America's automotive industry continues to boom, with analysts predicting that sales in 2014 will reach over 16 million units while marking just the second time since World War II that the industry has seen five consecutive years of growth. The estimates, if correct, would represent a 500,000-unit improvement over the current projections for 2013.

What's remarkable, though, is how the industry is achieving this growth. Two things set this boom apart from the last time we saw five consecutive years of growth, 1996 to 2000. First, it's the vehicles being sold. In those halcyon days of cheap gas and cheaper interiors, the Detroit Three were shifting record numbers of trucks and SUVs while the humble car languished. The industry also offered heavy incentives to move metal and keep supplies at appropriate levels. An over-reliance on fleet sales also artificially inflated sales figures.

Industry watchers say this boom is very different, though. Big-name market segments are swelling with contenders that are better than they've ever been before. The Detroit Three are genuinely competitive in the midsize and compact sedan segment and are maintaining dominance over the fullsize pickup truck market, while Japanese control is also being challenged by a pair of able-bodied Korean brands.

Vehicle prices, rather than incentives, are increasing, while fleet sales have been trimmed dramatically. "You see a rising level of competitiveness for the domestics across the whole industry, which is forcing the Asians to be more aggressive just to maintain where they are," said Tom Libby, an RL Polk analyst that spoke with Automotive News. George Magliano, Chief Economist at IHS Automotive, meanwhile, told AN the growth was "coming effortlessly."

The industry is facing issues that may cause problems in the future, however. In some cases, vehicle supplies are extremely low due to the booming demand (not to mention the fallout from automakers' drive to reduce production capacity during the crisis). This is part of the reason prices are climbing so quickly – manufacturers need to perform a difficult balancing act between maintaining availability without flooding the market and pushing down prices. There's also concern over growing sub-prime loans, for reasons that shouldn't need explaining. But despite these worries, the market is more competitive than it's ever been, and while prices may be high, the competition appears to be nothing but good news for consumers.


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    • 1 Second Ago
  • 8 Comments
      Bassracerx
      • 1 Year Ago
      who is buying all these cars? i live in a large city and rarely see any new vehicles on the roads. also while the sales are increasing guess what is also incresing: REPOS. so wait a few months and find you a clean repo at a credit union for a huge discount!
      jf.bouchard
      • 1 Year Ago
      People have not learned from 2008 and are going back to their old ways. I swear we have a love affair with debt in America. We keep them as if they're a pet and we take on new ones frivolously. People need to read The Millionaire Next Door.
      Lastchance
      • 1 Year Ago
      I don't see many new cars on the road in the Boston area. Most are at least a few years old, I see many cars that years older. Maybe in some markets but not here.
      Roger
      • 1 Year Ago
      I don't think I've ever seen that many Chargers at one time on any dealer lot around where I live. Actually, I don't think I've seen more than 2 or 3 on the lots at any one time.
      Rob
      • 1 Year Ago
      I live in the San Francisco area and all I see is new cars. Not sure what the rest of the country is like. I haven't traveled for a few years.
      Anonymous99
      • 1 Year Ago
      To all the comments about not seeing new cars...wow..I thought it was nationwide, however in my case I tend to see new cars on a daily basis. I guess Miami has a love affair with revolving debt and keeping up with the Jones'. New cars pop up everywhere, and the funny part is it springs up more often in less desirable neighborhoods. Average vehicle age in Miami is 3-4 years old.
      Bryan Lund
      • 1 Year Ago
      I have a 2008 Mitsubishi Lancer GTS, which I love. It has 111,570 miles on it and it's in great shape. And it's all paid off. That's it. I'm holding onto it and not trading in for a new car. Even if I could get it's trade in amount according to kbb.com ($7,000) in a trade for a new vehicle, I'd still be looking at $225 month payments for 48 months if I go out and trade for a new Nissan cube (which is my current favorite new vehicle, believe it or not!). Now, think about it. I could really use that $225 every month for big ticket expenses, a nice vacation somewhere, or just going the way of Clark Howard or more like Suze Ormon, and SAVE THE 225 bucks EVERY MONTH for 4 years! And the '08 Lancer GTS is a great car, too. It's not showing signs of slowing down at all and it looks great. No, I'm thinking heavier this time. And I'm thinkin' holdin' on to the old car.