The numbers are in, and 2012 was a record year for many auto manufacturers. Auto sales reached 14.5 million units in 2012, up 13.4% over 2011. What's more? Sales are expected to increase another 6.6% in 2013, reaching 15.4 million.
So what's going on? Since auto sales topped out at 17.5 million units in 2005, the world has gone through a recession and Detroit has successfully navigated bankruptcy. To put it simply: the U.S. economy is recovering. GDP is up, consumer confidence is up, house prices are increasing, and unemployment is down.
With more people going back to work and earning more money, they're finding that their old clunker just isn't cutting it any more. Since sales dried up during the recession, the average age of a car on U.S. roads has reached 11 years. Add on the fact that auto manufacturers are introducing 43 new vehicles in the U.S. in 2013 and you end up with a recipe for renewed excitement in an industry that has suffered more than most over the past four years.
Building on gains in 2013, sales are expected to reach approximately 16 million in 2014 before leveling off. These optimistic multi-year projections are based on pleasantly surprising consumer excitement at the end of 2012 as well as a broader bullish hope for the U.S. economy in the years to come. Although economic growth overall remains below pre-recession levels and hyper-partisanship in Washington has not inspired much faith, Americans have decided that it is time to shake the recession off and get back to living the American dream.