The recent recession brought the failures of the auto industry to the forefront. The government was forced to bailout major automakers to stave off the collapse of a significant contributor to the overall economy. Since its heyday in the mid-twentieth century, the auto industry has been a key employer, a major factor in the GNP and an indicator of the overall US economic health.
It’s good to know, then, that 2012 was the best in five years for the US auto industry and that 2013 looks to be even better. With vehicle sales accounting for 30% of the country’s domestic economic growth, a good year for auto makers is a good year for the United States.
Over 14 million cars, trucks and other vehicles were sold in the US in 2012. Part of the reason for the increase in sales is the recent financial crisis. Families couldn’t afford to buy a new vehicle in the past five years resulting in the average age of cars on US road rising to 11 years or older. Those older cars are now beginning to be replaced, with some experts predicting that 2013 and beyond will see even larger increases in car purchases
The leading seller in 2012 was General Motors who sold almost 2.6 million vehicles. Other domestic manufacturers did well with Ford selling 2.17 million and Chrysler 1.65 million and Toyota sales also topped 2 million. While middle-class brands like Dodge selling 524,000 vehicles, luxury brands like Lincoln actually slipped.
Investors are seeing growth in the auto industry. Stock prices for GM and Ford both rose in 2012. GM saw a gain of 42% compared to 2011 while Ford shares finished the year more than 20% higher than 2011.
Much of that stock investment is a reflection of predictions from industry experts at Polk automotive information and marketing solutions. They expect vehicle registrations to climb another 6.6% in 2013. Registrations of new vehicles should rise to 15.8 million in 2014 and in 2015 reach 16.2 million. This will approach the 17 million mark from pre-recession years.
A major contributor to this resurgence is the automakers themselves. In the coming year they are expected to introduce 43 new vehicles to the market as well as redesigning 60 of existing models. So much novelty should draw car lovers to the showroom which will translate to increased sales.
Other factors that could positively influence auto sales include lower interest rates, improved vehicle quality, and a weak-but-stable value for the US dollar.