When all is said and done, car-makers could report total US 2014 sales of around 17 million new vehicles.
With month after month of solid sales, we might have gotten a bit jaded by all this good news.
But it’s work remembering that it’s taken years for the industry to work its way back to its pre-recessionary highs.
The chart above shows exactly what happened, in vivid yet straightforward detail.
Here’s how things went in the US:
•Prior to the downturn, new car sales were relatively strong
•When the recession hit, sales cratered, at one point falling below a 10 million yearly sales pace. That’s not enough sales to support all the automakers who want to do business in the US market — the world’s most dynamic.
•Cash for Clunkers, a government-funded program that offered consumers money to scrap an old gas-guzzler for a more fuel-efficient vehicle, restored some life — briefly — to the market in 2010.
•From the end of 2010 to the end of 2o14, car sales in the US struggled slowly back to pre-recessionary levels. Along the way, some market observers argued that sales would plateau at around 15 million, but that number was passed with ease this year.
Two key takeaways from this period of time:
1. The US auto market was devastated by the Great Recession — both Chrysler and General Motors fell into bankruptcy, Ford saw its share price drop below $US2 a share at one point, and other automakers endured a world of hurt in a market that had been very, very good to them.
2. Car-makers know this could happen again (although it’s unlikely any time in the immediate future). As a result, the re-built GM, for example, is designed to break even at a 10-million annual sales pace. The profound trauma of the 2009-2010 period provoked change.
Here’s why 2014 was one of the most important years in the the history of the auto industry — maybe the most important year: because it proved that the US market, as it has evolved, could recover from a massive hit. There were good reasons to expect that it couldn’t, at least not fully.
But 2014 has put those concerns to rest.
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