The nation's franchised new car and truck dealers recorded their fifth strongest year on record in 2003, selling 16.6 million vehicles at a total sales volume of nearly $700 billion, according to NADA DATA, a comprehensive annual analysis compiled by the National Automobile Dealers Association (NADA).
Major incentive programs, enhanced dealership services, increased product quality and a recovering economy contributed to the industry's relatively strong performance. Sales were highest during the third quarter, when the nation's GDP grew a healthy 8 percent.
According to the NADA DATA report, the light truck category continues to grow, accounting for a record 54 percent (9 million) of total light vehicle sales in 2003 -- up from 52 percent in 2002. Sales of Crossover Utility Vehicles, based on car platforms, soared 35 percent in 2003, earning the lion's share of growth in the light truck segment. Rising van and pickup sales also helped to boost light-truck sales for the 11th consecutive year, as business spending returned to the market.
NADA Chief Economist Paul Taylor projects that 2004 light vehicle sales will climb to 16.8 million units.
"With the economy gaining momentum and incentives continuing, conditions are favorable for modest growth over last year's sales total," said Taylor. "Interest rates and gas prices are variables to watch. Indications are that interest rates will edge up through the course of the year, though not spike dramatically. Gas prices are in the consciousness of many Americans, but unlikely to reach levels nationally that will significantly impact buying decisions on a broad scale. However, subtle changes could occur if consumers start to believe that the high prices at the pump are a permanent reality, rather than just a short-term spike." NADA believes that gas prices will recede in the late fall.
The complete report appears in the May issue of NADA's AutoExec magazine. It can also be accessed or downloaded online at www.nada.org.