AUTOMOTIVE SALES INDUSTRY

Automotive Sales Industry

Automotive Sales Industry

With regard to the problems that Carmax is undergoing the automotive industry crisis of 2008-2010 was a part of a global financial downturn. The crises affected European and Asian automobile manufacturers, but it was primarily felt in the American automobile manufacturing industry. The downturn also affected Canada by virtue of the Automotive Products Trade Agreement. The automotive industry was weakened by a substantial increase in the prices of automotive fuels linked to the 2009 energy crisis which discouraged purchases of sport utility vehicles (SUVs) and pickup trucks which have low fuel economy.

The popularity and relatively high profit margins of these vehicles had encouraged the American "Big Three" automakers, General Motors, Ford, and Chrysler to make them their primary focus. With fewer fuel-efficient models to offer to consumers, sales began to slide. Car companies from Asia, Europe, North America, and elsewhere have implemented creative marketing strategies to entice reluctant consumers as most experienced double-digit percentage declines in sales. Major manufacturers, including the Big Three and Toyota offered substantial discounts across their lineups. The Big Three faced criticism for their lineups, which were seen to be irresponsible in light of rising fuel prices. North American consumers turned to higher-quality and more fuel-efficient product of Japanese and European automakers. However, many of the vehicles perceived to be foreign were actually "transplants," foreign cars manufactured or assembled in the United States, at lower cost than true imports. Regional representative offices have had to adjust to restructuring at mother companies, American brands have had to handle a brush with near bankruptcy, marketing budgets have been constrained and banks have reined in access to car loans.

Companies have also realized how sensitive the market is to new products, with 2009 models being delivered just as the crisis hit the Gulf, ...