Auto Industry Poised To Wrap Up A Blockbuster Year
MICHEL MARTIN, HOST:
As the year comes to a close, it looks like 2015 will be the year of the automobile. The auto industry is poised to sell a million and a half vehicles by New Year's. That would be an all-time high. Not only is the year expected to be blockbuster, but more people are expected to buy cars and trucks in the days after Christmas than the rest of December combined. NPR's Sonari Glinton has covered the highs and lows of the car industry, and he joins us from NPR West. Sonari, welcome.
SONARI GLINTON, BYLINE: It's good to be with you.
MARTIN: So analysts say this is going to be the best year on record. What is leading to these high sales? Is the economy that great?
GLINTON: Well, consumers are a little stingy elsewhere in the economy, but when it comes to your car, there's a lot of pent-up demand. So if you remember when the economy bottomed out, we sold almost half as many cars. And right now, the average car on the road is about a decade old. There's also access to credit, so credit has loosened up. People are defaulting less on their auto loans. Interest rates are low, and there's an expectation that they're going to go up. And so people are sort of running to their cars to lock in low interest rates. And cars are safer and more efficient and cooler than they've ever been.
MARTIN: But you know, Sonari, just to kind of set the contrast here, you reported on Detroit. And I remember when we talked about the state of the auto industry some years ago. Do you remember that?
GLINTON: What's funny is I started reporting on Detroit with GM exiting bankruptcy. So it's been five years of my career, and I remember talking to you during the Super Bowl when this commercial came out. Remember it?
(SOUNDBITE OF CHRYSLER ADVERTISEMENT)
UNIDENTIFIED MAN: What does this city know about luxury, huh? What does a town that's been to hell and back know about the finer things in life? Well, I'll tell you - more than most.
GLINTON: And that was a Chrysler commercial. Now, each of the three Detroit automakers has come roaring back. And Chrysler has probably traveled the furthest distance between any of them. They are benefiting a lot from this big sales year.
MARTIN: So what are the cars that are selling?
GLINTON: Well, the reason Chrysler's benefiting a lot is because of the truck and the compact SUV. So compact SUVs and trucks and SUVs, in general, make up 58 percent of the overall sales of cars. And so that is helping all of the Detroit carmakers.
MARTIN: Is anybody not benefiting from this buying boom?
GLINTON: Hybrids - hybrid sales have taken a hit, in part because gas prices are as low as $2 in parts of the country, and so hybrids have lost a bit of their shine. Also, regular gasoline engines have become a lot more fuel-efficient. In some ways, some of the regular gas engines are more fuel-efficient than some of the lesser hybrids, so there are really fuel-efficient gas cars out there.
MARTIN: Sonari, before we let you go, we talked about the fact that the domestic auto industry has struggled, how autoworkers were certainly pressured to give up a lot in terms of pay and benefits in the recession. What about this year? Has any of that changed?
GLINTON: Well, each of the three Detroit automakers renegotiated their contracts with the UAW. And each of the groups of workers made some gains to get back some of what they lost during the depths of the recession. So wages are going to go up for the first time for a lot of autoworkers, and their share of the profits are going to increase, as well, because of this boom year.
MARTIN: Sonari Glinton covers business for NPR and our Planet Money podcast, and he joined us from NPR West in Culver City. Sonari, thank you.
GLINTON: It's a pleasure. Transcript provided by NPR, Copyright NPR.