Comeback of the automakers

Comeback of the automakers

April 4th, 2012 in Opinion Times

If there was any lingering doubt that strong U.S. new car and truck sales in January and February were an anomaly, then reports Tuesday that the auto industry recorded its best monthly sales in almost four years in March should put them to rest. National and local sales numbers were uniformly robust, a sign that consumers feel increasingly comfortable about the state of the national economy and their personal finances.

That certainly appears to be the case in Hamilton County. Sales of new cars and trucks here rose about 13 percent over the same period last year during the first three months of 2012. That mirrors national sales figures. Some automakers reported record single-month sales in March. Others recorded double-digit increases in year-over-year sales. Volkswagen, for example, said its sales were up 35 percent, resulting in its best March and first quarter since 1973. Moreover, sales trends are positive.

Industry and other analysts generally agree that car and truck sales for 2012 will total between 14.1 million and 14.5 million cars and trucks. That easily will surpass sales of 12.8 million in 2011 and 11.6 million in 2010. Sales, officials agree, are being pushed upward by a series of positive factors that seem to be unaffected -- so far -- by the rise in gasoline prices. Indeed, in some instances, gas prices seem to have prompted a growing number of consumers to buy newer and more efficient vehicles.

Manufacturers are meeting that demand. They've increased their offerings of fuel efficient and attractive small cars -- hybrids, subcompacts and compacts -- and both budget-minded shoppers and consumers concerned about the environment have noticed. The growing availability of credit, low interest rates and deals on some models, especially trucks, are attracting consumers to dealerships, as well. The heavy traffic in showrooms and rising sales are especially welcome. The auto industry, after all, remains one of the foundations of the U.S. economy.

Increases in auto sales have a positive ripple effect. As sales improve, automakers expand manufacturing capacity. As capacity grows, the demand for workers and the need for parts and other supplies swells, creating even more jobs and broad-based economic growth. It's a tried-and-true formula.

It was not very long ago, late 2008, that doomsayers were confidently predicting the end of the auto industry as generations of Americans had known it. Strong sales so far this year and expectations that they will continue suggest that forecast was premature -- and that the once-maligned correctives to help the industry were timely and useful.