Auto Sales Up, What Does It Mean For The Economy?
DALLAS (CBS 11 NEWS) – While waiting for an oil change, Gary Wood couldn’t resist a little new car window shopping. But, he’s not in the market: he’s already bought three new vehicles in the past three years!
“Raising taxes didn’t do anything,” says a laughing Wood, peering into new car windows at Huffines Dodge in Plano, “So just keep spending money!”
Wood’s new rides are part of a nationwide sales surge that’s given U.S. automakers their best performance in the past five years.
“Every year has been better than the previous year, since ’09,” says Ray Huffines, owner of Huffines Auto Group. “And now from ’09 to 2012, we’re up 64% in new car sales.”
And Huffines admits that rising consumer confidence has only helped encourage those healthy sales numbers.
“I think it says something about the economy and people’s feelings about the economy in North Texas,” says Huffines, “because they feel good about the future.”
Along with consumer confidence, hiring, new home sales and home prices are all enjoying increases. And economists say all of those factors encourage big ticket purchases. But, Aries Lollar says it’s his household economy that he has to watch.
“We’ve been putting it off for a while,” says Lollar, while eyeing a new Jeep for his wife. “We decided we’d go ahead and do it this year. We’ve already paid off all our vehicles, so, we’re at a point now, where we can take on a payment.”
Regardless of how often you find yourself in the market for a new set of wheels, experts say the impact of the industry on the nation’s economy is huge.
“One in ten jobs in the US is tied either directly or indirectly to the automobile industry, ” says Bernard Weinstein, PhD, an economist at SMU’s Cox School of Business. “Millions of people owe their livelihoods to this industry– be that through manufacturing, sales, services, or even insurance.”
But, manufacturing remains the most visible component and Arlington city officials say the General Motors plant there has had a “phenomenal” impact on the local economy. Andrea Ray with the city’s economic development department says the plant has invested a half billion dollars into the plant in the past 24 months. The company is retooling the facility to construct the next generation of SUVs. She says news of robust auto sales are always welcome. “Bottom line: a strong industry solidifies the plant’s existence here in Arlington,” says Ray.
“There’s a lot of ripple effect,” acknowledges Huffines. “It’s a huge economic generator and this year has been a very good year for the automobile business.”
And some experts say 2013 will be even better.
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