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Automakers scramble to meet higher demand

Althea Chang
Big Data Download
Automakers scramble to meet higher demand

Auto sales in the past year have exceeded expectations, but the industry hasn't even seen the tip of the iceberg and automakers are rushing to stay ahead of the curve, according to one analyst.

"The average car out there right now is something like 11.4 years old. That's twice what it used to be," noted Karl Brauer, senior analyst at Kelley Blue Book. "So you've got a lot of pent-up demand. I literally see it as almost like a dam that's waiting to burst," Brauer said.

Overall, U.S. automakers plan to spend $434 million to boost vehicle production capacity, according to Brauer. Ford is adding 1,200 jobs and another shift to produce the Ford Fusion at its Flat Rock, Mich., plant and General Motors is investing $167 million in its Spring Hill, Tenn., plant, Brauer noted.

Nissan is building a second assembly plant in Mexico where it plans to produce its Murano crossover vehicle next year, and it plans to build Sentra models in Canton, Miss., and its Rogue models in Smyrna, Tenn., according to Brauer.

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Less expensive and more fuel-efficient compact cars tend to do well among younger drivers, and Mazda plans to ramp up production of its vehicles in that category: The Mazda 2 and Mazda 3. The automaker is investing $120 million in an engine plant in Mexico, and its vehicle manufacturing plant there is expected to start rolling out the Mazda 2 and Mazda 3 in the first quarter of 2014, according to Brauer.

The 2013 Mazda 3 made Kelley Blue Book's list of the top 10 back-to-school cars in fourth place after the 2014 Chevrolet Sonic, 2014 Ford Focus and the 2014 Nissan Versa Note.

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Beyond drivers' itching to get rid of the 12-year-old cars they've been driving around, more attractive styling, in-vehicle technology and better gas mileage could also be major drivers of better-than-expected auto sales in the next six to 18 months, according to Brauer.

"Nobody wants to be caught flat-footed when it's time to sell cars," Brauer said.

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