U.S. Auto Industry Chartbook

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Pent-up demand supports vehicle sales in the
short-run
•Access to credit improves as banks ease standards
•Business demand benefits from the recovery of the
housing market and the energy boom
•Exports are gaining momentum due to rapid
growth in emerging markets
•Excess inventory could lead to a period of strong
discounts
•Slow personal income growth points to a gradual
expansion of sales
•Asian brands continue to gain market share
•Population growth assures a sustained demand;
the aging process is shifting preferences

Published in: Automotive, Business
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U.S. Auto Industry Chartbook

  1. 1. U.S. Auto Industry Chartbook BBVA Research USA Houston, TX Fourth Quarter 2013
  2. 2. Key messages • Pent-up demand supports vehicle sales in the short-run • Access to credit improves as banks ease standards • Business demand benefits from the recovery of the housing market and the energy boom • Exports are gaining momentum due to rapid growth in emerging markets
  3. 3. Key messages • Excess inventory could lead to a period of strong discounts • Slow personal income growth points to a gradual expansion of sales • Asian brands continue to gain market share • Population growth assures a sustained demand; the aging process is shifting preferences
  4. 4. Sales 4
  5. 5. Demand Total light weight vehicle sales (SAAR, million units) 25 20 Average 2001-2007: 16.7 millions Average 2008-3Q13: 12.9 millions 15 10 Total Domestic Imported 5 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Source: BBVA Research & Haver Analytics 2011 2012 2013 5
  6. 6. Demand Total light weight vehicle sales (SAAR, million units) 135 4.3 130 4.1 125 3.9 120 3.7 115 3.5 110 3.3 105 3.1 100 2.9 Dollar index (left axis) 95 90 2004 2.7 Imported vehicles (right axis) 2.5 2005 2006 2007 Source: BBVA Research & Haver Analytics 2008 2009 2010 2011 2012 2013 6
  7. 7. Demand Total vehicle sales (SAAR, million units) 14 0.6 12 0.5 10 0.4 8 0.3 6 0.2 4 Autos (left axis) Light trucks (left axis) 2 0.1 Medium and heavy trucks (right axis) 0 2001 0.0 2003 2005 Source: BBVA Research & Haver Analytics 2007 2009 2011 2013 7
  8. 8. Demand New auto sales by sector (SAAR, million units) 7 6 Business Consumer 5 4 3 2 1 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Source: Haver Analytics 2011 2012 2013 8
  9. 9. Demand Personal consumer expenditures: quantity index (SA, 2009=100) 160 150 140 130 120 110 100 New autos 90 80 2001 Net purchases of used autos 2003 Source: Haver Analytics 2005 2007 2009 2011 2013 9
  10. 10. Demand U.S. vehicle days to turn (segment average) 65 60 55 50 45 40 2010 Source: Bloomberg 2011 2012 2013 10
  11. 11. Demand Market share by brand (%) 30 25 20 2Q13 2004 15 10 5 0 Source: Bloomberg 11
  12. 12. Demand Quarterly unit sales (year-over-year % change) 60 50 3Q13 2Q13 40 30 20 10 0 -10 -20 Source: Bloomberg 12
  13. 13. Prices Consumer price index: cars and trucks (year-over-year change) 20% 15% New Used 10% 5% 0% -5% -10% -15% 2007 2008 Source: Haver Analytics 2009 2010 2011 2012 2013 13
  14. 14. Prices Auto prices 33 130 32 125 31 120 30 115 29 110 28 27 105 26 Manheim used vehicle value index (left axis) 100 25 True market value (avg. all segments, $ thous, right axis) 95 2007 24 2008 Source: Haver Analytics & Bloomberg 2009 2010 2011 2012 2013 14
  15. 15. Financing conditions Car loan rates (%) 9 8 7 6 48-month new car loan 36-month used car loan 5 60-month new car 4 3 2 2007 2008 Source: Haver Analytics 2009 2010 2011 2012 2013 15
  16. 16. Financing conditions Auto loan 90+ days delinquent (percent of balance) 6 5 4 3 2 1 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Source: Haver Analytics 2011 2012 2013 16
  17. 17. Financing conditions Leasing penetration rate, % 28 26 24 22 20 18 16 14 12 10 2007 Source: Bloomberg 2008 2009 2010 2011 2012 2013 17
  18. 18. Financing conditions Newly originated installment auto loans ($ billion, eop, 4-qtr moving average) 110 100 90 80 70 60 50 40 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Source: Haver Analytics 2011 2012 2013 18
