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Even with consumer confidence down 6.8 percent in June, the auto industry has held its own and appears to have been the driving force for national economic movement during the past 12 months.
According to a survey released Thursday by Auto Nation Inc., June saw overall retail auto sales surpass levels from the same month in 2011 by 38 percent.
Domestic car and truck sales increased 25 percent from the previous year, representing 4,217 vehicles purchased last month. Import sales shot up 56 percent for the year with 11,579 cars and trucks sold in June.
Reduced gasoline prices, along with attractive purchase incentives are credited as contributing factors to increase auto sales in 2012. Prices being reduced by an average of $500 per vehicle did not hurt either. With these factors, analysts contend that auto sales are on track to post their best year since 2007.
June’s year-to-date sales figures showing 14.1 million deliveries surpassed annual Auto Nation estimates of 13.9 million units sold through June.
When the economy took a downward turn in 2007, auto industry sales were listed at 16.1 million units. Consumers applied the brakes in 2008 and auto sales plunged to 13.2 million units, before they sank to a 27-year low of 10.4 million vehicles sold in 2009.
Of the major automakers reporting annual gains from June 2011 to June 2012, Toyota Motor Corp. posted a 60 percent increase, and led auto sales for the year with 177,795 units sold. The third largest automaker posted this improvement based primarily on U.S. sales following a year when Japan was beaten down by hurricanes and tsunamis.
Honda posted a 49 percent jump in sales for the year. Nissan was up 28 percent and the Infinity lead brand names with a 66 percent sales increase from June to June.
General Motors sales jumped 16 percent for the one year period. Chrysler sales went up 20 percent, and Ford pushed its way up 7 percent.
“We’re doing pretty good,” Dick Barker Lincoln Mazda President Sam deGeneres said. “It’s been sporadic based on availability, but mostly sales have been up. We are finally getting inventory that we have been lacking both in Lincoln and Mazda. So, things are on an upswing.”
The automotive industry accounts for 13 percent of all state government tax revenues and has played a significant role in bolstering the domestic economy, according to a study conducted by the Center of Automotive Research.
“This analysis furthers our understanding of how the automotive sector has a substantial impact on the U.S. economy by contributing to the fiscal stability of state and federal governments,” CAR Sustainability and Economic Development Strategies Director Kim Hill said. “As economic conditions continue to improve, auto companies could see an increase in sales and employment that would generate additional state and federal tax revenues.”
Beyond generating sales taxes when vehicles are purchased, government agencies collect taxes from a variety of sources. These sources include income taxes paid by employees working in the automotive sector, taxes and fees on fuels, registrations, and licenses paid by drivers and corporate income taxes and licensing fees paid by automotive companies themselves.
Some critics contend that auto sales look good only because consumers have stopped waiting to make new car purchases. They also argue that streamlining efforts following the auto industry buyouts in 2008, came with the closing of multiple dealerships and factories, prompting automakers to reconsider how they will attract new and returning customers.
General Motors CEO Jim Akerson said during a graduation address at Columbia University that the auto industry employs 8 million people, with 3.3 million jobs dependent on suppliers to the auto industry and another 1.5 million jobs dependent on dealers.
Akerson said the auto industry accounts for 1-in-17 private-sector jobs that create $500 billion in total compensation annually. They generate $70 billion in personal tax revenues annually, which represent 3 to 3.5 percent of this country’s gross domestic product.
In addition, 47 states have at least 10,000 auto-related jobs and in 20 states that jumps to 100,000 or more.
“Today, the industry is humming, producing outstanding vehicles in increasing numbers,” Akerson said.
Details on second quarter auto industry earnings are expected to be released on July 19.
Auto sales have driven the U.S. economy during the past year. June 2012 posted a 20 percent gain for premium luxury vehicle from the same month in 2011. Domestic auto sales were up 25 percent for the year, and imports posted a 56 percent boost in sales during the past 12 months.
