When General Motors and Chrysler went through their restructuring (ahem, bankruptcy) processes, a key point was making sure these companies would be sustainable with lower overall industry sales. While market share for American companies has been on the rise, usually there isn’t wild swings. Point being – 18 percent of the market at 16 million units overall is a whole lot different figure than 18 percent of the market at 10.9 million units.
And, that is exactly what happened during the depths of the U.S market crisis; at one point, 16 million new vehicles a year were sold in the United States. With those numbers you can see the magnitude of the issues these companies were facing. For 2011, automotive sales are set to check in at around 12.7-12.8 million units, a strong increase over 2010′s levels.
Thanks to a reduction in overhead costs, GM and Ford have now become nicely profitable at these levels. Imagine what kind of figures they will be posting as the market recovers! According to Automotive News, industry sources are saying the industry is gaining momentum, and that sales in 2012 could be on track to hit up to 14 million (average is 13.6 million).
Prognostications for that rise are coming despite a lot of headwinds that could be facing the U.S economy next year. According to the four firms analyzing the market, auto buyers in the U.S are becoming desensitized to bad news. As an example, when the Dow Jones plummeted 1,500 points this year during the debt ceiling debate, car sales remained steady.
Factors like an aging fleet and easier credit are pushing sales upward despite headwinds. It’ll be interesting to see what 2012 holds. For one thing, there is a lot of exciting new debuts. After a lot going on in 2010, 2011 was kind of a down year in terms of new models. That could have a lot to do with it. Analysts have been wrong many times before, but this is one prediction that seems realistic.
Filed Under: Car News