Michigan 1 Motor Vehicle Outlook FTA Revenue Estimating Conference Waterville Valley, New Hampshire...
-
Upload
antony-day -
Category
Documents
-
view
217 -
download
0
Transcript of Michigan 1 Motor Vehicle Outlook FTA Revenue Estimating Conference Waterville Valley, New Hampshire...
1 1
Mic
hig
a n
Motor Vehicle OutlookMotor Vehicle Outlook
FTA Revenue Estimating Conference
Waterville Valley, New HampshireSeptember 25, 2000
Mark Haas, DirectorJeffrey Guilfoyle, EconomistOffice of Revenue and Tax
AnalysisDepartment of Treasury
State of Michigan
2 2
Mic
hig
a n
U. S. Automotive Outlook
• What Affects Auto Purchases
• Changing Auto Market
• Shares of Production
• U. S. Automotive Outlook
3 3
Mic
hig
a n
Factors Affecting Auto SalesAbility to Buy
1999 2000
Disposable Income Green Green
Vehicle Prices Green Green
Interest Rates Green Green
Affordability Green Green
Debt Yellow Yellow
4 4
Mic
hig
a n
Real Disposable Income Growth
-3.0%
0.0%
3.0%
6.0%
1970 1980 1990 1999
Change in Per Capita Income
Source: U.S. Bureau of Economic Analysis
5 5
Mic
hig
a n
New Domestic Car Prices Stable
0
10
20
30
1970 1980 1990 1999
Thousands of Dollars
Sources: AAMA & Automotive News, Market Data Book 2000
Import
$30,347
(-5.1%)
Domestic
$18,724
(0.8%)
6 6
Mic
hig
a n
Low Interest Rates Help Sales
0%
5%
10%
15%
20%
1973:I 1978:I 1983:I 1988:I 1993:I 2000:II
Average Vehicle Finance Rate
Source: Comerica Bank
7.84%
17.78%
7 7
Mic
hig
a n
Best Affordability Since 1980
20
25
30
1979 1982 1985 1988 1991 1994 1997 2000
Weeks of Income
Source: Comerica Bank Economics Department
24.4 weeks in 1999
23.1 weeks 1st half 200022.9 weeks in 1979
8 8
Mic
hig
a n
Consumer Debt Payments Installment, Mortgage & Auto Leases
11
12
13
14
15
16
1983 1987 1991 1995Percent of Disposable Personal Income
Source: Michigan Department of Treasury
14.8%
2000
9 9
Mic
hig
a n
Factors Affecting Auto SalesWillingness to Buy
1999 2000
Consumer Attitudes Green Green
Age of Vehicle Green Yellow
Demographics & Tastes Green Green
Oil Prices Yellow Yellow
Stock Market Green Yellow
10 10
Mic
hig
a n
Consumer Car Buying Attitudes
50
80
110
140
1973:I 1978:I 1983:I 1988:I 1993:I 2000:II
Index: Good - Bad + 100
Source: University of Michigan, Survey Research Center, July 2000
158144
11 11
Mic
hig
a n
Vehicle Age Declining
5
6
7
8
9
1989 1994 1999
U.S. Lt. Vehicle Age
1999 Median for Trucks 7.2 years
1999 Median for Cars 8.3 years
Source: Automotive News, 1999 Market Data Book
12 12
Mic
hig
a n
Vehicles Per Household
0
0.5
1
1.5
2
1960 1970 1980 1990 2000
1.90
1.22
1.81
13 13
Mic
hig
a n
Oil Prices Rising
$0
$10
$20
$30
$40
1973 1978 1983 1988 1993 2000:Q2
Dollars Per Barrel
Source: Monthly Energy Review, Standard and Poor’s DRI
$27.10
$35.24
14 14
Mic
hig
a n
More Dependent on Petroleum Imports
0
10
20
30
40
50
60
