Auto Industry's Roaring Comeback is Highlight of 2012

Auto Industry's Roaring Comeback is Highlight of 2012Detroit’s comeback became a central issue in the presidential campaign, as oil prices surged and 40 miles-to-the-gallon became a new de facto standard.
It was a remarkable year for the auto industry.
Auto sales continued to roar back as auto loans became easier to obtain, pushing back the average loan length to 64 months.
The average transaction price for all vehicles — what consumers paid for a new car at dealerships — hit a record $30,700 in March, according to TrueCar.com. It still a little above $30,000.
Here’s the top ten auto industry stories of 2012, according to USA Today:
1. The auto industry’s comeback. Auto sales roared back to their highest level since 2007. The auto industry is projected to sell 14.5 million new vehicles this year, according to analyst Brian Johnson of Barclays in a note to investors. That represents a 13.5 percent increase from last year. Emerging from a bottom set during the recession in 2009, when sales were at 10.4 million. The industry has a shot at getting back to 16 million in 2013, which would close to match the prosperity of the early 2000s.
2. The presidential campaign features the auto industry as a central issue. President Obama’s strategy of bailing out  General Motors and Chrysler at the height of the financial crisis played a big part in his re-election victory over former Massachusetts governor Mitt Romney.
Obama boasted that the bailout saved the industry along the Rust Belt, especially Michigan and northern Ohio, where Detroit automakers have unionized factories. Romney, who was born in Detroit to a former Michigan governor, was haunted by a 2008 op-ed he wrote for The New York Times headlined, “Let Detroit Go Bankrupt.”
3. Hybrids hit the mainstream. Hybrids have grown into the mainstream with bigger sales projected for next year. A 2013 Toyota Camry hybrid averages 41 miles a gallon. The Ford Fusion hybrid is rated at 47 mpg, not far off the 50 mpg of a 2013 Prius the Environmental Protection Agency is reviewing that Fusion figure). Hybrids will grow in production as automakers need to meet a new corporate average gas mileage of 35.5 mpg by 2016.
4. Ford’s CEO. Alan Mulally, took the helm at Ford coming from Boeing in 2006. He led Ford through the recession and avoided the bankruptcy reorganizations that plagued both General Motors and Chrysler.
5. Forty miles a gallon? Automakers in 2012 had to deal with a consumer appetite for better mileage as gas prices climbed again. Hyundai found big marketing hook with its new Elantra compact getting 40 miles a gallon in highway driving. Competitors were faced with a new standard that was easy for consumers to remember. Honda came up with special editions of the Civic, Ford with the Focus and Chevrolet with the Cruze. However, Hyundai had to revise its gas-mileage figures on several models and lost the ability to claim 40 mpg after a U.S. government review of its 40-mpg claim.
6. Recalls. The numbers didn’t surpass that of 2011, but recalls can hurt an automaker’s brand and its bottom dollar. Ford recalled 89,153 Fusion sedans and Escape crossovers earlier this month because of an overheating issue that could lead to fires. The problem could be fixed with a software update.
7. Toyota and Honda resurrected. Both automakers saw their sales hit hard by the March 2011 earthquake and tsunami in Japan, then flooding in Thailand. This year, sales surged in the U.S. Toyota sold 28.8 percent more vehicles through November of this year, compared with the same period a year ago, Autodata says. Honda’s gain was 23.8 percent.
8. Design’s “slippery slope.” Borrowing styling cues from Jaguar and Audi, mainstream automakers ran with the gently sloping roofline, like that of a fastback, which provides a racy look to an otherwise normal-looking coupe. The new Chevrolet Impala gets that styling, and so does the Toyota Avalon and the Mazda6. The slope is a styling winner, but not always practical. It can eat into rear-seat headroom and make the trunk appear smaller.
9. Michigan becomes a right-to-work state. The number of Michigan workers represented by a union fell from 27 percent in 1990 to 18 percent in 2011, the Detroit Free Press reports. Union influence has declined as Detroit automakers shut down plants while foreign makers, both European and Asian, opened non-union plants mostly in the South. Unions vow to put Michigan firmly back in the union column.
10. Goodbye “Government Motors.” The Treasury Department announced earlier this month that it will sell all of its remaining 500 million shares of General Motors in the next 12 to 15 months, ending the $49.5 billion bailout that kept the nation’s largest automaker alive.

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