Data on unit sales of motor vehicles (light vehicles which include all passenger cars and light trucks up to 14,000 pounds gross weight) are published monthly by Audodata Corporation. Motor vehicle sales are good indicators of trends in overall consumer spending and often are considered a leading indicator at business cycle turning points. In addition, automobile production and the output of related companies like service stations, repair shops and aftermarket parts manufacturers (including supplier and induced impacts) make up over 10 percent of total economic output.
According to Autodata, motor vehicle sales in August were 5.5 percent higher than in August of 2013, and year to date sales were up by 5.1 percent on the year to 11.19 million units. This reflects broad growth across both cars and light trucks, with both domestic and import nameplates reporting increases. Year to date sales varied across manufacturers with some showing sizable increases – for example Chrysler sales are up by 14.2 percent on the year, Nissan sales by 12.4 percent and Mitsubishi by over 28 percent (though this represents just 12,000 cars). Other companies were well off their pace from last year including Volvo (off 11 percent) and Volkswagen which was down 6 percent year to date. Interestingly, the luxury nameplates including BMW, Daimler, Porsche, and Maserati all showed strong gains suggesting that the top end of the market is doing extremely well.
The automotive industry has been leading production, capacity utilization and retail sales figures throughout the year. In effect it is the automotive industry that has led the country out of recession. Prior to the 2008-09 recession the industry was selling around 16.5 million units per year, and now the industry is approaching record sales figures of about 17.5 million units with little sign of slowing down.
While it is unlikely that these record sales will continue indefinitely, robust growth in this sector has been a leading part of the renaissance in domestic manufacturing and has helped push down unemployment levels from record levels particularly in Southern and Midwestern states. In addition, continued strength in this sector will continue to drive such industries as aluminum, metals, tires and rubber, and even retailing. One risk to the continued growth is the impact of both higher interest rates (which will make purchases and particularly leases more expensive) and the impact of higher and higher fuel economy standards that can now only be met with more expensive or much smaller vehicles. Whether or not the American public will accept these new models is yet to be seen.
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