After a few sluggish years across many industries, strong auto sales are helping to lead a comeback in retail. Companies selling cars were not the only entities to see an increase over the past few months, but vehicle sales account for a large percentage of the economic gain in many locations.
According to numbers published by LMC Automotive and J.D. Power, June 2013 auto sales are projected to be over 1.1 million units. That projection is an increase from May, which was also a strong month for retail nationwide. Although premium vehicle sales are slightly down from the same time last year, the average sale price of new vehicles in June 2013 is, so far, breaking records for June auto sales. On average, customers are paying around $29,000 for a new car, a price that is helping to bolster retail markets.
National auto sales are being driven by success at the local level. Over the first two quarters of 2013, numerous local news outlets have carried stories about success in local vehicle markets. From 2008 through 2010, approximately a dozen dealerships in Southern California's San Bernardino and Riverside counties closed due to poor sales and a recessed economy. A rebound in vehicle sales in the area has allowed the remaining dealerships to benefit from recent success; two companies recently committed to building new sites in the area. One of those dealerships is opening a Mercedes dealership in Riverside; that site will be the first lot selling the luxury vehicle brand in the area. Many other cities are reporting the same trend in auto sales; Houston, TX, saw a year-over-year increase in auto sales of 5 percent for May 2013.
The increase in auto sales during the first half of 2013 continues a trend that began in 2009. According to Edmunds, auto sales dropped steadily from 2005 through 2009; however, from 2009 to 2013, the industry managed to recover a lot of lost ground and is about 2.5 million units per year away from pre-2005 numbers.
A continuing upward trend in auto sales is a good sign for all types of retailers. Obviously, it's good news for those selling cars, but related businesses benefit when consumers buy a new vehicle. Parts manufacturers, retailers specializing in accessories, and custom shops are just some businesses that benefit directly from additional car sales. Increased auto sales also pumps more money into local economies, indirectly increasing retail and service sales of all types.
The numbers are in, and retail is definitely staging a comeback. Auto sales are at the forefront of recent increases and seem to indicate that consumers are more confident in the economy. Businesses in all niches are watching the trends, hoping to see a continued slope in the upward direction over the coming months.
(Photo courtesy of David Castillo Dominici / freedigitalphotos.net)
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