It's clear that 2009 was a tough year for the American automobile industry.
With companies laying off tens of thousands of workers, a nationwide credit freeze and a devastating 18 percent plunge in car sales, this has been the worst year in recent memory for the automotive industry. But as 2009 comes to a close, there are positive signs 2010 should be better than 2009, though challenges still lie ahead, including credit availability and continuing high unemployment.
It's hardly surprising that even the most optimistic dealers aren't expecting a full recovery to take hold until at least the second half of 2010. "It's going to be better than 2009," said Mike Shaw, owner of Mike Shaw Automotive in Denver, which sells Chevy and Saab vehicles. "It's not going to be Boomtown USA again. But it's probably going to pick up about 10 percent. Those who have survived and made it are going to sell more cars."
In its annual auto industry issue, HispanicBusiness Magazine interviews the owners of some of the nation's top Hispanic-owned auto dealerships, as well as some industry experts, to get their views on what it will take to kickstart the industry. Dealership owners say there is revolutionary change occurring in the industry and survival depends on adapting to a new business model. In one example of the shift, manufacturers are responding to the crisis not by freezing production, but unveiling new products. Credit markets are also loosening up to a degree, and the economy is showing signs of improvement.
Hot New Models
Th is year's new models include the long-awaited 2010 Buick LaCrosse, which General Motors hopes will both compete with luxury sedans and attract younger drivers to Buick. Also generating buzz is Chevy's 2010 Equinox, a crossover SUV that has improved fuel efficiency by 25 percent. And, flying in the face of current fuel-efficiency fashion, Ford in late 2008 unveiled its 2010 F150, the widest and most off -road worthy of the 150 series.
Some end-of-the-year results have been encouraging. In October, for instance, GM sales grew 4.7 percent — the company's fi rst monthly gain in two years. And Ford, which has enjoyed some consumer goodwill for neglecting to accept a bailout from the federal government, bumped up 3 percent. Chrysler, however, continued to struggle, reporting a 30 percent loss that month.
Nissan Motors Co. sales were up 5.6 percent in October, while Hyundai Motor Co., propelled by the popularity of the new fuel-efficient Elentra model, reported an impressive 49 percent jump. Toyota and Honda sales, for all practical purposes, were more or less fl at. In any case, regardless of the recent hopeful signs, the American auto industry is among the most challenged sectors of the recession.
After all, from 2007 to 2009, General Motors went from completing its 77th consecutive year of leading the world in auto sales to becoming majority-owned by taxpayers in the U.S. and Canada. Th us far, the most noteworthy bright spot for 2009 happened in July and August, when President Obama's cash-for-clunkers program allowed consumers to land huge rebates on new vehicles for trading in their gas-guzzlers. "It's the only true stimulus I've seen so far from the government," said Mario Murgado, CEO of Miami Automotive Inc., which sells vehicles made by General Motors and Honda.
But the benefits of the cash boom were quickly off set. Following August's 7.3 percent boost in auto sales was a disappointing 10.4 percent drop in September, though sales stabilized in October. Dealers say a true recovery will require more substantial improvements on two major fronts: unemployment and credit.
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