After a long gap, consumers in the US seem ready to return to car showrooms for buying new cars, according to experts, though their numbers are definitely lower than observed in earlier years.
If new American car sales picks up in the months to come, it would be a welcome development for the automobile industry of the country. An awful recession has wiped out sales to below 10 million vehicles per year - a decline of over 40 percent from earlier years - and assisted in compelling Chrysler LLC and General Motors Corp. to file for bankruptcy protection under Chapter 11.
However, sales data for May appeared to confirm that the US car market was bottoming out. Ford Motor Co., on Tuesday, reported a decline of 24 percent in US sales for the month of May, but sales had increased 20 percent from April. GM’s sales for May dropped 30 percent from a year back, but had risen 11 percent from April.
“We’re off the bottom,” stated Ken Elias, an auto industry analyst and partner with Maryann Keller & Associates, based in Scottsdale, Arizona. “People will want new cars because many have deferred purchasing a car since last fall. We think it’s positive for U.S. automakers.”
Without a doubt, consumers still confront powerful economic forces that could subdue new car purchases, including soaring joblessness, increasing home foreclosures, and continued frugality amongst banks as well as other financial institutions about lending money.
That aside, experts are hopeful about improved new car sales in the near future. They point out:
> Restored confidence of consumers in the economy.
> Indications that the economy as a whole might be bottoming out.
> The spurt in stock markets recently.
> More willingness by banks and also other financial institutions to lend money to consumers.
> Repressed demand for new car purchases.
> Car dealers, who are threatened with business closures, are offering fire-sale prices.
“There are more people looking at and seriously researching new car purchases,” according to Karl Brauer, editor in chief with Edmunds.com, the Web site that provides information on cars. “There’s a sense among a lot of people that we’ve hit bottom and the economy will be coming back.”
Renewed interest in buying will possibly swing in slowly and shoppers will probably prefer smaller vehicles than earlier on, particularly if prices of gasoline crawl back towards $4 per gallon.
Brauer observed that improved traffic on the Web site Edmunds.com is usually indicative of a rise in car sales 30 to 90 days into the future. Amongst other things, Brauer particularly called attention to the restored interest among consumers who are visiting the Edmunds.com site in order to get more information about purchasing a new car.
