After a few years of decline, the worst of which brought on the federal government’s bailout of the US auto industry, vehicle sales are finally on the rise. It’s no boom, but it’s certainly an improvement. Amid signs that the economic recession may slowly be abating and with evidence that more Americans are finding ways to purchase cars, there could be hope for the auto industry yet. To put it succinctly, more people are buying more cars than they have in the last few years, and that’s a good sign. But why is this happening? Who’s buying these cars and what’s the impetus? It’s actually an amalgamation of events – all of which are encouraging – that is helping US automakers nudge their sales figures a little bit higher.

Americans bought 1.4 million cars and trucks in march, up 13 pecent from a year ago.

Reasons for the Turnaround

On average, American car owners drive vehicles that are 10.8 years old. That’s a new record, and it’s an indicator that fewer people are buying cars than in years past. Slower sales during the early part of the recession also meant that auto companies and parts manufacturers were hiring fewer workers, a reality that only contributed to higher-than-desirable unemployment and kept more clunkers on the road. But that seems to be changing, and there are a number of reasons why. For one thing, auto financing is more widely available now than at any time since the recession began, a sign that the economy is improving. What’s more, many Americans who were waiting for Japanese manufacturer inventories to improve after last year’s earthquake are starting to succumb to pent-up demand. There is more selection now than there was, and that means more people are finding reasons to buy.

Waiting out the Recession

Of course, the overall unemployment situation is the reason auto manufacturers have struggled these past few years. Now that the jobs situation is improving, more people are able to afford new cars – and that’s the primary driver for the increase in sales. True, the unemployment rate is decreasing very slowly. It will likely take years before the figure reaches a point most Americans are comfortable with. But if anything’s a sign of improvement, it’s that people are finally spending money. According to Ralph Flom, Analyst at, he is confident that US auto sales this year will surpass 14 million, up 13% from last year’s 12.8 million. March, in fact, was the industry’s bestselling month since the start of the 2008 recession. More money in more people’s pockets can only be good for the auto industry. As more Americans purchase vehicles, the average vehicle age will likely decline as well.

What they’re buying

If Americans’ car buying habits have changed since the booming mid-2000s, it’s the kind of cars they’re buying that may have changed the most. Instead of hunting for gas-guzzling SUVs with a “bigger is better” car-buying instinct, many buyers are opting for small cars. Fuel efficiency, it seems, has become one of the most sought-after features for cars of any kind. This shouldn’t come as a surprise. Given the price of gas these days, it’s easy to see why hybrid cars, plug-in electrics, and other high-efficiency vehicles are more attractive than in the past. Buyers looking into getting more from a tank of gas should be impressed the next time they head to an auto showroom. A greater selection of small SUVs, compacts, and even high-efficiency pickups is to be expected. The Chevrolet Volt, for instance, doubled its February sales numbers in March. The Volt is the most fuel-efficient hybrid car currently sold in the US.

The Chevrolet Volt plug-in hybrid electric vehicle is rated at 93 MPG

So, consumer demand for new vehicles never disappeared – it was simply delayed. And though gas prices continued to rise, making it harder to sell more of the kinds of cars Americans loved to buy back in 2006, consumers simply sought out ways to avoid paying too much more at the pump. Couple those realities with declining unemployment, and it paints a pretty rosy picture for vehicle makers. True, nobody is saying we’re back to the boom years, but that doesn’t mean the future isn’t promising.

If current trends continue, the auto industry will have a lot to smile about.

Stock Photography Images courtesy of  Ritu Manoj Jethani/