Auto sales may have less room to grow because Americans are increasingly willing to settle for owning one car or truck, according to Itay Michaeli, a Citigroup Inc. analyst.
The CHART OF THE DAY displays the average number of vehicles for every U.S. driver since 1960, according to data that Citigroup compiled from the Federal Highway Administration and Ward’s Automotive Reports. Michaeli included a similar chart in a report two days ago.
Last year’s average was little changed at 1.14, according to his estimate. The indicator of what he called auto density had fallen for three straight years after rising to a record 1.18 in 2007.
“Density may be the single most important factor in this sales cycle,” Michaeli wrote. He estimated that the figure may drop 2.9 percent during the next two years, based on the results of a Citigroup survey of about 2,200 Americans this month. The projected decline widened from 1.6 percent in March, when an earlier poll was done.
The latest survey signaled a weakening of demand for cars and light trucks, according to the New York-based analyst. He cut his sales estimate for this year by 200,000 vehicles, to 14.1 million, and his projection for next year by 500,000, to 14.5 million.
“Demand remains uniquely depressed” for this stage of an economic recovery, Michaeli wrote. Auto sales may retreat to an annual rate of 13 million if density slips to 1990s levels, the report said. The average fell as low as 1.04 during that decade.
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