Auto industry grows despite slow economy

TEMP ORARY February 9, 2012 0

The auto industry saw a 10 percent increase in sales from 2010 to 2011. In 2011, the United States auto industry sold 12.7 million vehicles, and this year the touch-and-go industry is projected to reach even higher numbers. Economists and car companies are projecting sales to increase by roughly the same amount this year, to 13.9 million cars and trucks.

Last weekend, the PA Auto Show supported these projections. Crowds of people packed into the Farm Show Complex browsing and adoring the vehicles that each company brought to the show. In previous years, the show had not been given as much notoriety as it had this year. The turnout exceeded all expectations of the show’s planning team.

With the job market improving, many people are much more willing to buy or lease vehicles than they were in the past. Dr. Sanjay Paul, business department chair and economics professor, explained that, “The job market is improving, and consumers are becoming more optimistic about their immediate prospects. All this is boosting the market for new cars.” This is encouraging those who may have a car that has been running on its last wheels to consider purchasing a new one while the prices are reasonable.

Junior economics major Bob Utzinger expressed that another reason the car industry is seeing such a boost is the low interest rate on loans currently. “The cost of taking out a loan is low, and therefore much more attractive to consumers, and in this case, particularly those looking to invest in a new or used vehicle,” Utzinger explained.

It is important to remember that the auto market will have its peaks and valleys in relation to the economy. Paul explained, “Following the Great Recession of 2008-09, consumers put off buying new cars. They kept their cars longer because of concerns about the state of the economy. But now those cars are getting old and people are looking to replace them.” These dips and rises in the economy have a direct impact on the auto industry and those looking to replace or purchase a vehicle.

One surprise at this year’s show was the variety of vehicles there. Typically, the environmentally-friendly vehicles steal the show. However, the 2012 PA Auto Show is making its mark as one of the most diverse shows to date. Trucks, cars and SUV’s all had a spot at the show in a variety of new shapes and sizes. Just when you thought these cars could not take on any new additions or shapes, automakers proved consumers wrong.

New technology and a return to normalcy with more people shopping for size and comfort over the price tag was also a trend at the auto show. “I think the economy is starting to get to a point … where people are comfortable again,” Craig Klope, a General Motors supervisor, said. “People there for a while were going smaller and smaller, now they [are] going back to what they like.” Whether you’re browsing or in a strong contemplative state, any car dealer will tell you, now is the time to buy.

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