My annual trip to the New York automobile show took place recently. I have been going to this show since the 1960s, even before I learned to drive, and have only missed one or two shows in all these years. My kids sometimes even act surprised that there were cars as far back as the 60s when I first started attending. For them, this is so long ago that they imagine horsepower had to be measured in terms of real horses in those days.
My interest in the auto show is always two fold. I am a car person, even though I grew up loving mass transit (and without a family car) and am still a tremendous mass transit advocate. And second, as an economist, I know that the automobile industry here and around the globe is a barometer of the economy. Based on what I saw yesterday, the automobile industry is not only a beneficiary of the improving economy, but, given the number of attractive cars available, the industry is also a cause of further economic strengthening.
The crowd yesterday seemed more optimistic and more positive than the crowds at any recent car show. This looked to me to be a buying crowd; fewer teens just looking for something to do and more adults in their prime car buying years. This is not a conclusion based on carefully constructed research; rather this was a gut observation based on years of observation. And the cars on display were responsive to the audience. There were lots of smaller cars, with excellent designs, desirable features, and good gas mileage in addition. And Detroit was as well represented with these cars than were the usual sought after foreign car manufacturers. A beautiful very compact crossover from Buick; a stunning Corvette; a stylish compact from Dodge; a distinguished and very contemporary intermediate from Ford were joined by a new front wheel drive very stylish sedan from Mercedes, more Minis, new VWs, a small BMW crossover; and the usual well styled and designed cars from Japan as well as, in recent years, from South Korea. When I spend as much time looking at Kias as I do looking at cars from the largest American and Japanese representatives, you know the automotive landscape has changed.
The gas mileage numbers have changed as well and this is not just because there are more hybrids and electric cars. Since many cars are smaller, they are inherently more economical. Well regarded long time brands are swapping 6 cylinder engines for 4 cylinder engines. The peppiness seems to remain but the operating cost is reduced. With so many attractive options to choose from, the desire for a new car is enhanced, more cars sold and the economy is helped to move forward faster. From the dark days at the end of the last decade to the impressive results today is testimony first of all the government policy that recognized the importance of the automobile industry and took the necessary steps to keep GM and Chrysler in business. It is also testimony to the US automobile industry that the cars from Ford, GM, and Chrysler are as competitive, attractive, and sophisticated as the major foreign competition. From a major drag on the economy to a major positive force in the economy, kudos to all involved in making this transformation happen. And, to make sure we are never in this position again, keep up the good work and don’t become complacent again. Be thankful for where you are today and do everything possible to keep the momentum growing.