2009 was a dark year for the auto industry. Sales were plummeting, companies were going bankrupt, and GM was sending out drivers like lambs to slaughter behind the wheel of the Chevy Cobalt. Well, we’ve come a long way since then.
GM has been exposed (punished? come on now) and the automotive market is blooming once again.
According to the newest report coming from the IHS (released late last week), global vehicle production is set to expand by 21 million units annually over the next 7 years. This would put the world at a production rate of 106 million vehicles per year!
So, where is most of this growth happening?
It is believed that approximately half of this growth will be coming from China, which some believe is a cause for concern. IHS director Mark Fulthorpe says, “Will it be a long-term threat on a plant by plant basis? Well it would be if the markets weren’t materializing to the rate that’s being expected.”
Fortunately, the United States is still in the game with China, also receiving a positive projection in the IHS report.
Undoubtedly, the auto industry is and has always been a huge segment of the American economy, so this is certainly a big announcement.
But, it’s no surprise, either. In the last year, the American auto market has been visibly alive and kicking. Just take a look at the recent statistics. Over the last four years, American sales have been increasing, with sales increasing by 50% since 2009.
In April of this year, things were no different. In fact, the American auto industry sold nearly 1.4 million units, which is an 8% increase from last year.
Now, it is believed that more than 16 million vehicles are expected to sell in the remaining months of this year alone.
“The momentum has certainly shifted,” said TrueCar executive vice president Larry Dominique. “To get to 16.3 or 16.4, we’d have to have a really strong second half of the year, but I think we’re on course to get to 16.1 fairly easily. As long as the economy stays in expansion mode and interest rates stay low … we should see steady growth.”
Even GM, who is amidst a swarm of controversy, is posting positive figures, riding the coattails of a North American Car and Truck of the year win from earlier this year.
Of course, not every automotive marketplace is growing. According to the IHS report, countries like Japan and South Korea will see significant downsizing as original equipment manufacturers (OEMs) look to move to other markets.
Fulthorpe says, “Segments are changing globally as the emerging markets tip the balance and mature markets come under pressure to downsize.”
Well, thank God that America is moving on up.