August 27, 2009

State Of The U.S. Auto Industry

Despite the recent headway that occurred as a result of the Cash for Clunkers program, the United States auto industry is still struggling. While this program saw a great deal of automobiles being sold, the best selling vehicle during this time was the Toyota Corolla. One reason for this might be that there are auto insurance discounts available for those who buy more fuel-efficient vehicles. Since Asian cars are historically more economical, it makes sense that people would want to buy them. However, this is only one auto industry issue that has impacted sales. Credit issues have made it much more difficult for people to get auto loans. This factor has created havoc among dealerships.

Another issue that we have recently seen in the auto industry is car dealerships footing the bill for the Cash for Clunkers program and then applying for reimbursement from the government. While this program was beneficial for auto manufacturers and consumers, it has been a headache for dealerships because they are still waiting on much of this money to be returned to them. The auto industry, unfortunately, is not strong enough to support these delays right now. For this reason, the government should quickly return this money to the dealerships so that they can afford to operate.

The auto industry bailout has been a hot topic because many American car companies were very close to bankruptcy. While the auto industry bailout cannot be called a failure or a success yet, many American manufacturers are still experiencing problems, as people are simply not looking for the vehicles that they have to offer. These auto industry issues are widespread, so more money will have to be put into research and development in order for American car companies to compete with their foreign counterparts long term.

The auto insurance industry is not driven by American auto sales, but rather by auto sales in general. The more vehicles there are on the road, the better off the auto insurance companies will be. Therefore, because sales are up overall, more people will likely be purchasing insurance. In addition, these new vehicles will be equipped with additional safety features that older vehicles do not have. New features will allow many consumers to enjoy discounted rates on their auto insurance policies. The auto industry can be tricky to gauge because there are so many variables present. However, the bottom line is that more vehicles sold mean more success for both the economy and the auto insurance industry.