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The solid outlook for the economy is certainly a blessing for the auto sector, which is facing myriad challenges. These features provide scope for surplus revenue generation from small cars, which have lower profit margins than large trucks. In fact, automakers are also offering attractive optional to scoop up greater profits. Features such as backup cameras, automatic emergency braking and in-car connectivity are common in most vehicle segments. Most of the automakers are also revamping their popular vehicles with new technologies and visual appeal. In order to stay competitive and boost revenues, automakers have to constantly come up with new and attractive, technologically advanced vehicles. automakers, the European auto giant is also taking China very seriously and coming up with new models designed for that country. According to China Passenger Car Association Vehicle, sales in China is likely to trend up in 2018 as economic benefits propel demand from cities and provinces situated in its interiors.įor 2018, sales are projected to grow about 4%, double the growth anticipated for 2017. In the first 11 months of 2017, retail auto sales in China rose 1.6% to 21.4 million units. This will benefit replacement part manufacturers and retailers, apart from new vehicle manufacturers and retailers.Ī number of automakers, including the likes of Ford and General Motors, have been banking on strong sales growth in China to drive earnings over the next few years. Moreover, by 2021, around 81 million vehicles are expected to be over 16 years old compared with 62 million vehicles today. According to IHS Automotive, as of 2016, the average age of light vehicles was 11.6 years, whereas it was 9.9 years a decade ago. The improved quality of new vehicles is likely to mainly be behind this rise in average age of vehicles over time. roads is adding to higher replacement demand for cars as well as car parts. The rising average age of vehicles on U.S. IHS Markit anticipates China to remain the world’s largest car market in the foreseeable future. Majority of the global growth can be attributed to China. IHS Markit predicts total global light vehicle sales to reach 93.5 million units in 2017, up 1.5% from 2016. One important development is the gradual shift in source of income or cynosure. Though presently, the automotive industry isn’t in great shape, it is not far behind the record-setting previous year. truck sales is likely to continue as chances of any significant rise in oil price in the near term are also slim. auto sector at least in the near term.Īlso, the positive trend in US. These positive macroeconomic factors are likely to aid the U.S. By end 2018, the unemployment rate is projected to decline to 3.9% from 4.1% as of October 2017. For 2018, the apex bank predicts a growth rate of 2.5%, up from 2.1% estimated in September. Recently, the Federal Reserve slightly increased the economic growth forecast for the year 2017 to 2.5%.