17 million cars and light trucks were sold in the last 12 months

Article written by: Dr. Kamran Afshar
Chamber Chief Economist, The Chamber's Finance Committee  

Cars are one of the biggest ticket items consumers purchases. And historically car sales have been highly correlated with the Consumer Sentiment Index and economic cycles in the US. With the exception of the large cities, public transportation in the rest of the country leaves a lot to be desired for. Outside the major cities, our transportation infrastructure is heavily dependent on private car ownership, making it more of a necessity. 
17 million cars and light trucks were sold in the US in the 12 months end- ing in October 2019, a shade higher than its average level in the boom years of 2004-2006, however, close to half-a-million fewer sales com- pared to 2015-16 period. 
Car & light truck sales ran at around 16 to 17 million units annually be- fore the great recession. And while there are more cars being sold now, because our population has 
increased by more than 28 million since then, on the per capita basis we are still not back to the peak car buying period when the number of cars sold per year exceeded 6 per every 100 Americans. Now that number has dropped to 5. 
During the dark days of the Great Recession, car sales dropped by al- most 50%. We significantly reduced buying new cars and discovered to our surprise, that our old cars may not have been as obsolete as we thought! 
During the recession the cash-for- clunker program was introduced to prevent the demise of the US car industry. The sheer size of the buy back, not only stop the decline in car sales, but it spiked sales vol- ume sky high. The effectiveness of the program became obvious after it ended, when the car market not only didn’t drop back to where it was before the program, it grew rapidly, and in a year’s time car sales were 30% higher than before the program started. The cash-for- clunker program worked and pull back the car industry from the brink of disaster, which is exactly what the program was designed to do. 
Businesses always adjust their method of operation after each re- cession, when they have to do with a lot less, they learn new methods and the longer and the harder a re- cession the larger the changes after 
the recession. Buying cars historically was highly correlated with the Consumer Sentiment Index which is now higher than what it was be- fore the Great Recession. Despite of that it appears that consumers also learned from the long and hard re- cession, at least in their approach to buying cars. On a per capita basis, we are now buying 15% fewer cars than we did before the recession. 
Cars are one of the biggest ticket items consumers purchases. And historically car sales have been highly correlated with the Consumer Sentiment Index and economic cycles in the US. With the exception of the large cities, public transportation in the rest of the country leaves a lot to be desired for. Outside the major cities, our transportation infrastructure is heavily dependent on private car ownership, making it more of a necessity. 
17 million cars and light trucks were sold in the US in the 12 months end- ing in October 2019, a shade higher than its average level in the boom years of 2004-2006, however, close to half-a-million fewer sales compared to 2015-16 period. 
Car & light truck sales ran at around 16 to 17 million units annually before the great recession. And while there are more cars being sold now, because our population has increased by more than 28 million since then, on the per capita basis we are still not back to the peak car buying period when the number of cars sold per year exceeded 6 per every 100 Americans. Now that number has dropped to 5. 
During the dark days of the Great Recession, car sales dropped by almost 50%. We significantly reduced buying new cars and discovered to our surprise, that our old cars may not have been as obsolete as we thought! 
During the recession the cash-for-clunker program was introduced to prevent the demise of the US car industry. The sheer size of the buy back, not only stop the decline in car sales, but it spiked sales volume sky high. The effectiveness of the program became obvious after it ended, when the car market not only didn’t drop back to where it was before the program, it grew rapidly, and in a year’s time car sales were 30% higher than before the program started. The cash-for-clunker program worked and pull back the car industry from the brink of disaster, which is exactly what the program was designed to do. 
Businesses always adjust their method of operation after each recession, when they have to do with a lot less, they learn new methods and the longer and the harder a recession the larger the changes after the recession. Buying cars historically was highly correlated with the Consumer Sentiment Index which is now higher than what it was before the Great Recession. Despite of that it appears that consumers also learned from the long and hard recession, at least in their approach to buying cars. On a per capita basis, we are now buying 15% fewer cars than we did before the recession.