Fall 2016 issue of Horizons
TRANSPORTATION & DEALERSHIPS
increase in domestic and international production.
Automobile Sales Drive Economic Growth Drivers in the United States purchased more cars in 2015 than ever before, a staggering turnaround for an auto industry that was woefully struggling six years ago. Lower gas prices and a strengthening economy marked an excellent year on American roads. It’s been a remarkably rapid turnaround for the industry, which saw sales sink in 2009 to a near 30-year low along with bankruptcies at GM and Chrysler. In 2009, colossal job losses and rigid credit standards sent car sales plunging to only 10.4 million. At the time, numerous professionals thought it would take a decade or more to rebound to annual sales of 17 million vehicles. The final count for vehicles sold in 2015, according to AutoNews , was 17.5 million vehicles sold, a 6.0% increase from the 16.52 million sold in 2014 and a welcome change from the decline in 2009. The most important economic indicators for the automotive sector are interest rates, the unemployment rate, consumer confidence and the global economy. Auto sales are the single most important indicator for the automotive sector. More auto sales lead to increased earnings for automakers, which then impacts auto part makers. Auto sales also drive an increase in aftermarket products, all of which impact the bottom line for individual dealers. Noticeably, unemployment is a major factor in this environment. People without jobs are less likely to have the means to afford a car. Additionally, someone with a job but is worried about losing it, is not likely to make a major purchase like a new vehicle.
According to the American Trucking Association, trucking companies are accounting for 8 1.0 % of the revenue in the shipping sector.
A major incentive for companies to consider self-driving trucks is the accident prevention systems that are installed in these tractors. A study by the National Highway Traffic Safety Administration found that there were no front- end crashes reported when more than 100 drivers drove a tractor equipped with a crash avoidance system on their normal delivery routes covering a total of 3 million miles. Will the Growth Continue? While the first half of 2016 was a bit down for the transportation industry, many experts expect it to pick up in the near future. Economists with the ATA are predicting that trucking industry revenues will rise to $1.52 trillion by 2026. On December 4, 2015 the Fixing America’s Surface Transportation (FAST) Act was signed by President Obama, which provides optimism for future growth in the transportation industry. The FAST Act approved a much needed $305 billion in spending over the next five years for highway infrastructure, highway and motor vehicle safety, motor carrier safety, hazardous materials safety, public transportation, rail, technology and research programs. In order for the industry to sustain the expected growth, it will need full support from the government to improve the current infrastructure, a qualified and full workforce, improved technology and a continuous
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