Motor Vehicle Outlook

1
Motor Vehicle Outlook

• Motor Vehicle Outlook
• FTA Revenue Estimating Conference
• Waterville Valley, New Hampshire
• September 25, 2000

Mark Haas, Director Jeffrey Guilfoyle,
Economist Office of Revenue and Tax
Analysis Department of Treasury State of Michigan
2
U. S. Automotive Outlook

• What Affects Auto Purchases
• Changing Auto Market
• Shares of Production
• U. S. Automotive Outlook

3
Factors Affecting Auto SalesAbility to Buy
4
Real Disposable Income Growth
Source U.S. Bureau of Economic Analysis
5
New Domestic Car Prices Stable
Import 30,347 (-5.1)
Domestic 18,724 (0.8)
Sources AAMA Automotive News, Market Data
Book 2000
6
Low Interest Rates Help Sales
17.78
7.84
Source Comerica Bank
7
Best Affordability Since 1980
24.4 weeks in 1999 23.1 weeks 1st half 2000
22.9 weeks in 1979
Source Comerica Bank Economics Department
8
Consumer Debt Payments Installment, Mortgage
Auto Leases
14.8
2000
Source Michigan Department of Treasury
9
Factors Affecting Auto SalesWillingness to Buy
10
Consumer Car Buying Attitudes
158
144
Source University of Michigan, Survey Research
Center, July 2000
11
Vehicle Age Declining
1999 Median for Cars 8.3 years
1999 Median for Trucks 7.2 years
Source Automotive News, 1999 Market Data Book
12
Vehicles Per Household
1.90
1.81
1.22
13
Oil Prices Rising
35.24
27.10
Source Monthly Energy Review, Standard and
Poors DRI
14
More Dependent on Petroleum Imports
Total 56.6
All-OPEC
Persian Gulf
Source Monthly Energy Review
15
Stock Market Growth Slows
1518
Aug-00
16
Demand For Motor Vehicles

• Trend
• Wealth Effect
• Economic Conditions
• Price Incentives

17
Vehicle Sales Trend

Sales
Trend
Source Michigan Department of Treasury
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Motor Vehicle Production

• Capacity Utilization
• Worker Bonuses
• Occupational Mix Changing
• Improved Vehicle Production Management
• Improved Vehicle Demand Management

19
1999 Production and CapacityNorth America
111
92
Source Automotive News, 2000 Market Data Book
20
Big 3 Profit Sharing Checks

Daimler Chrysler
8,100
Ford 8,000
GM 1,775
Source Wards Automotive Reports
21
Occupation Mix Shifts in Michigans Vehicle
Industry
21.8
Source Bureau of Labor Statistics Economy.Com
22
Improved Vehicle Production Management
0.52
Source Bureau of the Census
23
Improved Vehicle Demand Management
35.7
25.2
Source Wards Automotive Reports, Economy.Com,
WEFA
24
2000 Forecast Accuracy
25
Light Vehicle Forecasts
26
U. S. Motor Vehicle OutlookCar and Light Truck
Sales Forecast
Forecast
Source University of Michigan, RSQE, August 2000
27
U. S. Motor Vehicle OutlookCar Sales Forecast
Forecast
Source University of Michigan, RSQE, August 2000
28
U. S. Motor Vehicle OutlookLight Truck Sales
Forecast
Forecast
Source University of Michigan, RSQE, August 2000
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U. S. Motor Vehicle OutlookSummary

• Record Level Sales
• Vehicle Mix Continues to Shift
• Income and Affordability Key to Sales
• Near Capacity Production
• Oil Prices and Stock Market Uncertain

30
Motor Vehicle Outlook

• Motor Vehicle Outlook
• FTA Revenue Estimating Conference
• Waterville Valley, New Hampshire
• September 25, 2000

Mark Haas, Director Jeffrey Guilfoyle,
Economist Office of Revenue and Tax
Analysis Department of Treasury State of Michigan