A study performed by Itay Michaeli, a Citi Investment Research auto analyst, used methods that included polling in five-month intervals since March 2010 with an outcome that suggests the market may continue a trend of scrapping old cars faster than it replaces them. According to Michaeli, for the first time ever, Americans are actually scrapping old vehicles faster than they are replacing them.
The conclusion of Michaeli's study is that Americans will actually reach 14.6 million new vehicle sales by 2013, a full 1.5 million short of other projections that would put the U.S. industry at pre-2009 recession levels. "This severity of this flush was caused both by the deep economic downturn and the 'over-buy' that occurred since the 1990s, unquestionably aided by incentives and credit," said Michaeli.
to help illustrate his point, Michaeli demonstrated that Americans owned 1.18 vehicles per driver in 2006, which was considered the peak of the housing bubble, where as they are currently at 1.14 - a number he says is still high. The analyst believes that the number could fall as low as 1.04 to 1.08, which would yield his predicted sub-14.5 million vehicle number for 2013.
The survey used by Michaeli asked consumers a few questions, including how many vehicles their household held, how many they expect to own in two years and whether or not they will add or subtract from their current count. The result? Only 10 percent expected to add a vehicle, while 14 percent of the 2,700 respondents expected to move to fewer vehicles.
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