Wave goodbye to a banner year for America’s auto industry. Six years after the federal bailout saved it from driving off a cliff, the nation’s car-and-truck economy has rebounded with supercharged sales, innovative new upgrades — and even rosier forecasts for the year ahead.
New vehicle sales rose 6 percent this year, and U.
S. carmakers are set to sell more than 16 million vehicles, the most since 2006. The economy is improving, more people have jobs and hopeful drivers are finding easier access to low-interest loans. The cherry on top: Gas prices’ worldwide freefall, which has made it cheaper, easier and more enticing to get out and drive.Though some automakers spent the year offering lower prices in hopes of winning over lifetime drivers, most won better business for leading vehicles like crossovers, trucks and SUVs without depending on steep discounts. The average new car or truck sold for $31,831, a 2 percent jump over last year, while used vehicle prices increased 5 percent, to $16,335, data from auto-pricing site TrueCar show.
It was also the year when the industry could finally put some real distance between it and the Great Recession. The auto bailouts, launched in 2008 as part of the $700 billion financial rescue, ended officially this month, when the Treasury Department sold its stake in lender Ally Financial, the last big recipient of federal relief.
It was great news for carmakers. Nearly 17 million cars and trucks were made across North America this year, an eight-year high. Five years after filing for bankruptcy, GM is soaring: Its profits doubled in the most recent quarter, compared to a year ago. Other once-sluggish brands also became resilient: Jeep’s nationwide sales of Wranglers, Grand Cherokees and other cars have risen about 44 percent this year over last.
It was also one of the auto world’s most inventive years yet, both in high-tech roll-outs of new concept cars and in upgrades for old best-sellers. America’s top-selling vehicle for more than three decades, the Ford F-150, saw its frame radically reconfigured from steel to aluminum, shaving off 700 pounds and helping improve gas mileage. The smartphone world’s top players also jumped into in-car computing, announcing dashboard tech like Apple CarPlay and Android Auto.
Electric-car giant Tesla made the most noise, with billionaire executive Elon Musk announcing a $5 billion Nevada battery “Gigafactory” and, in his latest pledge, a Tesla Roadster that drives 400 miles, the distance from Los Angeles to San Francisco, on a single charge. The hype pushed Musk’s cars further into the spotlight and boosted Tesla’s stock: Shares jumped 48 percent this year, closing Monday at about $225.
Not all of the auto world’s innovation in 2014 focused on putting buyers behind the wheel. With young Americans driving far less than they used to, companies like techie taxi firm Uber saw their earnings and confidence soar. In one valuation, Uber was said to be worth more than Mazda and Tesla combined.
Some companies focused heavily on making human drivers become a thing of the past. Google this year unveiled its self-driving, bubble-bodied concept car, piloted exclusively by a computer — with no steering wheel or pedals in sight. In coming years, other automakers, including Cadillac, said they plan to market autonomous cars of their own.
But all of the good news this year was tainted by one crippling superlative: 2014 was the worst year for auto recalls in U.S. history. Automakers this year announced that more than 50 million cars and trucks — or about 1 in 5 on American roads – were at risk of critical defects.
Two of the most lethal, high-profile flaws — GM’s faulty ignition switches and exploding air bags linked to Japanese auto-parts giant Takata – were linked to dozens of deaths, and millions of faulty cars remain on the road amid ongoing recalls.
GM has recalled 30 million cars and trucks worldwide. A series of investigations led to a $35 million fine for GM, and the deadline to join a victims’ compensation fund overseen by adviser Kenneth Feinberg ends next month.
Other recalls were just as devastating. Federal prosecutors in March announced a $1.2 billion fine against Toyota due to its troubled recall of 10 million cars, marking the largest criminal penalty for an automaker in the U.S.
Even with nationwide recalls scheduled to take years to complete, analysts predict next year could prove to be even more lucrative for automakers. TrueCar predicts Americans will buy 17 million new cars and trucks next year, just a step below the industry’s best year ever, in 2000, when 17.4 million vehicles were sold.
But now, half a decade after the industry bottomed, some analysts expect the rapid climb of sales could lose some speed, leading automakers to become even more competitive in 2015.
“With sales growth slowing, it could start to get a little more brutal and aggressive out there, in a trench warfare kind of way,” said Kelley Blue Book senior analyst Karl Brauer. “The big question is how that’s gonna play out in 2015 when there’s so much less organic growth to go around.”
