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Auto Sales Outlook Robust, Despite Economic Pessimism, Survey Shows
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Though American consumers remain pessimistic about the general economy, they are bullish when it comes to new auto purchases -- driven by generous incentives and exciting car models. The average age of current vehicles is also helping boost sales.

Neither a slight decline in purchase intent nor continued pessimism among consumers regarding the economy is likely to dampen growing momentum in new vehicle sales, according to the latest reading of the TechnoMetrica Auto Demand Index.

The Index reading for December declined slightly to 82, a 2.4% drop from last month’s ADI of 84. Accordingly, as we enter the new year, auto sales are not likely to decrease significantly in the coming months.

The TechnoMetrica Auto Demand Index is a monthly nation-wide survey of American adults conducted to determine the public’s interest in buying or leasing a new vehicle within the next six months. The December results ended two straight months of positive growth in the ADI. However, December’s reading of the Auto Demand Index is still four points above the 12-month average of 78. The slight decline in purchase intent can be attributed to a recent increase in gas prices, which remain a powerful influence on consumers’ budgets and spending behaviors.

TechnoMetrica Market Intelligence computes the Auto Demand Index based on responses to the question: How likely is it that you will buy or lease a new vehicle within the next 6 months? Would you say very likely, somewhat likely, not very likely or not at all likely?

The share of likely buyers remained unchanged from November, at 14% this month.

Despite the significant improvements in vehicle sales and purchase intent that have occurred over the past year, consumer confidence continues to linger in negative territory. The IBD/TIPP Economic Optimism Index, another monthly barometer produced by TechnoMetrica, registered at 43.1 in December, which was the fourteenth straight month it had shown a reading below the neutral level of 50.

However, neither consumers’ persistent pessimism nor the modest decline in ADI is expected to have a major impact on auto sales in the immediate future.

“Although American consumers remain somewhat pessimistic about economic conditions because of high gas prices and high unemployment, our survey shows that auto sales will continue to be robust in the coming months,” says Raghavan Mayur, president of TechnoMetrica Market Intelligence. “The car companies are offering generous incentives and exciting new models, the average age of vehicles on the road is still very high, and honestly, consumers are just tired of postponed gratification.”

These numbers come at the end of what has proven to be a roller coaster year in purchase intent. After the ADI climbed by 12 points in February, signaling a promising year ahead, the index then fell continuously for three straight months, remained unchanged in June, and dropped again in July, to a score of 64. However, August registered an impressive 22-point increase to an ADI of 86, the year’s highest reading. The final months of the year also showed up-and-down movement.

In addition to overall purchase intent, the Auto Demand Index survey also asks likely buyers which brand of vehicle they would be most likely to purchase. In December, Ford was the number one brand named, with a share of 20%, while Toyota, chosen by 13% of likely buyers, came in second. During the same period, Honda experienced a six point decline from November’s reading, to a share of 10% this month. Rounding out the top five brands were Chevrolet (7%) and Nissan (6%).

When asked which type of vehicle they would be likely to purchase, consumers picked mid-size vehicles as their number one choice, at 31%, followed by full-size (15%) and compact (14%) cars. Additionally, demand for mid-size vehicles exhibited the most growth from last month, when it held a share of 24%.

In terms of demographics, consumers with household incomes greater than $100,000 recorded the greatest increase in intention to acquire a new vehicle, climbing 20 points from the previous month to a score of 127 in December. Unmarried and Southern car owners also saw a sharp rise in purchase demand, while those with household incomes between $30,000 and $50,000 experienced the greatest decline, over the past three months.

Each month, TechnoMetrica uses Random Digit Dial telephone methodology to conduct live interviews with more than 900 respondents, using both landlines and cell phones. The margin of error for the survey is +/- 3.3 percentage points. Additionally, recent statistical analysis has shown a strong correlation between the Auto Demand Index and actual U.S. vehicle sales. The correlation is 0.76.

About TechnoMetrica Market Intelligence:
TechnoMetrica Market Intelligence Inc. is a progressive full-service research firm established in 1992. The firm, headquartered in Ramsey, New Jersey provides both quantitative and qualitative solutions to the business and government markets. TechnoMetrica has been providing innovative research solutions to many of the world’s most respected automotive brands for over a decade. In partnership with Investor’s Business Daily, TechnoMetrica conducts IBD/TIPP polls, including the nationally-recognized IBD/TIPP Economic Optimism Index. IBD/TIPP was the most accurate pollster in both the 2008 and 2004 presidential elections, according to final FEC-certified results of those elections. TIPP is also the polling partner of The Christian Science Monitor and the Monitor/TIPP polls regularly appear in the paper.

Note to Editors:
Users of these statistics should attribute credit and source to TechnoMetrica as this research is proprietary. To review the entire TIPP Auto Demand Index for 2013 visit:

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