Domestic Auto-Makers Gain Market Share

The biggest news about domestic auto sales for the month of April (released on Friday, May 1st) was not the year-to-year declines for each brand – no surprise given the depth of the reception – but the fact that domestic auto-makers regained significant share of the domestic market in April. 

While sales of domestically-made autos held steady at 6.9 million units, matching sales in March, sales of imports fell from 2.9 to 2.5 million units.  So domestic auto-makers regained 3% of the market share, rising from 70.4% to 73.4%.  That’s a huge gain for one month!  Another way of looking at this is that the jobs required to build 400,000 vehicles – roughly 135,000 jobs – were maintained while the same number of workers in Japan, Korea, Mexico and Germany got laid off. 

Another way to look at it is that our trade deficit for the month of April will be $10 billion lower than it would have been otherwise if it were the sales of American cars that took the hit.  It’s impossible to overstate the significance of this for the American economy.  It’s this kind of thing and not so much any government stimulus plan that’s going to produce a real economic rebound. 

The question is why.  Why are people beginning to shun imports in favor of American cars?  There’s been no change in pricing.  The imports are cutting profit margin to the bone just like the domestics to prop up sales.  The only real explanation is that Americans may be starting to see the light – the connection between domestic manufacturing and the stability of their own jobs; the connection between our trade imbalance and the collapse of our economy. 

It’s too early to say this is a trend as opposed to a one-month blip.   But I’ll take good news anywhere I can find it these days.

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