1975 1980 1985 1990 1995 1999
Net Imports as % of U.S. Supplies
Source: Monthly Energy Review
Total 56.6%
All-OPEC
Persian Gulf
15 15
Mic
hig
a n
Stock Market Growth Slows
0
600
1200
1800
Jan-90 Jan-93 Jan-96 Jan-99
S&P 500 Index
Aug-00
1518
16 16
Mic
hig
a n
Demand For Motor Vehicles
• Trend
• Wealth Effect
• Economic Conditions
• Price Incentives
17 17
Mic
hig
a n
Trend
0
8
16
1960 1970 1980 1990 2000
Millions of Units
Vehicle Sales Trend
Source: Michigan Department of Treasury
Sales
18 18
Mic
hig
a n
Motor Vehicle Production
• Capacity Utilization
• Worker Bonuses
• Occupational Mix Changing
• Improved Vehicle Production Management
• Improved Vehicle Demand Management
19 19
Mic
hig
a n
1999 Production and CapacityNorth America
9.027
7.996
8.877
8.302
Cars Trucks
Millions of Vehicles
Production Capacity
Source: Automotive News, 2000 Market Data Book
92%
111%
20 20
Mic
hig
a n
$0
$2,500
$5,000
$7,500
$10,000
1995 1996 1997 1998 1999 2000
Average Per Autoworker
Big 3 Profit Sharing Checks
Source: Ward’s Automotive Reports
Daimler Chrysler
Ford $8,000
GM $1,775
$8,100
21 21
Mic
hig
a n
Occupation Mix Shifts in Michigan’s Vehicle Industry
15
17
19
21
1983 1987 1991 1995 1999
Share of Professional Jobs
Source: Bureau of Labor Statistics & Economy.Com
21.8%
22 22
Mic
hig
a n
Improved Vehicle Production Management
0.5
0.7
0.9
1.1
1960 1970 1980 1990 2000
Inventory to Sales Ratio
Source: Bureau of the Census
0.52
23 23
Mic
hig
a n
Improved Vehicle Demand Management
0
10
20
30
40
1986 1988 1990 1992 1994 1996 1998 '00Q1
Leasing Share of Financing
Source: Ward’s Automotive Reports, Economy.Com, WEFA
25.2%
35.7%
24 24
Mic
hig
a n
2000 Forecast Accuracy
Aug 1999Forecast
SeptUpdate
WEFA Group 15.4 17.2
Standard & Poor’sDRI
15.7 17.5
Univ. of Michigan 16.0 17.2
Blue Chip 15.3 16.7
25 25
Mic
hig
a n
Light Vehicle Forecasts
2001 2002
WEFA Group 15.9 16.0
Standard & Poor’sDRI
16.6 17.0
Univ. of Michigan 16.1 15.8
Blue Chip 16.0 N/A
26 26
Mic
hig
a n
U. S. Motor Vehicle OutlookCar and Light Truck Sales Forecast
Source: University of Michigan, RSQE, August 2000
Forecast
27 27
Mic
hig
a n
U. S. Motor Vehicle OutlookCar Sales Forecast
8.58.3 8.1
8.78.9
8.38.1
1996 1997 1998 1999 2000 2001 2002
Millions
Source: University of Michigan, RSQE, August 2000
Forecast
28 28
Mic
hig
a n
U. S. Motor Vehicle OutlookLight Truck Sales Forecast
6.5 6.87.3
8.1 8.37.8 7.7
1996 1997 1998 1999 2000 2001 2002
Millions
Source: University of Michigan, RSQE, August 2000
Forecast
29 29
Mic
hig
a n
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 30
Mic
hig
a n
Motor Vehicle OutlookMotor Vehicle Outlook
FTA Revenue Estimating Conference
Waterville Valley, New HampshireSeptember 25, 2000
Mark Haas, DirectorJeffrey Guilfoyle, EconomistOffice of Revenue and Tax
AnalysisDepartment of Treasury
State of Michigan