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Auto Sales

Learn how auto sales drive competition among car companies.

The auto sales industry is putting more keys in the hand of drivers who want good gas mileage. [©Shutterstock, 2010]
©Shutterstock, 2010
The auto sales industry is putting more keys in the hand of drivers who want good gas mileage.

Auto sales are one of the biggest businesses in the United States. More than ten million vehicles are sold in the United States each year according to the Wall Street Journal. The popular trends in cars sold have changed over the years. Families have shifted from station wagons to minivans to sport utility vehicles. The audience for sporty muscle cars has moved from young adults to middle-aged baby boomers. The biggest factor of all may be how American buyers turn more and more to foreign nameplates over their domestic brands. And as oil supplies dwindle and become more volatile, the question remains as to whether or not enough alternate fuel cars will become available.

Domination from the Far East

The five largest competing car companies are the American "big three," General Motors, Ford and Chrysler, and Japan based Toyota and Honda. The Japanese automakers have made significant gains in recent years steering the American people away from their Detroit counterparts. This trend came to a head in the late 2000s when Toyota surpassed General Motors as the world's largest automaker and Honda surpassed Chrysler as the fourth-largest automaker. American sales of Toyota's Camry, Corolla and Prius and Honda's Civic and Accord have largely driven the success of these companies. This has caused the American automakers to request help in 2008 from the U.S. government for financial losses, while their Eastern counterparts report profits.

The American Big Three have fought to change the image that their cars are of poorer quality than their foreign competitors. The Camry and Civic have been among the highest rated cars in reliability and safety. However, Ford recently received multiple initial quality awards from J.D. Power and Associates, while GM's Chevrolet Malibu has become one of the highest rated mid-size cars.

From Bigger is Better to More Miles

As the 1990s crossed over to the 21st century, the trend in American car buying seemed to favor bigger and bigger vehicles that advertised horsepower, storage space and towing capacity. Sport utility vehicles were advertised mainly toward families needing room for multiple children and storage space. Large trucks like the Chevrolet Silverado, Ford F150 and Toyota Tundra were heavily marketed to Americans wanting to convey a rugged, tough image. G.M. even redesigned its military Humvee for commercial sales as the Hummer.

Even then, public concern over global warming and dwindling fuel supplies grew, and people inquired about alternative fuel sources. G.M. developed the first commercial electric car in 1996, the EV1. The first 660 models produced were available through lease only and were all successfully leased. However, the EV1 program was scrapped by 2003, the cars were destroyed, and the reasons for doing so have been debated ever since.

Rising gas prices led people to trade in their larger vehicles for more fuel-efficient models by the late 2000s. The Big Three found it hard to catch up with the Japanese makers that were already producing small cars efficiently. Once again, Toyota became a leader by pushing the Toyota Prius, a hybrid electric model advertised at 48 miles per gallon, which has been rated the world's most fuel-efficient car. However, Toyota's claim to support fuel economy has been debated.

The watchdog group, Corporate Accountability International, accused Toyota of opposing U.S. legislation to mandate 35 MPG cars by 2020, even though the automaker faces tougher standards in Japan. They also claim that their vehicles' average fuel mileage is less than it was two decades ago, even with the Prius, mainly due to large sales of the Tundra pickup truck with an average 14 MPG. Meanwhile, G.M. actively advertised how Chevrolet has the most models of any brand that gets at least 30 MPG while announcing design on a new electric car, the Chevrolet Volt. Ford began actively improving its fuel efficiency around the board and began promoting itself as having the best overall fuel economy among all its models.

Sports Cars Going Old School

In recent years, American automakers changed their approach in designing their sports cars. It started when Ford altered the appearance of their popular Mustang in 2005. The design closely resembled the larger-sized muscle cars of the 1960s after Ford had marketed the car as a family vehicle for more than 25 years previous. The change restored the car's popularity, making "Car and Driver's" Ten Best List. This led Chrysler to reissue the Dodge Challenger, whose design closely resembled the older Challenger and Charger models. After a seven-year hiatus, G.M. announced the Chevrolet Camaro would re-enter production with a design that resembled its first-generation model.

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