As the U.S. economy continues to improve this year, Paul Taylor, chief economist of the National Automobile Dealers Association, predicts more than 13.9 million new cars and light trucks will be purchased or leased in 2012.

Taylor, who is forecasting sales of 13.945 million new cars and light trucks for 2012 in the U.S., cites three key factors for the increase:

(1)   Aging vehicles,

(2)   Affordable credit, and

(3)   Aggressive incentives.

A key factor that will drive new-vehicle sales in 2012, says Taylor, is pent-up demand in the marketplace caused by more consumers shopping out of necessity to replace their aging vehicles.

“With the age of cars and trucks on the road today at nearly 11 years, consumers can no longer delay making a purchase of a new or newer vehicle,” he said.

Another factor that is likely to result in higher auto sales this year is the availability of affordable credit from competing lending sources for auto loans.

“Interest rates on new car loans will remain historically low in 2012, due in part to policy decisions by the Federal Reserve Board to keep rates low and the U.S. economy growing,” Taylor added. “As a result, affordable credit will be widely available in 2012 with more automaker finance companies offering low-interest and interest-free loans for up to 60 months.”

Taylor notes that both domestic and international automakers will wage an aggressive battle to capture U.S. market share in 2012 by rebuilding a diverse selection of vehicle inventory at dealerships, ranging from cars and CUVs to truck-based SUVs. A decline in gasoline prices will also result in car buyers considering a wider range of vehicles in different segments, he added.

“Auto sales typically increase with the exposure given to new vehicles during the auto show season in the first quarter and beyond,” Taylor added. “Lower vehicle costs for car buyers through manufacturer incentives and rebates combined with low interest rates will support stronger sales in 2012. And higher prices on used vehicles mean higher trade-in prices when shopping for a new car or truck.”

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China’s capital Beijing plans to implement congestion fees on some of its major, highly trafficked roads, Chinese Xinhua news agency reported on September 2 The measure is primarily meant to help reduce the heavy pollution caused by the high number of cars and it should lead to a decrease in traffic jams.

Hopefully, it will also encourage the residents of the Chinese capital to rely more on alternative-energy, environment-friendly vehicles. Officials also hope that the new congestion charge will inspire Beijing residents to start using public transport more than personal vehicles.

However, the reports did not mention how the fees would actually be collected or any other specific details regarding the manner in which the authorities plan to implement the measure. The plan encourages nevertheless the use of the so-called new energy cars, such as electric vehicles, as an environmentally-conscious alternative to cars which use fuel.

Unspecified incentives to buy new energy vehicles will also be provided. For the same purpose, the plan pledges to build more electric-vehicle charging stations and to upgrade the equipment in the already existing ones.

Measures to reduce traffic pressure have been introduced since the 2008 Beijing Olympic Games, when car owners could use their vehicles only on certain days, depending on the number of the license plate. However, the measures have not had the desired impact and traffic jams continued to remain a problem.

In January 2011, Beijing began capping new car registrations at a price of 20,000 per month, available through a lottery. That has not slowed the increasing traffic to a significant extent, however, it has deprived tens of thousands of hopeful car owners of the possibility of  buying a car.

Beijing also continued to raise parking fees, expand its subway system and build parallel roads, all in an attempt to relieve its heavy traffic. There are voices saying that the measure will probably not have the expected effects, due to the complexity of the problem. “Neither traffic restrictions nor congestion fees can end traffic jams, because they fail to address the essence of the problem,” said Zhang Chang Qing, a traffic law expert at Beijing Jiaotong University.

“Although the plan does not clarify the exact road sections the government is going to charge tolls on, it is simple logic that if it is the Second Ring Road only, people will swarm to Third and the Fourth Ring Road and cause traffic congestion there. Currently, all the rings are already seeing heavy traffic, so I believe the government will have to set up tolls everywhere.”

In 2009, China became the world’s largest auto market, which has led to a constant growth of car ownership. By 2012 the already heavily-trafficked Beijing is expected to have a total of 7 million vehicles on the road.
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