(Reuters) – Automakers could be betting on a potential boost in demand from a new federal infrastructure program to boost sagging sales and clear inventories of cars and trucks, the head of Toyota Motor Corp’s North American operations said on Thursday.
Toyota North America Chief Executive Jim Lentz told reporters at a briefing that demand for new cars and light trucks in the United States is slowing, and he forecast sales of 17 million to 17.2 million vehicles this year, down from a record 17.55 million vehicles last year. Inventories of some vehicles are high, and Lentz said he does not believe current levels of discounting are sustainable.
“I will take 17 million all day, ” Lentz said, during an event to mark the $154 million expansion of Toyota’s technical center near Ann Arbor, Michigan.
Lentz said the possibility that President Donald Trump could win congressional approval of his proposed $1 trillion infrastructure rebuilding plan could be encouraging automakers to maintain higher than normal inventories, in anticipation that the federal spending will translate into strong sales of trucks and other vehicles.
“If you get a $1 trillion stimulus, that could add 800,000 units, ” Lentz said.
