good news from the auto industry

Some of you know that I grew up outside of Detroit. Accordingly, I have a cultural interest in the automobile industry. Recent national reports show that the automobile sector is recovering, with US sales of cars and light trucks up nearly 13 percent from a year ago. Two factors at play. First, higher gas prices are driving demand for more fuel efficient vehicles. More importantly, increased US consumer confidence about the recovery has brought people back into the showrooms (perhaps after postponing purchases during shakier times).

So what does that have to do with Colorado? Several things. First, according to the Bureau of Labor Statistics Colorado’s new car dealers employed more than 14,500 workers in 2010, making them an important source of jobs. Yet this is down more than 2,700 jobs from 2007–just prior to the Great Recession. As the industry bounces back, we can expect dealers to bring on more workers.

Second, new car sales are an important revenue source for Colorado. According to the Colorado Automobile Dealers Association, new vehicle registrations from the period Nov 2011-Jan 2012 were up 20 percent from a year earlier (see chart). Based on the average price of a new vehicle of just under $30,000, an additional sale adds more than $850 to state coffers.


Source: Colorado Automobile Dealers Association

Finally, although no one will confuse Denver with Detroit, Colorado is home to a sort of nascent automobile sector. In a recent inventory we identified about 50 Colorado based companies involved in engines, transmissions and clean fuel systems, mostly in product development. A robust and dynamic domestic auto industry can spur innovation across the country.


1 Response to “good news from the auto industry”

  1. 1 timwjackson April 7, 2012 at 2:11 am

    Good summary. On target and very timely.

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