What Are Auto Sales?
In finance, commentators use the term "auto sales" to refer to the number of cars sold in the United States. Occasionally, the term will also be used to refer to the sale of light trucks.
Automobile manufacturers report their sales at the beginning of each month, which the U.S. Department of Commerce then reports on an annualized basis. Both sets of numbers are closely watched by market participants, as auto sales are seen as an important indicator of economic health.
Key Takeaways
- Auto sales refer to the number of cars and light trucks sold in the U.S.
- This statistic is closely watched by economists and investors since the automotive industry is a significant component of the U.S. economy.
- The automotive industry is also an important part of the global economy as most manufacturers sell globally.
Understanding Auto Sales
The automotive industry is an important part of the U.S. economy, representing about 3% to 3.5% of the U.S. Gross Domestic Product (GDP). This consists not just of vehicle manufacturers, but also dealerships, parts suppliers, and related businesses.
Given its size, it is not surprising that auto sales data is closely monitored by investors and policymakers. Indeed, the U.S. Commerce Department’s monthly report on auto sales is one of the drivers used in the government's quarterly updates to GDP. The Bureau of Transportation Statistics also provides auto information, such as retail sales of new cars by sector.
The auto industry encompasses not just the large automotive manufacturers, but repair shops, supply companies, metal companies, and more, having a meaningful and wide impact on the U.S. economy.
U.S. Auto Industry
The American automobile industry has long been dominated by the "big three" of General Motors, Ford, and Chrysler (now part of Stellantis); although now, Elon Musk has helped build Tesla into a new and powerful player in the market.
Japanese car manufacturers are also formidable competitors, having made deep inroads into the U.S. market following the 1973 oil embargo by the Organization of the Petroleum Exporting Countries (OPEC). This embargo caused oil prices to jump from $3 to $12 per barrel, increasing consumer demand for smaller and more energy-efficient cars made by Toyota, Honda, and Nissan.
In 1982, Honda became the first Japanese manufacturer to open a production plant in the U.S. Toyota and Nissan soon followed, and by 2014, 70% of Japanese companies’ vehicles sold in the U.S. were built at these plants.
Another major milestone in the history of the U.S. auto industry occurred in the fall of 2008, following the sudden collapse of the financial firm Lehman Brothers. This event caused shockwaves throughout the financial markets and led to a credit crunch. In the midst of this crisis, it became clear that General Motors and Chrysler were both on the verge of bankruptcy, while Ford was struggling to maintain its solvency.
Although Ford managed to survive on its own, the government was forced to bail out General Motors and Chrysler using taxpayer funds of $80 billion. In Jan. 2014, Chrysler was purchased by the Italian firm Fiat Automobiles. Fiat Chrysler is now owned by Stellantis.
U.S. Auto Sales
The economic turmoil that followed the financial recession in 2009 was reflected in the auto sales statistics from that time. Between Aug. 2007 and Feb. 2009, U.S. annual auto sales plunged from 16.4 million to 9.2 million in 2009, the lowest annual figure in 30 years.
Auto sales gradually returned to their pre-crisis levels, surpassing 17 million in 2015; however, car sales took another hit in the wake of the COVID-19 pandemic, dropping from 17 million in Feb. 2020 to 8.8 million in April 2020, before rebounding again, hitting 18.5 million in April 2021.
The following inflationary environment then negatively impacted auto sales. Auto sales dropped to 12.7 million in Sept. 2021, before beginning to climb again. As of Sept. 2023, auto sales were 16.2 million.
Who Is the Largest Autoseller?
The largest car manufacturer by revenues in 2022 was Volkswagen followed by Toyota. The largest American manufacturer was Ford.
What Are the Total Vehicle Sales in the U.S.?
As of Sept. 2023, total vehicle sales in the U.S. are 16.2 million.
How Much Does the Automotive Industry Contribute to the Global Economy?
The automotive industry contributes approximately 3% to the global economy. For car manufacturing regions that employ a higher number of auto professionals, the number is higher.
The Bottom Line
Given its large size, the many different types of companies it includes, and the many jobs it employs, the U.S. auto industry is one of the most prominent and important to the health of the economy. Auto sales show how many automobiles people are buying and reflect the health of the economy.
