Pent-Up Demand to Aid Auto Industry Growth in 2013

The past five years were tumultuous for the global car and automobile manufacturing industry. According to IBISWorld Industry analyst Josh McBee, “Skyrocketing fuel prices and growing environmental concerns have shifted consumers’ preferences away from fuel-guzzling pickup trucks to smaller, more fuel-efficient cars.” Some automakers embraced the change by expanding their small-car portfolios and diversifying into the production of hybrid electric motor vehicles. Other automakers were more reluctant to shift their focus from big to small cars, expecting the price of fuel to contract eventually, bringing consumers back to the big-car fold.

When fuel prices fell during the second half of 2008, it was due to the U.S. financial crisis ripping through the global economy. The meltdown began when a debt binge overwhelmed many U.S. consumers and businesses. This had a domino effect throughout the developed and emerging worlds, with many Western nations following the U.S. into recession.