Friday, March 9, 2012

Booming US Car Sales, CAFE Standards, & Detroit At Half-time

Historically skyrocketing gas prices meant a loss of market share for the Big Three Detroit automakers to Japanese and other companies.  Why?  The Big Three simply did not make attractive, competitive fuel efficient cars so they lost market share when consumer preferences shifted to gas sippers and away from gas guzzlers.

In another sign that US carmakers are more competitive, despite the current jump of gas prices to a national average of $3.74, Detroit sold more cars in February than anytime since the collapse of the car market, following the 2008 economic meltdown.

Chrysler issued a statement: "Our product portfolio now contains some of the most fuel efficient vehicles in our company's history.  A few years ago, higher fuel prices were a major threat to our total vehicle sales, whereas today, those higher prices have become far less of an issue."

Chrysler's February 2012 sales were 40% greater than in February 2011.  While the companies themselves are responsible for building attractive cars that are selling well, raising the fuel efficiency standard for cars in 2009 helped to change how Detroit looked at the fuel efficient car segment of the    
market and to prepare them for the era of high cost gasoline.

The February 2012 sales reached an annual rate of 15 million vehicles if sustained over a full year.  After the US auto market collapsed from 16 million vehicles to an annual sales rate of 9 million vehicles after the economic collapse of 2008, it may be even past half-time in Detroit.

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