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Years Of Tumult In The Rear-View, U.S. Auto Industry Revs Back Up


This is ALL THINGS CONSIDERED from NPR News. I'm Melissa Block.


And I'm Audie Cornish. We begin this hour with a number. That number is 50. It's for our new series Number of the Year, where we explore the numbers that tell the story of 2013, numbers about same sex marriage, the minimum wage, Syria, even pandas. Today's number tells the story of a rebound in the U.S. auto industry.

After a near-death experience in the depths of the financial crisis, car makers are thriving again, and the evidence is in that number. As NPR's Sonari Glinton reports, since those dark days, auto sales in the U.S. have grown by 50 percent.

SONARI GLINTON, BYLINE: When you ask an auto industry person when were the scariest times for the car business, there's no hesitation, none. I asked Jessica Caldwell; she's a senior analyst with Edmunds.com.

JESSICA CALDWELL: Oh, most definitely. I think the one that sticks out in my mind was in the beginning of 2009, January and February both had industry sales in the 600,000s.

GLINTON: Caldwell says 600,000 was a shocking number because the car industry could easily sell twice that number. Heck, sometimes they almost sold three times that number in a month.

CALDWELL: So if you could imagine through 2009, it just was very dark and I think the questions were how low is this really going to go, because it kept getting worse and then, you know, you're thinking that had to be the bottom and then you'd be surprised again. So it was a very dark time.

GLINTON: Well, how low could it go? Car sales hit a 30-year low, about 10 and a half million cars, when the industry was used to selling 16 million easy.

CALDWELL: And I don't think that people were quite prepared for it 'cause there had been so many good years and there had been selling so many cars and cars were so in fashion and people, you know, wanted the latest, the greatest, they wanted, you know, to have a new one every few years, and all of a sudden that sentiment just completely changed.

GLINTON: It wasn't just that sales took a hit from the economic collapse. As things were just starting to get better, Toyota had a tremendous recall because of allegations of unintended acceleration. Then the Japanese earthquake and tsunami took a toll on the Japanese car makers. Oh, and then there was the meltdown of the European economy.

But despite all of that, the auto industry has grown about 50 percent. Alec Gutierrez with Kelley Blue Book says the bankruptcies and the bailouts were all important to this 50 percent growth, but he says the car business has done something and basic and fundamental.

ALEC GUTIERREZ: Yeah, I think for the first time we're seeing all auto makers really focused on producing top quality products and delivering the vehicles that consumers actually want to drive rather than just focusing on those vehicles that are most profitable - i.e. trucks and SUVs, which was the norm in the early 2000s and 1990s.

GLINTON: Gutierrez says the American car industry especially used to produce too many cars. That's changed. Now production and demand are closer in line, so while the average price of a car has gone up, sales have gone up and so have profits. But while Detroit especially has changed, consumers have changed as well. Shoppers are turning to more fuel-efficient cars and the percentage of trucks and large SUVs has fallen.

GUTIERREZ: Consumers have a greater focus on their budget and they're trying to make smarter purchases, hence the importance of small cars and these budget-friendly cars and hence why domestic automakers, especially, have really zeroed in and focusing on these once-ignored segments.

MELINDA ZABRITSKI: Especially the last couple of years, consumers have certainly gotten better keeping current with their car loans.

GLINTON: Melinda Zabritski is with Experian, the credit scoring agency. She says delinquencies are down, repossessions are down, and while more people are getting credit, the banks are getting better at giving it out, even the people with troubled credit histories. So there's been a growth in the subprime market.

ZABRITSKI: That's certainly something that's coming back, but when we look at the growth in subprime, we don't see as much growth in the really deep subprime portion of the marketplace than we did pre-recession.

GLINTON: All the analysts say that even though sales aren't as high as they once were in the so-called glory days, the industry is smarter and so are consumers, and you're much more likely to get a better car and keep it for much longer, no matter where it's from. Sonari Glinton, NPR News, Culver City. Transcript provided by NPR, Copyright NPR.

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