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Increased Vehicle Sales Drive U.S. Economic Rebound

Jun 12, 2012

Car sales are running at the fastest pace in four years and are poised to spill over into production, profits and jobs for Americans as the U.S. economy continues to rebound. Auto purchases have exceeded a 14 million annual rate in each month this year, the strongest performance since early 2008, according to Ward’s Automotive Group. Automotive sales have rebounded since demand plunged during the recession that began in December 2007. Rising employment, an improvement in consumer confidence, a thaw in lending and the need for consumers to replace aging vehicles are facilitating the revival in sales of cars and light-duty trucks. All indications are that automotive sales will remain positive in the coming months. Several manufacturers have raised their year-end projections and analysts surveyed by Bloomberg predict sales of 14.3 million vehicles for the year, up from a January forecast of 13.6 million vehicles.Used Vehicle Sales Expected To Increase As the economy picks up and recovers from the recession, what can the industry expect from their used vehicle departments? IBISWorld, an industry research firm, recently released a report entitled “Used Car Dealers in the U.S.,” which aims to provide some context for where used vehicle sales are headed. The adoption of lease-here, buy-here financing options will aid dealerships, but the organization of the Consumer Financial Protection Bureau, as well as increased regulation, could put a damper on growth and potentially limit financing practices, according to the IBISWorld report. Though used-car dealers may be facing growing competition from new-car stores, dealerships that sell pre-owned vehicles may not be experiencing as many lingering effects from the 2007 economic downturn, according to IBISWorld.May Auto Sales Soar By Approximately 30% According to J.D. Power and Associates, sales of cars and trucks increased approximately 30% in May compared with the same month last year when an earthquake and tsunami in Japan led to inventory shortages at dealerships and gas prices dampened consumer demand.