Automotive Sales Numbers Are Encouraging
Wednesday was a big day for the auto industry - it was numbers day. On February 1, the major automakers released their sales numbers for 2011, their profit numbers, January sales numbers for 2012, and their predictions for 2012 overall.
A search of the Internet will reveal multiple articles that detail the sales numbers for each and every automaker. Yes, the numbers are important but for this blog post, we’ll focus on the big three U.S. automakers and try not to get to wrapped up in percentages.
For the first time in a long time the Chrysler Group is stealing the headlines - and for good reasons. On Wednesday, the Chrysler Group reported its first profit since 2005. This is very refreshing news for those watching the automotive industry. It was only a little over two years ago that the Chrysler Group needed a federal bailout, filed for bankruptcy and were taken over by Italian manufacturer Fiat.
In 2011, the Chrysler Group earned $183 million. This is a massive rebound and recovery for the automotive group that reported a loss of $652 million in 2010. This resurgence speaks to the strength of the Chrysler Group brands of Chrysler, Dodge, and Jeep.
The good news for Chrysler Group doesn’t end here - the company forecasts to make $1.5 billion in 2012 - an 18 percent jump in revenue. As for the other two U.S. automakers? Ford has reported its biggest profit since 1998 with a net income of $20.2 billion in 2011. What makes these numbers interesting for Ford is that 2011 was the company’s second most profitable year in its 109-year history. Though, these numbers do need to be taken with a grain of salt since this net income number was attributed to a non-cash gain and in the end it means that Ford’s numbers did not live up to forecasts. The numbers aren’t out for General Motors just yet, but the company is predicting to report better earning numbers for 2011. These numbers will be interesting since it was only in 2009 that the company needed a bankruptcy bailout.
So, that’s a lot of numbers to digest. What do these numbers tell us? Well, just as the pundits were predicting - the automotive industry is on the up-swing. 2011 marked the first year since 2004 that all three major automakers were profitable in the same year.
Experts are attributing this steady growth and recovery to a number of factors, including:
- Favorable credit economy
- Solid inventory of available vehicles - particularly light vehicles
- Consumers are ready to spend
It is this last point that is most interesting: Consumers are ready to spend. With the average age of vehicles on the road sitting at 10 years - we’re ready to visit dealerships and research our next new car purchase. With the newspapers and other media full of good news stories of people recovering from the housing crash, of new companies starting, of a slight resurgence in employment numbers, steady growth in retail sales - this all trickles down to the automotive industry.
Buying a new vehicle is a big purchase and not one to be taken lightly - but with the positivity in the economy, good credit rates, and some innovative and affordable new vehicles - all this makes buying a new car, truck, or SUV much more manageable for consumers - just like you.
Time will only tell what the rest of 2012 holds for the automotive industry. As the numbers trickle in, we’ll be here with the latest in car news, research and analysis.