‘Consumers were spoiled’ says chief economist of the Center for Automotive Research;
Posted on August 4, 2010
Filed Under Vehicle Ownership
The United States automobile market is not expected to be expanding any time soon. Cincinnati Ford used cars dealers among others are hoping that the automobile market picks up soon, but it is highly unlikely to happen for many reasons. The result of the slowdown of the market has been that many automakers such as Ford and GM have reduced their brands and model offerings and have been forced to lay off workers. The most layoffs occurred in 2009 with some of those jobs being offered back to employees. Volkswagen Peoria dealers and others have been experiencing slower sales due to the slow car market in the United States.
There are several domestic and foreign dealerships throughout the country that are still selling some vehicle brands like Honda and vehicle models in spite of the recession such as Honda Dealer Denver businesses and others. Sean McAliden said that automakers kept United States sales high for many years artificially with sales incentives. McAliden said that the auto industry is experiencing the popping of a bubble that built up between the years of 1997 and 2007. The U.S. sales of vehicles could go up to 12 million and stay there for many years. Some projections estimate that United States sales will not reach 15 million until 2014 at the earliest.
Vehicle inventories have been kept low as a result of the decreased sales and dealerships have adjusted for the lower sales. Consumers are not buying automobiles unless there are substantial sales incentives. McAliden said that “consumers were spoiled by years of ‘Keep America Rolling‘ incentive programs, and will not buy.” He went on to say that “We’re stuck at 12 million units.” For some automakers that may prove to be troublesome since North American automakers are currently operating at 60 percent production capacity even with all of the plant shutdowns over the past few years. There may still be some difficult decisions to make in upcoming years if the rate of vehicle sales remains this low, and time will tell how the market will adjust.
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