The economy is not what it used to be, and most people are feeling the grasp of higher prices, increased interest rates, and lowered incomes. All of the downward trends in the economy has lead to the slowing of the automobile industry in recent years. Since 2008, the automobile industry has faced serious cut-backs, to the point that many companies required government help to remain in business.
A few years ago, many U.S. automobile companies were facing bankruptcy. A few companies, such as Saturn and Pontiac, actually went bankrupt and were absorbed by other vehicle manufacturers. To prevent this from happening to many more companies, which could have shut down much of the industry in the Mid West, the government infused the automotive industry with several billion dollars worth of stimulants. This helped many car manufacturers remain on their feet throughout the most difficult time of the economy.
However, the stimulus was not enough to bring the auto industry back to what it once was. Many people stopped purchasing new vehicles due to job losses and income cut-backs in their own workplaces. Banks were unable to hand out loans to all but the most-qualified people, which also prevented many people from purchasing the vehicles that they wished to own. This forced many factories and companies to make significant cutbacks, firing many workers and even closing a large number of factories.
In response to the lowered demand for vehicles, vehicle manufacturers searched desperately for ways to increase car purchases. The rising cost of gas made the desire for fuel-efficient vehicles much higher than in the past. Many manufacturers started manufacturing fuel-efficient vehicles in hopes of attracting customers who needed to save on the cost of gas. Many vehicle companies saw an increase in business due to this move.
Other vehicle manufacturers decided to lower the overall costs of vehicles and create a budget line of vehicles to help those in need. Many manufacturers created a low-end model of their vehicles which cost thousands less than other models. This helped families strapped for cash to still be able to afford a new vehicle when necessary. One company who did this was Ford, who altered Mustang Accessories from previous models in order to hit certain price points for a wider range of customers.
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All of these steps have helped improve the automotive industry and bring some life back into the industry. Many vehicle manufacturers are seeing sales rise by up to 80 percent over past years. However, even though the business is increasing, it has not reached the level that it was before the economic downturn. It seems that today’s shoppers are more wary of making large purchases like a new vehicle and would rather invest their money in other areas of life. Incomes are still low, and unemployment is still high, although that is improving as well. It will still take quite some time and effort to help the automotive industry return to the glory days of the past.
Although some of these problems are in the past, the economy is in no way fully recovered. Until more people see higher incomes and a more stable economy, it is unlikely that the vehicle industry will ever return to what it once was. Today’s vehicle buyers are more interested in purchasing vehicles that will last long, provide a high fuel-efficiency, and remain reliable throughout the use of the vehicle. Fewer people are purchasing vehicles just for fun these days, and more are hanging onto their vehicles for 6 years or more, simply to maximize the investment in the vehicle. Although the automotive industry will likely never be like it was before, with continued improvement, the new feature of automotive success will arrive within the next few years.