Auto industry financing continues rebound
Jan 18, 2013 Philip Burgess
Several improvements in economic conditions have helped fuel stronger performances in the United States automotive sector. As consumers continue to become more optimistic and subsequently spend more, the auto industry has adjusted its financing options to capture the highest possible sales. These efforts were extremely successful in 2012, and many experts agree that there will be continued success this year.
New trends in auto industry financing have helped keep the sector, which was once at risk of complete collapse during the height of the recession, afloat. Now, reports indicate conditions are improving gradually and consistently, and more used and new car sales firms are enjoying better financial performances than seen before the recession.
December sales big help
The Associated Press recently reported that American auto industry sales in December helped give the sector its best annual performance in 2012 in five years. According to the news provider, the final figures from American car makers totaled 14.5 million units sold, or roughly 13 percent higher than the performance in 2011.
The source explained that a confluence of factors helped boost the industry to a better financial situation, including the average age of a car becoming older than 11 years, which is a record. This, along with higher national employment rates and stronger home sales, combined to provide the auto industry with a much needed shot in the arm.
The AP added that most automakers saw major increases in revenues this year, such as Honda, which enjoyed 24 percent higher sales than in 2012. Additionally, Chrysler saw its sales increase 10 percent in December, capping off 21 percent growth for the year, while Ford and GM experienced more gradual - but positive - gains.
Still a ways to go
The auto industry does have a lot of mountain left to climb to reach performances more indicative of a healthy economy. Highlands Today recently reported that while auto industry sales were stronger than any time since the Great Recession, many analysts point out that revenues aren't close to record numbers seen in 2006 and earlier.
However, experts are looking at 2013 in an optimistic fashion.
"It was certainly a much stronger year and we have a lot of optimism going into 2013," Don Elwell, representative of a major automotive network, explained to the source. "We are seeing some growing consumer optimism, not a whole lot, but a little bit. Also, banks are easing their credit restrictions, so compared to a couple of years ago, more people are qualifying for financing now."