US consumer auto sales are on the rise, driven by an explosion in demand for premium quality consumer auto components, according to a new report by a leading US auto industry association.
The American Automobile Dealers Association (AAA) is publishing its annual survey of the world’s leading auto parts suppliers, which is expected to draw attention to a key weakness in the industry’s efforts to improve quality standards.
The report, which also examines the growth of the online marketplace for auto parts and the role that technology plays in the sector, comes as the US and Europe struggle to contain a global pandemic that has forced some manufacturers to shut down production.US consumer auto industry sales are forecast to reach $9.7 trillion by 2021, up 16.7 per cent from the previous year, according the AAA survey.
That’s a 10.3 per cent increase from the $908.3bn in 2021 that was forecast by the US Government in January.
However, the AAA says that although sales have picked up, the US consumer is facing significant challenges in making quality standards for parts available to consumers.
“Consumer demand for auto components is growing rapidly, with demand for advanced technology, particularly in the premium segment, increasing,” the association said in a statement.
“This growth is driven by demand for a range of advanced technologies that allow for the rapid prototyping, manufacturing and manufacturing processes to be automated.”
The report says that demand for high-quality components is expected “to continue to grow, even with lower prices, but the challenges in ensuring the safety and quality of these advanced components and the technology used to produce them are becoming increasingly challenging.”
It said the US has the highest level of consumer satisfaction with auto parts worldwide, at 78 per cent, followed by Japan with 75 per cent and the European Union with 69 per cent.AAA chief executive Brian Kelly said the survey highlights the need for the industry to be vigilant in ensuring that the standards for the most advanced components are safe and effective.
“The AAA has seen a surge in consumer demand for parts from consumers and the auto industry, and our industry needs to continue to invest in its safety record,” Kelly said.
The AAA survey also found that the demand for quality components from US suppliers has increased faster than the supply, but that demand has increased slower than the production of the parts.
“In 2018, we saw an increase in demand from US consumers for high quality automotive components that meet the needs of the new consumer vehicle market,” Kelly added.
“However, despite the increasing demand, we have not seen the growth in demand we would have expected to see in 2017.”
Although consumer demand is growing faster than we would like, we do not see the demand in 2018 for high tech automotive parts as robust as we would anticipate.
“Kelly said the growing demand for automotive parts in the US will not help the industry meet demand from manufacturers in Europe and Asia who are struggling to meet rising demand for their products.”
While our industry is seeing growth in consumer and automotive demand, it will not translate into greater supply and demand,” Kelly told Reuters in an email.”
It is important that we understand and address the challenges ahead, including the rapid rise in demand, in order to better meet the challenges posed by the pandemic.
“Kelly also said there are concerns that the current auto industry is still in a fragile state and that the pace of innovation and change is slowing down.”
Despite these challenges, the automotive industry remains highly competitive and will continue to play a pivotal role in the nation’s economy,” he said.