Automakers reported a strong February sales increase led by smaller cars due to rising oil prices. A wide range of automakers including Ford and Volkswagen reported double digit sales increases in the United States last month. General Motors reported a small sales gain as well. This is good news for the car industry as it continues its third year of sales growth after the downturn in 2008 nearly bankrupted the industry.
Car makers are beginning to use higher quality parts making cars last on average a record 10.8 years. In addition, credit is much more accessible which is bringing more people back into the market to buy a car.
A rising consumer confidence report last month give the likelihood that car sales will continue higher as consumers are now seeing positive effects of the recovery, making them consider purchasing big ticket items. So far it appears that 1.1 million cars and trucks were sold last month however, the number is not final yet. These rising sales and increased consumer sentiment has given analysts reason to increase forecasts. The latest prediction of car sales this year was recently revised to 14 million up from an earlier prediction of 13.8 million.
Chrysler reported probably the most impressive car sales figure for February which rose 40% from last year. The increase can be thanked mostly to an increase in popularity of its Fiat 500 small car. However, the Ram pickup also saw sales rise 21%.
Ford sales rose 14% due mostly to its smaller car, the Focus, which saw sales double. Like Dodge’s Ram, Ford’s F series pickups also saw a 26% increase in sales.
Volkswagen saw an impressive 42% in sales as its line of smaller cars performed very well last month.
Analysts said that the price of cars has risen slightly due to mostly increased features and higher quality parts. Yet, consumers did not mind paying the extra premium for a reliable vehicle that would last and save money on gas in the process. I think it is impressive, particularly with American automakers, how they were able to go from the verge of Chapter 11 to prosperity. I must say that it is a huge sigh of relief because not only would we have lost hundreds of thousands of jobs but we also would have lost three American icons. Luckily, they are putting more of an emphasis on smaller cars which is taking market share from foreign cars. Meanwhile, American autos already are dominating sales arena with its pickups and muscle cars.