The number of households in America without a vehicle has doubled over the past two decades, with 9.3 percent of American households going carless last year.
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Sales of new vehicles hit a record last year with over 82 million units being sold according to a report by the International Organization of Motor Vehicle Manufacturers (OICA).
For the last four years, new car prices have risen quickly as the U.S. comes out of its recent recession. But a new report shows that new car prices are beginning to level off now that automakers have been disciplined about their discounts and sales incentives.
It’s that confusing time of the year for all auto buyers, when dealerships have a nice mix of current model year vehicles and next year’s model year vehicles sitting on the lot, available for sale.
Job security in the automotive industry has been questionable for many workers, though in last two years, things have begun to turn around, and now auto companies are hiring once again.
Hyundai’s combination of style and fuel economy appears to be paying off at the dealership level with the record sales allowing the Korean automaker to move past long standing industry top sellers. In fact, as of June, Hyundai has moved past Ford to become the fourth best selling brand in America when it comes to retail car sales.
Car sales in China have, for much of the auto industry, helped companies weather the global economy’s struggles over the last couple years, but that demand boom might be over.
The average new vehicle sold in March in the United States reached an all-time high of $30,748, up from $28,771 a year earlier.
Even though average car prices are going up, buyer preferences may also be shifting in a non-traditional direction towards smaller and cheaper cars.
Sub-compact and compact car sales, for example, are growing in the U.S. and could largely be attributed to rising gas prices. Boosting the average price of a new car sold could also be the premium that hybrids and EVs are demanding. Regardless, automakers are well aware that buyers are looking at smaller cars and variants such as the upcoming Abarth 500 Convertible are coming to America to satisfy consumer demand.
“It’s not a blip. It’s a trend we’ve been seeing for months,” said Jesse Toprak, TrueCar’s chief automotive analyst. “This might seem counter-intuitive at a time you might expect to see people buying cheaper cars because fuel costs are rising so fast.”
According to data in the report, nearly one in four cars sold in March were in the small car category, compared to December when barely one in six vehicles sold was a small car.
Another contribution to the rising average price of a new car sold is the fact that buyers are willing to add all the available options and upgrades since they plan on keeping their vehicle longer. Buyers are now holding onto their vehicles for an average of 57 months.
Finally, supply and demand are on a more even level now that many automakers have cut production in order to save costs. When automakers had more vehicles sitting on the lots, they were more likely to offer big incentives and discounts to sell cars. Now there is even a shortage of certain models which allows dealerships and to charge markups.
[Source: The Detroit Bureau]
At one point, Japan was among the world’s leading auto markets but the country has yet to regain its stride after last year’s devastating earthquake and tsunami. Japanese auto sales dropped to half the peak rate and a recovery has yet to take hold.
Global information company IHS Automotive conducted a study that shows sales in India will reach 4.88 million by 2016, taking the emerging nation ahead of Japan’s projected 4.51 million units in sales for that year. What’s more, IHS believes sales in Japan would taper off to 4.25 million by 2020.
At one point, Japan was ranked as one of the world’s top three largest regional markets, behind the United States and Europe. China has since rocketed past the rest of the world, claiming the global top ranking several years ago. Reports reveal that Chinese consumers have purchased 17.66 million vehicles for 2011. IHS predicts that China sales could even pass 30 million by the decade’s end.
The organization believes that India is positioned to be the next country to experience a big automotive boom, linking to a prediction that India’s population will sustain rapid growth in the coming decades.
That said, India’s economy is not as strong as China’s and it will also take a while for India to develop infrastructure that could handle a rapid spike in vehicles on the road. Some villages can only be reached by mules and donkeys and big cities suffer incredible traffic congestion due to the lack of major roadways.
Nonetheless, demand for automobiles in India is surging and may become the next focus market for global automakers.
[Source: Detroit Bureau]
There may still be two months to go, but General Motors is all but certain to reclaim the title of World’s Largest Automaker for 2011. GM last held claim to producing the most vehicles back in 2007, and for the 76 years before that, before being ousted by Toyota in 2008. Toyota has since retained that position for two more years, with Volkswagen emerging onto the scene to be a major player.
In fact, success by VW and GM, along with faltering sales by Toyota (with a number of factors including this year’s earthquake and tsunami) will mean Volkswagen will most likely finish second, with Toyota slipping to third.
So far this year, GM’s sales total 6.79 million, a million ahead of Toyota’s 5.77 million units, with VW selling 6.17 million units.
Further down the list in fourth place is the combined totals of Nissan and Renault with 4.93 units, while the growing Korean juggernaut of Hyundai and Kia has amassed 4.73 million. In sixth place is Ford at 4.27 million units.
In the past, unrestricted vehicle sales were only limited to cars built before the Cuban revolution of 1959, giving the streets of Cuba a unique backdrop of Chevrolet Bel Airs, Chrysler Imperials and Studebaker Commanders. Decades under Cuba’s communist regime had prevented its people from purchasing land or new automobiles but finally, a new law legalizing the sale and purchase of any model and any year of cars for all citizens will take effect this Sunday. Cubans will also be allowed ownership of more than one car.
The new laws are passed in hopes to shift a free-market reform, allowing citizens to perform some private enterprise and to rent out rooms or hire employees as well.
In accordance to the new law for vehicle purchases, cars that the state could once seize from Cubans who decide to emigrate can now be transferred to a relative or sold outright. Now, any transaction between a buyer and seller require both parties to pay a 4 percent tax. Moreover, the buyer must be able to show that the money used for the purchase was obtained legally. What this means is the buyers will go to a state-owned dealership to prove that the money used for the purchase of the vehicle was salary earned from an approved field. Money given to the buyer by relatives abroad do not apply.
While this makes it easier than the past, the number of citizens that can actually make enough money to take advantage of the law are wealthy doctors, sponsored athletes, and individuals that have traveled abroad and were eligible to import a car.
The latest trend driving auto sales growth is focusing on women from a diverse set of ethnicities. In studies done by R. L. Polk & Co., African-American, Asian and Hispanic women are making headway when it comes to making vehicle purchases for their families.
Polk’s findings show that vehicles purchased by these groups have increased 4.7 percent – 40.7% in 2006 to 45.4% in 2010. The studies the company conducted look at a five-year period (2006-2010) and their findings show that African American women have led the way since 2006. In fact, they are nearly on par with their male counterparts, constituting an average of 47.5% of the African-American community auto purchases.
Another interesting fact that the findings revealed was the auto purchases made by Asian women since 2008. Between 2006 and 2010, these women count for more than 14 percent of the Asian auto buys from their male peers. This puts them ahead of African American women, as they control 49 percent of the Asian light vehicle market. Coming in third is Hispanic women, with a current 41.6% share. Women who are not classified as non-African American, non-Asian or non-Hispanic Women gained two percentage points to bring them to a 36.9 percent share.
So what kinds of cars are these women buying? Find out the top five brands after the jump.