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Auto sales could break record this year
By Kalea Hall
YOUNGSTOWN
Greg Greenwood of Greenwood Chevrolet is a little surprised to see the continued growth of U.S. auto sales.
He remembers the recession when sales were way down – at 10.4 million in 2009, according to Kelley Blue Book.
Since then, however, sales have grown an average of a million a year.
Now, sales are expected to hit 17.4 million, if not more, which would break the record of 17.35 million in 2000.
“Auto sales were red hot” this year, Greenwood said.
Sales for Greenwood have been good, but the Austintown dealership has had better years. Overall, Greenwood is pleased with his sales.
He considers the consistent growth to be exciting and positive for the local and national economy.
“It’s a great economic indicator,” Greenwood said. “I have always had this little grin when selling cars because I realize I am a part of this intricate web.”
The intricate web includes the about 4,500 workers down the street from Greenwood’s dealership at the General Motors Lordstown Assembly Plant, where the Chevrolet Cruze, a compact car, is built.
“It is one of the leading industries,” George Mokrzan, Huntington Bank economist, said of the auto industry. “It supports complementary industries as well. It is a driver of the economy.”
While the economy is impacted by the high volume of auto sales, the economy also impacts auto sales, analysts say.
Continued job growth, incomes on the rise and the current credit environment all have benefited the industry.
The growth in the past six years also is attributed to pent-up demand. People replace their older cars, and they have had the economic means to buy new ones.
Also, leasing has made a comeback, which helped sales. When the recession hit, many manufacturers stopped leasing altogether. By 2012, leasing had picked back up, KBB analyst Tim Fleming said.
“Sales keep exceeding our expectations,” Fleming said. “Even we are surprised.”
Last year, KBB analysts estimated there would be 16.9 million sales in 2015. As the sales grew this year, beating their expectations, analysts upped their initial figures.
What also changed is the segment with the expected highest amount of sales. Typically, the small or midsize-car segments lead in sales volume, but this year the compact sport utility vehicle segment is expected to take the cake. This segment has seen growth of more than 19 percent year over year while nonluxury cars are down 3 percent.
Analysts at KBB, like dealers and economists, expect the momentum to continue into next year for the auto industry.
“We still think that sales will remain strong, and even if they take a dip, there’s nothing that says they will fall off of a cliff,” Fleming said.
Steve Bott, sales manager at Mark Thomas Ford in Cortland, says with good programs and good product the momentum should continue.
“If the economy continues to go the way it is, I don’t see us stepping backward,” Bott said. “The more you continue to adapt and change, the more people want to come and see what you have out there.”