  19. 19. Financing conditions Terms and conditions on auto loans, percentage of respondents (%) 35 30 25 20 3Q13 3Q12 15 10 5 0 Eased maximum maturity Eased spreads on loan rates Eased required downpayment Source: Federal Reserve Senior Loan Officer Opinion Survey Eased required credit score Extent to which loans are granted to some customers that do not meet crefit scoring thresholds 19
  20. 20. International trade Exports and imports of autos (SAAR, $ billion, chained 2009 dollars) 120 100 Exports Imports 80 60 40 20 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Source: Haver Analytics 2012 2013 20
  21. 21. Gasoline Spot price ($/gallon) 4.0 3.5 3.0 2.5 2.0 1.5 2007 Source: Haver Analytics 2008 2009 2010 2011 2012 2013 21
  22. 22. Gasoline Future prices ($/gallon) 2.90 2.85 2.80 2.75 2.70 2.65 2.60 2.55 1-month ahead 3-months ahead 6-months ahead 2.50 2.45 22 Source: Bloomberg
  23. 23. Consumers 23
  24. 24. Consumers Consumer sentiment index 100 Current economic conditions Consumer expectations 90 80 70 60 50 40 2010 Source: Haver Analytics 2011 2012 2013 24
  25. 25. Consumers Plan to buy a car within 6 months, % of respondents 12.0 11.5 11.0 10.5 10.0 2010 Source: Haver Analytics 2011 2012 2013 25
  26. 26. Consumers Employment and real disposable personal income growth (yoy change) 6% Average RDPI growth 2001-2006 = 3.2% Average RDPI growth 2010-2Q13 = 1.7% 4% 2% 0% -2% Real disposable personal income -4% Employment growth -6% Source: BBVA Research and Haver Analytics 26
  27. 27. Household equity Household equity and home prices 160 15% 140 10% 120 5% 100 80 0% 60 -5% 40 -10% Owners equity in real estate (NSA, Bil $, left axis) 20 FHFA house price index (yoy change, right axis) 0 -15% 00 01 02 Source: Haver Analytics 03 04 05 06 07 08 09 10 11 12 13 27
  28. 28. Savings and deleverage Debt-to-income ratio and savings rate 16 8 15 7 14 6 13 12 5 11 4 10 3 9 2 Debt service ratio (right axis) 8 Personal savings (left axis) 7 1 12 per. Mov. Avg. (Personal savings (left axis)) 6 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Source: Haver Analytics 2011 2012 2013 28
  29. 29. Production 29
  30. 30. Production Auto production 6 160 140 5 120 4 100 3 80 60 40 20 2 Industrial production index: autos (2007=100, left axis) 1 BEA auto production estimate (SAAR, million.units, right axis) 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Source: Haver Analytics 0 2012 2013 30
  31. 31. Capacity utilization Industrial production: automobile and light duty motor vehicles (SA, % of capacity) 100 90 80 70 2001-2007: 79.1% 60 50 2Q13: 75.5% 40 30 20 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Source: Haver Analytics 2011 2012 2013 31
  32. 32. Investment Private fixed investment: autos & equipment (billions of chained 2009 dollars) 180 Autos & equipment 160 Light trucks including utility vehicles 140 120 100 80 60 40 20 0 2002 2003 Source: Haver Analytics 2004 2005 2006 2007 2008 2009 2010 2011 2012 32
  33. 33. Structural 33
  34. 34. Fundamentals Mean age of passenger cars in operation Vehicle registrations Years Millions 12 260 250 11 240 230 10 2011: 245 2012: 11.3 9 220 210 200 8 190 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 Source: Haver Analytics 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 180 7 34
  35. 35. Demographics Population projections by age (millions) 300 65 years and over 250 15-44 years 200 150 100 50 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040 2042 2044 2046 2048 2050 2052 2054 2056 2058 2060 0 Source: Haver Analytics 35
  36. 36. Demographics U.S. licensed drivers by age 25% 20% 2001 2011 15% 10% 5% 0% Les than 19 years old Source: Haver Analytics 20-29 30-39 40-49 50-59 60-69 70 and more 36
  37. 37. Electric cars New U.S. plug-in vehicle sales (thousands) 12 10 8 6 4 2 0 Source: Electric Drive Transportation Association 37
  38. 38. Forecasts 38
  39. 39. Forecasts Average Auto sales (millions units) GDP growth (% change) Unemployment rate (%) Fed funds (%) 3-year Treasuries (%) Source: BBVA Research 2012 2013 2014 2015 14.4 15.6 16.3 16.7 2.8 1.6 2.3 2.5 8.1 7.5 7.0 6.4 0.14 0.19 0.25 0.33 0.38 0.62 1.07 1.78 39
  40. 40. U.S. Auto Industry Chartbook BBVA Research USA Houston, TX Fourth Quarter 2013

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