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The US automotive industry will move into the slow lane in 2014 as fewer buyers replace aging vehicles and growth drops to half this year's rate, the head of Toyota Motor Corp's North American operations said on Wednesday.
While US industry sales are expected to grow by 1 million vehicles to 15.5 million this year, Toyota North American Chief Executive Jim Lentz said he expects the 2014 total to be closer to 16 million.
"Do I think we're going to grow another million this next year? I don't think so," Lentz said in an interview at the Los Angeles Auto Show.
"We're going to see a tapering off of that growth over time because a lot of that pent-up demand that was out there has been satisfied."
In addition to new vehicles and lower interest rates, Lentz, like many industry executives, credited growth this year to the need for consumers to replace vehicles that are now on average more than 11 years old, a record.
While his company hasn't finalised its forecast for total US market sales in 2014, Lentz said the general consensus was around 16 million, and Toyota's estimate would likely be close to that total.
Honda Motor Co's US CEO Tetsuo Iwamura said on Wednesday at the show that his company expects US industry sales next year to be in the high 15 million range, above this year's volumes.
Lentz said he expects pent-up demand for vehicles other than full-size pickup trucks to taper off next year. Pickup truck demand will remain strong because that is tied to the recovering housing and construction markets and the average age of those vehicles remains very high.
"When you look at it segment by segment, with the exception of pickup truck I think a lot of that pent-up demand has probably already been satisfied," he said.
Lentz said the growth the US industry sees next year will be driven by lower unemployment and higher consumer confidence, and said he was not concerned about a return to profit-sapping incentive wars.
The executive said most automakers have remained disciplined about incentives. Most could easily reduce capacity if needed by simply eliminating