Pub. 1 2011 Issue 1

11 Q vehicle demand — continued on page 12 L et’s first examine the numbers to assist in understand- ing just howmuch new vehicle pent up demand there may be out there: • In the five years prior to 2008, the average U.S. new vehicle seasonally adjusted annual sales rate (S.A.A.R) was approximately 17.1 million per year. • New cars and light trucks scrapped in the U.S amount to about 15 million per year. • The average U.S. new vehicle sales for the three years 2008 – 2010 was approximately 11.7 million vehicles per year, substantially below both a normal year’s sales volume, as well as the scrapped units per year. • The U.S Census Bureau recently announced that the U.S. population was approximately 305 to 312 million individuals. Over the past two decades, the population in the country has been steadily growing at the rate of approximately 1 percent per year. What this implies is Most analysts agree that there is currently a large pent up demand for new vehicle purchases among U.S. consumers and that this condition has been growing since 2007. The critical question arises as to when the tipping point will be reached when this pent up demand will be unleashed and dealer showrooms will become substantially busier. BY THE NUMBERS BY JAMES EAGAN CPA, PARTNER AND AUTOMOTIVE CONSULTANT, PLANTE & MORAN PLLC New Vehicle Pent Up Demand – How Much? When Will It Be Unleashed?