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US Automobile Industry Sales Recovered on Low Fuel Prices
Jun 20, 2009

Low fuel prices and higher consumer confidence helped the troubled US auto industry to recover from slackening sales in May 2009.

According to industry data, the US auto industry sales seemed to have stabilized in May 2009, indicating to the recovery of the battered industry following filing for bankruptcy by Chrysler, as reported by AFP.

As per the figures released by Autodata, the total auto sales in the US tumbled 33.7% to 925,824 Units in May 2009 against the same month a year ago. However, auto manufactures were satisfied with the improvement of seasonally adjusted annualized rate at 9.91 Million, the best performance of the industry in the current year. 

Although the company filed for bankruptcy, Chrysler revealed that it had managed to increase sales in May 2009 compared to other months of this year.

Auto sales in the US soared during May 2009 on account of fire sale prices that encouraged Americans to buy more cars, resulting in above expectation sales by Chrysler despite its announcement of bankruptcy.

Higher consumer sentiments also gave impetus to the battered retail vehicle sales in May 2009 over the preceding month (April 2009). Customer walk-ins in car showrooms gradually improved indicating to the stabilization of the auto industry. 

Moreover, the downfall in oil prices took the sales of bigger vehicles up but small cars continued to fill up the inventories of dealers. If the demand for fuel-efficient vehicles drops further, the Obama administration could face a big problem because it has been forcing auto manufacturers to produce more low-energy consuming vehicles.

In their monthly reports, all the major auto manufacturers believe that the economic crisis is gradually waning off and auto sales are recovering to higher level.

According to a Research Analyst at RNCOS, “With improving consumer confidence that plays a critical role in auto sales, the US auto industry moved towards stabilization in May 2009. Auto manufacturers have been waiting for this good news and the benefits have already started to appear in sales. Given the enormous changes in recent few months, it becomes important to find out what the American automobile industry has achieved.”

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