Rebounding Auto Industry Should Give Boost To Auto Show
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CHICAGO (CBS) – As the Chicago Auto Show begins rolling into town, there are signs that an industry on a bumpy road might finally be turning a corner.
CBS 2’s Vince Gerasole reports on a positive sign for the economy.
From the fast and the furious, to the sporty and fuel efficient, there is a different, upbeat buzz motoring through this year’s Chicago Auto show.
“People are conscious about money. They’re spending it wisely,” said Auto Show co-chair Michael Ettelson.
Ettelson said he sees evidence of the 10 percent rise in U.S. auto sales every day at his Chicago area dealerships.
Last year, 12.7 million cars were sold in the U.S., and the industry expects to reach nearly 14 million car sales in 2012.
“We see more people happy to buy a car, not because they have to, but because they want to,” Ettelson said.
Away from the show floor, manufacturers who lived through 2009’s deadly drop in sales were again stepping up production. With sales of the Ford Explorer up 60 percent, Chicago’s Torrence Avenue Ford plant is adding another 1,200 employees.
“We made a concerted effort to restructure our business, resize our business, and match our production to the natural demand in the marketplace,” Hau Thai-Tang, executive director of Ford Motors said.
Hyundai CEO John Krafcik said, “Almost every car maker made money, a lot of money, in 2011.”
Krafcik said, with the average age of the U.S. car right now at 11, there is pent-up demand for new cars.
“That’s the primary reason right now that the industry expects some growth in 2012, is people have held onto their cars for so long,” he said.
But to create fuel-efficient cars that last longer, the average cost of a vehicle has now risen to some $30,000.
“The industry made some tough choices,” Krafcik said. “Prices are higher now for cars for consumers, and that’s not necessarily good for the viewers,” Krafcik said.
The road to recovery for U.S. automakers will be a slow one. Even if auto sales do reach 14 million in the U.S. this year, that would be well below the 15 to 17 million annual car sales in the years leding up to the 2008 recession and analysts don’t expect to reach that level anytime soon.