The automobile industry has been in the doldrums for nearly a decade. However, new sales reports have shown that the industry is finally starting to recover. According to recent a recent report from Autodata Corp, auto sales increased the most in July than any month since 2006.
The newest data from Autodata is encouraging news for the largest automobile companies. It suggests that some of the recent changes they have implemented are starting to pay off. Here are some reasons the industry has grown.
The economic downturn has made it difficult for many consumers to purchase new vehicles. Car companies have finally responded by offering new discounts to lure them in. These discounts seem to have been highly successful. Five of the largest automobile companies increased sales by double digits in July. They are expected to continue offering new discounts to draw more customers.
Back in 2005, a gallon of gas cost $1.84. Prices have nearly doubled over the past decade. Many customers are trading in their gas guzzlers for more fuel efficient vehicles. Car companies have benefited by responding to demand for more fuel efficient cars. These same models also appeal to customers that want to reduce their carbon footprints.
New Safety Features
Car companies have also developed a number of new safety features to reduce the risk of accidents. These features especially appeal families with your children.
More Lenient Lending Requirements
Lenders and dealers have become much stricter about issuing loans since the economic downturn. However, they have finally started to loosen those requirements to boost sales. More people can qualify for loans, which makes it easier to purchase a new car.
Industry Expected to Grow in Months to Come
The industry has grown significantly over the last month. Many experts believe that the industry will continue to grow for the foreseeable future.
However, the industry may still face some challenges. Janet Yellen, the Chairperson of the Federal Reserve, has stated that it may start to taper its quantitative easing program in 2015. Higher interest could dissuade some people from seeking new loans in the near future. However, these people could still have an easier time qualifying for a loan if the economy continues to improve. More stringent regulations could also make cars more expensive, which could drive some consumers out of the market.
While the industry is expected to face some challenges, it is still expected to grow for the foreseeable future. Some surveys have shown that many consumers intend to purchase a new vehicle in the next six months.