Archive for January 2010
The U.S. auto industry had one heck of a year in 2009. Nearly every automaker in the United States struggled to stay afloat and sales plummeted thanks mostly to the recession. December, however, did bring some good news as the industry continued it’s slow rise out of the pits. While shoppers’ enthusiasm is still below pre-crises levels there was a slight uptick in auto sales during the last month of ’09.
The annualized rate of U.S. auto sales went up to 11.2 million, which is up from 9.1 million at the end of 2008 but still far below the 16 million it was before the economy bottomed out. Like Jessica Caldwell, senior analyst at Edmunds.com, said, “It’s not even growth, really — it’s more like stabilization”.
Some U.S. automakers are being hit much harder than others. Of course, GM and Chrysler have been the two most negatively impacted by the recession. Chrysler’s December sales were down 4% from last December and annual sales were down 36% for 2009. General Motors, which is now largely owned by the United States Government, saw December sales drop 6% below December ’08 levels. GM’s annual sales were also down 30% from 2008. For GM, those drops can be attributed to a reduction in fleet sales, a drop in spending for consumer incentives, and the decision to close the Pontiac and Saturn brands. Thanks to the U.S. Government’s bailouts of these two automakers and a $3 Billion Cash For Clunkers program auto sales were able to somewhat stabilize.
China, meanwhile, surged and has nearly matched the U.S. as the largest auto market.
The brightest spot for the U.S. auto industry has been the performance of Ford, which did not take any government bailout money. Ford’s annual sales were down from 2008 but December sales were up 33% from the same month in ’08. The company’s stock has also surged to over $11 per share, up from just over $1 a share in early 2009.
Some people project that the number of cars scrapped in 2009 was higher than the number of new cars sold. This number wouldn’t be inflated by Cash For Clunkers because each clunker was traded for a new car. Public transportation in the United States has become more heavily relied upon as a result. Although there may be a slight shift away from personal transportation to public transportation, John DeCicco, a University of Michigan lecturer and former senior fellow at the Environmental Defense Fund, believes the U.S. is far from ending it’s love affair with the automobile.