The Increasing of Car Sales

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Toyota, Chrysler gain in US car sales 

October 3, 2012 

Chrysler and Toyota have posted solid gains in US car sales in September while rival Ford says its gains have stalled."Last month marked our 30th consecutive month of year-over-year sales increases and our strongest September in five years," Reid Bigland, Chrysler's head of US sales, said in a statement."Going forward with our current product line up, record low interest rates and a stable US economy, we remain optimistic about the health of the US new vehicle sales industry and our position in it."Chrysler's sales rose 12 per cent to 142,041 vehicles in September as car sales jumped 27 per cent and truck sales rose six per cent.Toyota said its sales jumped 42 per cent to 171,910 vehicles and would announce more details later in the day.Ford's sales slipped 0.1 per cent in September to 174,976 vehicles as truck sales fell eight per cent. But the second largest US carmaker hailed the fact that sales of its small cars jumped 73 per cent to a decade-high."As more buyers look for new vehicles across the country, Ford is ready with our strongest lineup ever of fuel-efficient cars, utilities and full-size pickups," Ken Czubay, head of US sales at Ford, said in a statement."Fuel economy remains one of the most important features customers want most today, and Ford is answering the call with five vehicles that deliver 40 mpg or better - with another three on the way by year-end."Automotive website Edmunds.com forecast that the pace of US auto sales will ease somewhat to a seasonally adjusted, annualised rate of 14.4 million in September from 14.52 million in August.US car sales have been climbing slowly but mostly steadily this year after struggling to recover from the 2008 financial crisis and supply shortages caused by last year's Japanese quake and tsunami."There's a feeling among dealers and automakers that car sales are easing into cruise control, and that's a good feeling for an industry that's felt more than its share of bumps in the last few years," said Edmunds.com analyst Jessica Caldwell."This month's results offer more evidence that car buyers are finding the right signs to jump back into the market."

Read more: http://www.smh.com.au/business/world-business/toyota-chrysler-gain-in-us-car-sales-20121003-26y2w.html#ixzz28bH6GZeC

The Increasing of Car Sales

Over September 2012, there is an increase in the amount of US’s car sales especially for Toyota and Chrysler. In contrary, Ford’s car sales experienced degradation even has been stalled in that particular month. Reid Bigland as Chrysler's head of US sales, said that in September 2012 the company’s car sales increased a lot, even it becomes the company’s strongest month over the last five years. Reid also believe that the sales of the vehicle will remain constant or even becomes higher if the economy situation in the country is stable and with the low interest rates. If the economy situation is stable it means the average income level in the country is also stable. The sales of US’s car determine by the income level of the country. Therefore the car sales in that particular country is stable as the income level is stable too. Chrysler’s car sales jumped up until 12 percent to 142,041 vehicles and Toyota’s car sales rose up until 42 per cent to 171,910 vehicles. 

However total increase of the car sales among the country has reached until 27 percent, while the total truck sales rose 6 percent. The number of the total increase for US’s car sales is quite high. From the result that has been shown, it means the company can get more allowance which can increase the total average income. While their rival, Ford which is the second largest carmaker in US, experienced the decreasing in the truck sales as high as 8 percent while its small car’s sales increased 73 percent so entirely Ford’s car sales has slipped 0.1 percent 174,976 vehicles in September 2012. But Ken Czubay, head of US sales at Ford, said that Ford is ready with their strongest lineup ever of fuel-efficient cars utilities and full-size pickups. He thinks the car products that provided by Ford will answer the need of people today of vehicles. Ford has expected that their car sales will increase because it fulfill the people wants with its new products which will be launched at the end of the year. 

In 2008, there was a financial crisis that happened. This financial crisis happened because of carmakers has experienced a decreasing in supply. From the graph above, supply is decreasing from So to S1 meanwhile the demand was remain the same. The changes in supply made the equilibrium point also change from Eo to E1 or shift to the left which made the equilibrium price became higher and the quantity supplied was smaller. This condition leads to a shortage situation, where the quantity supplied cannot fulfill the demand of the car. The worse is Japan also experienced the earthquake and tsunami last year which made the country could not increase thair supply. 

This graph shows the condition after the financial situation become stable again even becomes better than the condition before the financial crisis happened. So is the supply curve before financial crisis and the natural disasters happened and Eo also the equilibrium point before there was not any changes that happened in Japan. So shift leftward become S1 and Eo changes into E1, when the financial crisis and the natural disasters happened which has already explained above. And now there are S2 which the supply curve after Japan’s financial economy going back to normal and even better than before the financial crisis and natural disasters happened. The supply curve is now shift to the right from S1 to S2 while the demand stays constant. This can makes the equilibrium point also changes from E1 to E2. In the new equilibrium point or the E2 point, it shows that the price has decreased but the quantity demanded is increasing even bigger than the quantity demanded in Eo. And according to the article, the car sales has jumped up quite high after the financial crisis is over and when they have already recover from it and also from the natural disasters. This condition matches with with the law of demand which states that the higher rge price of a good the smaller is the quantity demanded and the lower the price of a good the larger is the quantity demanded. 

I think nowadays everyone need cars. Car becomes one of their main priorities. I can see it that everywhere people use car until the traffic jam becomes worse now. Even each house has more than one car. And for some brand such as Toyota, is one of the most brand that people. It means now car is one of normal goods for people. They need it for doing their activities like go to work and they still can buy it. Especially now people can buy a good car that can fulfill their need with affordable price too. So, no wonder they prefer to buy car instead of use the public transportation which means can make the number of car sales rises. Because of that, I think that car is inelastic demand good. People will not change their behavior of buying car although the price is quite high, but I think as long as they can afford it, people will look for it and buy the car. That is one of the reasons the number of car sales 

has jumped up. The car producers also has predicted the number of car sales will keep rising and they will gain a lot of profit from the sales. 

In conclusion, Toyota and Chrysler have experienced the increase of the their products sales especially in truck and car type of vehicles. On the other hand, Ford the rival of Toyota and Chrysler, has experienced a slight decrease of vehicles sales in the amount of 0.1 percent. Ford experienced the decline mostly at the sales of truck vehicles. However Ford small cars sales increased significantly. But three of them believe that their products will achieve higher sales at the future because they see the economy situation in the country is stable so they predict the quantity demanded of the car will increase.