Light Vehicles: The auto industry is in its best shape to withstand economic adversity. Auto credit quality is outstanding, and availability will improve this year. Industry pricing power will continue to improve. Leasing is on the way back. Small cars will gain market share but crossovers will remain very popular. Higher fuel economy standards are the next big challenge (opportunity). The industry has done a great job reducing capacity and cost, but cannot rest on its laurels. Initially replacement demand drives volume and longer-term demographics sustain sales. Eventually, the economy, buoyed by expanding employment, will support volume levels that are more normal for the auto industry. The industry has become more profitable and once volume returns, it will become even more so. Light-vehicle sales are pegged at 14.26 million units in 2012, 14.81 million units in 2013, and 15.59 million units in 2014 and exceed the 16.00-million-unit mark beginning in 2015.
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