US Auto Industry

US auto industry in 2009 As per various economic surveys and reports, US auto industry is supposed to be in bad shape in 2009. Previously homebuilding sector was at first place but since December 2008 it has been replaced by US automobile industry.

Auto makers in US have been hit hard by recession that gripped auto industry of US in 2008. Since then sales of cars have been dropping at a steady rate. This has led many major automobile establishments in US like General Motors to almost become bankrupt. A number of car making companies have had to file for bankruptcy under Chapter 11. Filing for bankruptcy seems to be a good option for auto makers in US as it is believed that mere infusion of money in auto industry in US would not be only solution. A number of important companies of US automobile industry have said that federal government should arrange for debtor-in-possession loans. These loans would assist automobile industry of US to keep on existing while being under protection of creditors.
US auto industry suppliers Auto suppliers in US have been experiencing difficulties in reducing operational costs and this has brought about financial difficulties for them. A principal reason behind this is capital intensive nature of their business operations. Buyers of cars are finding it hard to obtain loans, which are necessary to purchase cars. This has affected sales of cars in US as well. US auto industry sales in years to come As per estimates of trade analysts, sales of cars in US would fall by, approximately, 13 percent from 2008 and would reach a 27 year low. J.D. Power, a major automobile forecasting establishment, has said that in 2009 only 11.4 million light cars would be sold in US. As per estimates of Deutsche Bank this figure is 11.5 million.

This would be lowest since 1982 when 10.5 million light cars were sold. Already in first quarter of 2009 cars have sold at a rate of 10.9 million per year. This is slightly higher than in last quarter of 2008 when cars were selling at a rate of 10.2 million per year. However, better future has been predicted in years 2010 and 2011. Industry analysts like J.D. Power have estimated that in 2010 13.4 million cars would be sold in US and in 2011 this number would go up to 14.7 millions.