2014: Trillion-Dollar Year For Retail Automotive?

We reported back in November sales numbers in retail automotive were very strong for the year. However, the latest numbers indicate that the year was record-breaking. The Detroit News has reported that 2014 combined new and used auto sales in the United States have “generated a record $1.1 trillion dollars.” According to TrueCar, Americans purchased 54 million new and used vehicles with overall purchase numbers expected to increase 11 percent compared to one year ago.

With gas prices at their lowest point in over four years, consumers have more money in their pockets. That’s great news for dealers. The NW Herald interviewed Crystal Lake Jeep Chrysler Dodge owner Gary Rosenberg, who said the combination of low interest rates, fuel prices and smarter vehicle tech is the equivalent of a, “horse track trifecta.” Gary Lang, owner of the Gary Lang Auto Group, explained this increase in sales is great to see, considering where retail auto has been in recent years. “The encouraging thing about today’s market is this is not recovery business. We had three years of that. Now the cars that were purchased in early stages of recovery are coming back as trade-ins.”

With consumers presumably having a bit of freed up capital from the decline in prices at the pump, Lang said it means different reasons for buying cars. “People are buying cars on impulse again. … When business was bad, people were only buying cars out of necessity,” Lang explained.

John Krafcik, President of TrueCar, told the DN the impact of a record-setting year for retail automotive is often underestimated. “To put this in perspective, new vehicle revenue alone will surpass the value of new single family homes in the U.S. nearly three times. It’s a remarkable year for the industry as both sides of the market are seeing notable growth and commanding strong pricing power.”

Industry insiders are predicting a continuation of record-setting numbers for retail automotive into 2015. Have you seen an uptick in sales at your dealership as gas prices continue to fall? Do you think the retail automotive industry will continue to flourish into 2015?