A new record was set in the U.S. Automobile industry on Tuesday as a 5.7 percent increase in sale was experienced. Over $570 billion was spent on new cars by Americans last year, which spearheaded the rise in the automobile industry and put more income into the hands of auto dealers, workers, and their executives.
According to forecasters, another record is expected to be created this year.
According to the data obtained from Auto data Corp, in the year 2015, the U.S. automobile industry sold a total of 17.47 million vehicles, breaking the year 2000 record of 17.41 million vehicles. This increase in sales was made possible thanks to the low cost of fuel, easy credit, and the moderate growth of the economy. The December sales saw a 9 percent increase. When putting seasonal factors into consideration, the sales made in December pushed the total to17.34 million vehicles, which is well underneath the 18.1 million vehicles expected by the “Thomson Reuters poll of 38 economists and analysts.”
This increase in the automobile industry has left people asking if the good times will last long enough. Automakers might relapse into the habit of increasing spending on discounts and end up making car prices so ridiculous that customers would have to wait for better offers.
“The U.S. economy continues to expand and the most important factors that drive demand for new vehicles are in place, so we expect to see a second consecutive year of record industry sales in 2016,” chief economist of General Motors Co. (GM.N), Mustafa Mohatarem commented.
According to Mohatarem, the most important factors are growth in personal income and employment, which would be massive this year.
TrueCar’s chief economist, Oliver Strauss, claims, “Interest rates would have to reach 3 percent next year before we see an inflection point that causes the year over year growth rate to stagnate.”Both TrueCar and various forecasters believe that U.S. sales will hit a total of 18 million this year. And hopefully, the Federal Reserve’s new interest rate will not block sales.
The head of Ford’s U.S. sales, Mark LeNeve, pointed out the fact that there was a continuous shift back and forth between sedans, hatchbacks, SUVs, and trucks by the consumers, thanks to the low price of gasoline.
Toyota Motor Corp (7203.T) (TM.N) saw an 11 percent gain, while Honda Motor Co (7267.T) (HMC.N) saw a 3 percent increases and accounted for U.S. sales of over 1.59 million vehicles. Their December sales rose by 10 percent.
Hyundai Motor Co (005380.KS) experienced a 1.5 percent decrease in their sales, due to their U.S. production being constrained by capacity.
Fiat Chrysler Automobiles (FCHA.MI) (FCAU.N) had a 13 percent increase, and a 19 percent rise was experienced at Nissan Motor Co Ltd (7201.T) in December.
Volkswagen (VOWG_p.DE), due to the diesel emission issue experienced by the company, had a 25 percent drop back in November and still couldn’t fully recover from it, which led to a further 9 percent drop in their December sales.