For many years the auto industry in the United States has impacted millions of households in more ways than one. Anyone could look at the number of vehicles sold and assume that the economy was healthy. However, during the 2007 to 2008 recession, everything changed. Sales on cars saw a precipitous decline, which reflected the general reduction in consumer spending. Yes, Ford Motor always has a billion dollar cash reserve for economic disruptions. General Motors and Chrysler though were faced with bankruptcy decisions and so the U.S. government had to step in to bail out these auto industry manufacturers.
However, come February 2012, the auto industry started to recover and General Motors in addition to Chrysler had to pay back the bailout money given to them by the government during the recession. By that time, the auto industry was making big profits again. As the economy flourished, more people were buying vehicles. In fact, it is documented that the biggest profits in the auto industry was made in 2012.
Growth and Development
The economy in the United States has seen a transformation in the auto industry due to the techniques and methods initiated by Henry Ford, founder of Ford Motor. He has put a stamp on the auto industry and made it a key contributor to America’s prosperity. The auto industry has created thousands of jobs and it keeps getting better as the industry is developing. The assembly line requires workers and Henry Ford’s part by part model created more jobs with its mass vehicle production.
Beyond the Fundamentals
In addition, machine tool makers financially benefited from the industry because the auto industry needed more parts and supplies for metal fixtures such as the chassis and engines. Beyond these fundamentals, every vehicle needed to have a battery, upholstery, head lights and paint job. So, new businesses were started to create these needed products and existing businesses also supplied what was needed. The auto industry continues to grow in increments each year.
As the auto industry transformed itself, insurance coverage is needed and so this created more new business for auto insurance companies as it did for auto dealers. Thousands of Americans were able to get jobs and start careers. Advertising agencies secured contracts with auto dealers and other industries to run their national ad campaigns for new car sales. Gasoline is necessary to run a vehicle so, yes, the petroleum industry also benefited from the comeback of the auto industry. Toll fees increased as a result of more cars on the road, whether the driver is going to work or just driving the highways to go elsewhere.
As the middle class moved to the suburbs, there was a need for reliable transportation. For that reason, the more people purchasing homes in the suburbs, the more vehicle purchases are being made. No one wants to be stuck in ‘la la land’ without transportation.
The Bottom Line
It is safe to say, then, that even though, the auto industry lost during the economy times, there is certainly a transformation, which seems to be progressive as America moves forward. People will always be buying vehicles in safer economic periods.