While there are some positive signs for the economy that might help 2010 turn out to be a better year than this, Dr. Sean McAlinden, of the Center for Automotive Research, says next year is only good if you compare it to a disastrous 2009.
While the chief economist of the respected non-profit think tank says that production for the year could rise to 12.4 million units at best, the industry will likely never see the 17.4 million units of the recent, now long forgotten past.
The next peak? Maybe 16 million units by the middle of the next decade.
Moreover, McAlinden hedges his optimism with some inconvenient facts.
- No recession in recorded history has ever been this deep or this long.
- Auto sales since the 1948 recession do not rise until Gross Domestic Product reaches more than 3% growth rates.
- No one is forecasting that even 3% growth will be achieved next year.
- We are looking at the lowest sales rates since the 1970s.
His cautious outlook – and his is a relatively optimistic scenario if you look at other analysts – comes after the government pumped in more than $123 billion in support of the industry and its suppliers during the last year.
In fact, the industry is tracking right where it was one year ago post Lehman Brothers collapse and the global financial meltdown, resulting in a 10.3 million-production total for 2009.
Therefore, another year of 11 million units or so is possible. Moreover, this seems to be the number that most auto companies are using for planning volumes right now.
Then there is the possibility of a real ugly year in 2010 with the Great Recession returning anew, causing a decline in sales to 9 million units.
So fasten your safety belts, while most automakers are glad to see 2009 go. It is too early to ring in 2010 with anything but cautious optimism.