American Automobile Sales are Up in 2016 – What That Really Means

The automotive industry in America is huge, with more people traveling by car than any other mode of transport.  In 2016, automotive sales are growing at the fastest pace since 2000.  Most companies are beating their sales expectations and automakers posted a 6.9% sales increase in February, compared with a year earlier.   While these numbers are positive, they are not sharing the full story on the state of the American automotive industry.

While sales numbers are up, North American production is only up 4% on the year.  Production is being supplemented by imports coming in from Europe and Japan.  This hurts the idea that an increase in sales means an increase in the production of vehicles by American automotive companies.   Also contributing to the high sales numbers are the large number of SUVs that are being purchased as opposed to smaller sedans.  SUVs are hugely profitable for automotive companies compared to smaller sedans.  Sales numbers are also up in 2016 due to lower price of gas.  As gas prices keep dropping across the nation, automobiles become more affordable for the average American, but this could change if gas prices begin to rise again.

Though the numbers for automobile sales have been positive in 2016, there have also been a few news stories that have the potential to tarnish this good news.  Volkswagen is still dealing with the fallout of its diesel emissions scandal, and other diesel car companies are having their emissions numbers scrutinized as well.  Testing is becoming stricter as the European Commission works to make sure small diesel car models are not producing more pollution than allowed.  Also, Fiat Chrysler is facing a lawsuit from auto dealerships alleging that its U.S. unit was offering money to falsify sales.  These stories are contributing to the idea that those American automobile sales may not be as healthy as they look.

As a manufacturer of rubber molded parts, rubber extruded parts and plastic extruded parts, UP&R works with many different industries including the automotive industry.  Take a look at our website for all our products and services.