact of rising automotive demand will be on domestic manufacturing as well as rising imports of fuel. This would benefit logistics and transport services throughout the automotive supply chain.

In first half of 2015, US auto-imports touched a high of $171.5 billion as per as US Census Bureau data. Auto-imports in containerized form at US ports surged by 1.5% in the first half.

IHS Automotives predicts that global production of light trucks and cars will rise by 27% within next seven years. This also implies that demand for freight and transport would also experience a surge.

The leading source of US imports of automotives is Mexico. Major base of international auto exports to North America and Latin America is Mexico. In terms of dollar value, the leading source of US market imports is Mexico, which accounted for 33.8% of the market in first half of 2015, a surge from 31.5% in first half of 2014.

 The latest trend is that of China garnering a rising share in automotive component sales. It accounted for 15.4% of the US market in early half of 2015 in comparison to 14.3% in early half of 2014.
 
 According to Szakaly, at present, the auto industry remains healthy and tends to grow along with enhancement of improved conditions of households. The number of new households is surging which is causing rising auto-sales and ensuring strong economic recovery. He noted that nothing is better for the market for car sales than more people getting married and starting families.
 
He also said that 2016 would be the year in which sales would reach a peak, in this cycle of recovery. Though auto-sales will experience a slight downtrend in 2017, it would still be a high level of sales.


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