J.D. Power and Associates, a major analyst of the automotive industry, reports that U.S. car sales have grown at a "robust" pace since October and that December sales were "strong." J.D. Power predicts that 10.4 million units will be sold by the end of 2009. It predicts 2010 sales of 11.5 million units.
"While the industry hasn't yet received a clean bill of health, fixed costs have been trimmed at all levels, allowing for profitability-even at a reduced selling rate," said Jeff Schuster, executive director of global forecasting at J.D. Power and Associates. "The industry has an opportunity in 2010 to build on a series of small victories-such as improved pricing and appropriate inventory levels-to drive a stronger recovery."
J. D. Power: Auto Sales Jump
I watch all of the analysts projecting results for the 2010 midterm elections, but there are few things that could skew those results more than a rebound in the domestic auto industry.
One of Obama's potentially problematic constituencies is the industrial Midwest. Unemployment has hammered this area of the country. The good times of the 80s and 90s are not likely to return. However, it now seems increasingly likely that Obama will be able to campaign in this region on the fact that he saved the domestic auto companies from oblivion - prepackaged bankruptcies - and helped support them until sustainable sales returned.
Of course, this also could have significance for the debt problem. If the auto industry rebounds and the U.S. Treasury can sell shares of GM at a good price, the taxpayer hit for the auto bailout will be decreased.
This could be the light at the end of the tunnel. And if it is, this period of low Obama approval ratings will be just a blip on the screen.