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Low gasoline prices and pent-up consumer demand will combine to drive new car and light truck sales to an estimated 16.94 million in 2015, according to the National Automobile Dealers Association. NADA’s original sales forecast of 16.4 million new cars and light trucks for 2014 was on target. NADA represents more than 16,200 new-car dealerships both domestic and international franchises.
The split among the segments this year is expected to be 44% cars and 56% light trucks and SUVs because of lower gasoline prices, increased job growth and an improving housing market.
We expect to see significant growth in sales of light trucks, particularly in the large-size CUV and SUV segments. At the end of the day, consumers like the utility and comfort that larger vehicles provide. Lower gasoline prices accelerate that shift.—NADA Chief Economist Steven Szakaly
The pickup truck segment, in particular, is expected to benefit from an improving housing market, climbing to 15.2% this year from 13.7% in 2014.
On the downside, small and mid-sized cars are likely to face a tougher market in 2015. Szakaly expects incentives to rise on small and midsize vehicles. In addition, hybrid sales are expected to be slower as long as oil remains cheap.
Midsize cars are expected to decline in share of total light vehicle sales from 18.6% to 17%, while small cars are expected to lose 1% of share.
The one area where prices and segment share are likely to remain stable is in the luxury segment.—Steven Szakaly
NADA’s economic outlook calls for gross domestic product to be up 3.1% in 2015, with the potential for growth to exceed that level.
January 23As the popularity of e-cigarettes increases, the FAA wants airlines to ensure passengers dont put their e-cigarettes in checked baggage, when they can pose a fire hazard in the cargo compartment.
The FAA today released a Safety Alert for Operators (SAFO) making U.S. air carriers aware of a recent bulletin from the International Civil Aviation Organization (ICAO) that described several incidents associated with e-cigarettes, as well as ICAOs recommendation to ban the devices in checked baggage. ICAO is the arm of the United Nations that develops and disseminates suggested standards for the international aviation community.
In several incidents both inside and outside the transportation industry, e-cigarettes have overheated or caught fire when the heating element was accidentally activated. Last August, an e-cigarette in checked baggage stowed in an airliners cargo hold caused a fire that forced an evacuation of the aircraft. The danger may be increased when users modify and rebuild their reusable e-cigarette devices and interchange original and aftermarket batteries, heating elements, and vaporizing components.
The FAA SAFO recommends that operators follow the ICAO bulletin and require passengers to carry e-cigarettes and related devices solely in the aircraft cabin, where overheating or fire can be observed and handled more quickly. The agency encourages airlines to communicate this new policy to passengers as widely as possible through their websites, press releases, at ticket purchase, during the check-in process and by other established means to inform passengers about hazardous materials regulations and policies.