NewUsed

Find by category:

Exhaust Notes

Auto Sales Rise Along with Gas Prices

Consumers bought cars and trucks at a record pace in March despite pain at the pump.

By Douglas Newcomb Apr 4, 2012 1:39PM
The Chevy Spark. Photo by Chevy.Rising gas prices usually lead to declining auto sales. But tell that to consumers last month, who helped push March U.S. auto sales in to a five-year high. Meanwhile, the average price of a gallon of gas is $3.92 nationally, with 15 states seeing prices above $4 per gallon.

It's an economic anomaly, and a very different scenario from 2008, when gas prices last rose above $4 a gallon ahead of stalling auto sales.

"Sixty-three percent of consumers, when surveyed, say they are worried about high gas prices,” Nariman Behravesh, chief economist for IHS Global Insight, said at a forum sponsored by his company and the National Automobile Dealers Association before the New York International Auto Show this week. "Reality: They haven’t changed their behavior.”

Chrysler, not exactly known for its fuel-efficient vehicles, saw its sales rise 34 percent in March, and GM reported a 12 percent increase for the same period. Ford said its sales rose 5 percent last month, while almost all other automakers also reported an uptick in March sales.

A senior economist at IHS, George Magliano, estimated that auto sales in March will have reached an annualized rate of 14.5 million cars and trucks. "These are tremendous numbers, way beyond expectations,” he said. “We are at the point where we feel the U.S. has turned the corner.”

The economists pointed to a mild winter and consequently lower heating bills as helping to offset higher prices at the pump. They also noted that a brightening unemployment picture and growing consumer confidence, as well as banks loosening credit for car loans, are also helping.

Behravesh said that the chances of the U.S. economy sliding into another recession have dropped from about 40% last year at this time to about 20% now, although he added that one of the biggest risks to the economic upturn is even higher gas prices. If political instability in Iran causes oil to spike to $240 per barrel, the effect would a big blow to the U.S. economy.

And, of course, to car and truck sales. At $5 a gallon, reality may start to sink in.

< Back to Exhaust Notes
User Picture
Write a comment...
2Comments
realamerican100percent
Apr 5, 2012 5:26PM
avatar

start digging our oil ,we can keep yhe prices low enough, at least it will  put alot of our people to work and poosed our bad economy

Steve-80
Apr 6, 2012 3:01PM
avatar
Well, you don't dig for oil, and the oil companies are not going to sell it here. They're going to export it to different countries where they can charge even more.  We could have a surplus of oil, and we'd still be paying more than we should.
Report
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
Categories
100 character limit
Are you sure you want to delete this comment?

EXPLORE NEW CARS

MORE ON MSN AUTOS

‘Eleanor’ Mustang sells for $1M‘Eleanor’ Mustang sells for $1M

'Gone in 60 Seconds' movie car driven by Nicolas Cage has a new home.

ABOUT EXHAUST NOTES

Cars are cool, and here at MSN Autos we love everything about them, but we also know they're more than simply speed and style: a car is an essential tool, a much-needed accessory to help you get through your day-to-day life. What you drive is also one of the most important investments you can make, so we'll help you navigate your way through the car buying and ownership experiences. We strive to be your daily destination for news, notes, tips and tricks from across the automotive world. So whether it's through original content from our world-class journalists or the latest buzz from the far corners of the Web, Exhaust Notes helps you make sense of your automotive world.

Have a story idea? Tip us off at exhaustnotes@live.com.