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U.S. Auto Sales Are Up While European Sales Hit a 20-Year Low

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On: Thu, Jun 20, 2013 at 12:18PM | By: Elizabeth Puckett


U.S. Auto Sales Are Up While European Sales Hit a 20-Year Low

May was host to two very different auto industry scenarios between the United States and Europe. On our side of the pond, the auto industry saw a big gain as sales rose strongly in May. Meanwhile in Europe, sales tanked to a two-decade low. So, what’s going on with the auto industry?

In the U.S., sales in the automotive industry got a boost over Memorial Day weekend with a particually big spike in truck sales; sales of large passenger pickup trucks have been driving the industry towards an upward swing since the start of the year.

This American gain follows a month of concern as April sales were not very impressive. The gains in May in the United States hovered around 8.2% over the same month in 2012.

Many believe that the economy is now stable enough to start spending on big ticket items since home sales and new construction are boosting consumer confidence. People in the U.S. are now eager to replace their aging vehicles they held onto during the recession. This positive trend shows no signs of slowing.

This same confidence cannot be found in Europe as auto sales hit their lowest point in 20 years. Experts are calling this the beginning of the bottom out for the European auto market.

The European Automobile Manufacturer’s Association reported a drop of 5.9% in sales in May. This drop represents the fewest vehicles sold since May of 1993. The year of 2007 was the last for rising auto sales and they have been on the decline at a rate of 6.8% annually ever since.

This situation reflects the contrast between the zones as the European financial crisis is still in a stunted state. The people of Europe are very wary about spending money on high priced items like a new car. Europe still has a looming, record-high unemployment rate with young people—the top demographic which the future of the auto industry depends on—struggling to find jobs.

Experts are not expecting any further drops in the European auto industry, but they aren’t calling for a major recovery any time soon. Sales are expected to start to bounce back by the beginning of 2014, but only at a very modest rate.

Japan is the only major nation to trail Europe in this auto sales trend, while most other regions report boosts in auto sales similar to those seen in the United States.




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