Even though many people have been predicting a decline in the U.S. auto industry, the sales volume of automobiles over the past four years indicate more of a resurgence in the health of the industry than any kind of downturn. In fact, last year’s sales approached a total of 20 million new cars and trucks sold, which is a record-setting pace, indicating that the auto industry is alive and kicking in this country.
Industry experts point to the low cost of gas and fairly loose credit terms as factors spurring the explosion of interest in new vehicles. Since unemployment rates are holding steady at or below 5%, this means the vast majority of Americans are finding a new vehicle to be economically viable in their lifestyles, and that is contributing to the brisk rate of sales over an extended period of time.
Most popular vehicles
Probably the single biggest type of vehicle which has captured the fancy of the auto-buying public is the compact SUV, a vehicle which has the capabilities of a sporty recreational kind of car, while also offering the economy of a compact, gas-friendly vehicle. More than any other kind of automobile, the numerous models of compact SUV’s have fueled the public craze for new vehicle purchases. While virtually every type of SUV has found a market among purchasers, other newly introduced vehicles continue to struggle to find favor.
Avoiding past mistakes
The Big Three automakers are determined to avoid the mistakes of the past, and are therefore reluctant to ramp up production or take a chance on expensive new cars, even in the face of apparently strong demand. This fact pretty much guarantees that all three will continue to play it safe, and minimize manufacturing of those vehicles considered to serve niche markets, such as sports cars and luxury vehicles, while maintaining solid production levels of SUV’s and other vehicles which drive like trucks. In any case, you can expect the Big Three to continue emphasizing those vehicles which consumers have shown the most interest in, so as to avoid being burned as in the past.
The current state of the auto industry
It has been more than four decades since the auto industry has experienced the kind of growth which has been demonstrated in the past four years. This should convince anyone who may be skeptical about the industry’s overall recovery from the depressed conditions of 2008-2009, when a massive government bailout was needed to prop up the auto business. The only industry in this country which employs a larger number of people than the automotive business is the aerospace industry, with approximately one of every 17 workers in the U.S. involved in some way with automotives.
In total, the auto industry generates well over $600 billion to the U.S. economy every year, which is a staggering figure that points to the general health of the business. In terms of its effect on the economy as a whole, it’s interesting to note that for every dollar invested in auto manufacturing activity, about $1.48 is returned to the general economy, by which it can be seen that automotives has a tremendous impact on all other economies in the country.
With the fate of so many workers in this country tied to the fortunes of the auto industry, and the impact on the economy as a whole extremely significant, it’s safe to say that the auto industry is still a major factor in the U.S. economy, and that it will be for some time to come.
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