U.S. Automobile Industry Growth Is Leveling Off, Toyota Says

Jan 12, 2014 11:48 pm ET

(Updates with executive’s comments in fifth paragraph.)

Jan. 13 (Bloomberg) -- Toyota Motor Corp., the world’s largest automaker, forecast slowing car sales growth in the U.S. as the the auto industry there enters a “leveling-off” period.

Toyota estimates it will sell 2.3 million vehicles in the U.S. this year, Jim Lentz, its North America chief, said in Detroit yesterday. The Toyota City, Japan-based carmaker’s deliveries rose 7.4 percent to 2.24 million vehicles last year, according to researcher Autodata Corp.

“Automakers have enjoyed four consecutive year-over-year sales increases,” Lentz said at an industry conference. “This year we believe that the industry will start entering a ‘leveling-off’ period and continued sales growth will be more a result of economic gains rather than pent-up demand.”

Toyota predicts U.S. industry sales of 16 million vehicles, after they rose 7.6 percent to 15.6 million last year, the highest since 2007, according to Autodata. This year may mark just the second time since World War II that the U.S. auto market has expanded for five straight years, as the economy recovers and the unemployment rate declines.

“Steady economic growth and a falling unemployment rate means Americans could start spending more freely again,” Lentz said.

Toyota rose 0.3 percent to 6,290 yen in Tokyo trading on Jan. 10. Japanese markets are shut today for a holiday. The stock surged 60 percent last year amid a weaker yen that helped Toyota take market share from Hyundai Motor Co. in the U.S.

Five Years

The last time U.S. sales rose for five straight years was 1996 to 2000. Deliveries of new cars and light trucks may rise to 16.1 million in 2014, the average estimate of 13 analysts in a survey by Bloomberg News in September. That compares with 16.15 million sold in 2007.

Competition will increase this year in the U.S. as the Detroit Three -- Chrysler Group LLC, Ford Motor Co. and General Motors Co. -- release new models such as redesigns of the Ford Mustang, Ford F-150 pickup, Chevy Tahoe and Chrysler 200 sedan.

Hyundai, South Korea’s biggest automaker, is counting on the revamped Genesis, which won the North American Car of the Year award in 2009, and an overhaul of the Sonata mid-size sedan, the carmaker’s bread-and-butter model, to increase sales in the U.S.

To help revive market-share gains, the Korean company named David Zuchowski, a 33-year auto industry veteran, as the new chief executive officer of its U.S. operations, starting Jan. 1.

Toyota will introduce new models such as the Lexus RC-F, Lentz said. Toyota and Lexus now offer 12 hybrids for sale in the U.S., and between August 2013 and 2015, the company plans to introduce 15 new or redesigned hybrid vehicles globally, he said.

The Camry was the best-selling car in the U.S. for a 12th consecutive year, according to Lentz.

--With assistance from Alan Ohnsman in Los Angeles. Editors: Lena Lee, Suresh Seshadri