Since 2007, the United States has experienced the worst economic lull since the Great Depression, but a recent rise in automotive sales points toward a strengthening economy and the end of the “Great Recession.”
A recent Reuters report stated that an increase in long-term spending, such as car purchases, is a good indicator of an improving economy.
“Business has increased to pre-recession times. Lending is back, but they are more strict on the paper (contracts) they buy. Secondary lending now requires full documentation,” said Ryan Rousselo, Internet Sales Manager for Joe Usry Automotive.
The economy crashed in 2007 behind nearly a decade of low unemployment and high consumer spending.
“Sales went from the best in over a decade to the worst in about a month’s time. Lending got tight. Advances went down and subprime (lending) was all but eliminated,” said Rousselo.
Many blame the economic downturn on an inflated housing market that burst in 2007 and the subsequent stock market crash in fall 2008, but some also blame the media.
“It slowed business down. Actually, the main culprit was the media preaching gloom and doom that affected business more than the recession,” said Eric Anderson, Sales Manager at Herrin-Gear Toyota, when asked how the recession affected the car business.
Media bias or not, the situation on car lots began to slowly improve.
“Business has steadily grown since 2008 when fuel prices leveled off. The demand bubble had to burst. Americans love cars. Plus ultra low financing has made many vehicles more affordable,” said Anderson.
Other proof that the recession is ending is the decrease in unemployment rates, which, according to Bureau of Labor Statistics data, is down almost one percent in Mississippi as well as nationally from a year ago.
Anderson and Rousselo have separate, but equally positive, outlooks for the future of the car business because one deals imports and the other domestics.
“The outlook is excellent for quality manufacturers like Toyota and Honda,” said Anderson, “Month over month I have witnessed an increase in sales and gross profit.”
“With the launch of all the new revised and upgraded products, the future of the business is bright. Domestic automakers have taken a more conservative business model by limiting supply to keep prices higher and supply fewer. The business is exciting, and the technology that is in these vehicles is awesome,” said Rousselo.