DEFINITION of 'Auto Sales'

Auto sales refers to the number of cars sold in the United States, although some statistical reports include sales of light trucks as well. The automobile companies report their car sales at the beginning of each month, and the U.S. Department of Commerce reports overall auto and light truck sales on a seasonally adjusted annual basis later in the month. The financial markets closely watch both sets of data.


Auto sales are an important indicator of the strength of the U.S. economy. The results in the Commerce Department's monthly report are also incorporated into the government's quarterly report on the Gross Domestic Product.


The automobile industry is a major component of the U.S. economy. Production has long been dominated by the "big three" of General Motors, Ford and what is now known as Fiat/Chrysler. Japanese car companies began to make strong inroads in the U.S. market following the 1973 OPEC oil embargo, which pushed oil prices from $3 to $12 per barrel. The resultant increase in gas prices made the smaller and more efficient cars from Toyota, Honda and Nissan attractive in the U.S. market for the first time. In 1982, Honda became the first Japanese manufacturer to open a plant in the United States. Toyota and Nissan soon followed, and by 2014, 70% of Japanese companies' vehicles sold in the United States were built at these plants. Korean and European manufacturers have joined them.

2008 Collapse and Bailout

In the aftermath of the bankruptcy of Lehman Brothers and the stock market collapse in the fall of 2008, GM and Chrysler were both on the verge of insolvency. Car sales had been in decline since the housing market skid began the previous summer and caused a sharp slowdown in consumer spending. Credit was drying up as well. Ford had lined up sufficient lines of credit of its own in order to survive, but the federal government stepped in to bail out the other two companies, with a package that eventually totally close to $80 billion. Fiat eventually bought Chrysler, and the U.S. government effectively owned GM until December 2014.

Auto sales fell sharply from an annual rate of 16.08 million in 2007 to a 30-year low of 10.4 million in 2009. By 2015, annual sales had rebounded to equal the all-time high of 17.3 million, set in 2000.

Economic Importance

The automotive industry is broadly defined to include dealerships and parts suppliers, in addition to vehicle manufacturing. The industry as a whole represents an estimated 3 to 3.5% of total U.S. gross domestic product in any given year.

  1. Motor Vehicle Sales

    The number of domestically produced units of cars, SUVs, mini-vans ...
  2. Auto Industry ETF

    An exchange-traded fund (ETF) that invests specifically in the ...
  3. Selling Out Of Trust

    A term commonly used in the automobile industry to refer to the ...
  4. Bailout

    A situation in which a business, individual or government offers ...
  5. Just In Time - JIT

    An inventory strategy companies employ to increase efficiency ...
  6. Auto Supplier Support Program (Auto ...

    This is a $5 billion program funded by the U.S. Treasury intended ...
Related Articles
  1. Personal Finance

    How The U.S. Automobile Industry Has Changed

    We give a brief history lesson on the rise and fall of the American auto industry.
  2. Investing

    Top 5 Automobile Stocks of 2016

    Low rates, cheap gas, available credit and an improving economy should drive sales for these five industry leaders in 2012-'17.
  3. Insights

    Most Profitable Automobile Companies of 2016 (HMC, TM)

    There are only four really profitable automobile companies in 2016 as the market has not supported prices despite a projection of near record sales.
  4. Investing

    Automaker Stocks: Are These 2016's Best?

    Auto sales have been on fire, but auto stocks have not. What is 2016 likely to hold?
  5. Small Business

    Chrysler And The 1979 Bailout

    This American icon almost went under, but the U.S. government refused to let it fail.
  6. Insights

    Most Profitable Auto Companies of 2016 (TM, GM)

    Coming off a six-year boom in the the auto industry, five stalwarts have remained among the most profitable auto companies around the globe.
  7. Insights

    6 Countries That Produce the Most Cars

    With over 90 million cars manufactured in 2015, the automobile industry is a massive global market led by six countries.
  8. Investing

    Auto Sales Slump In January

    GM, Ford, and Fiat Chrysler see a slow start to 2017.
  9. Investing

    Is the Used Car Industry in Trouble?

    Usually, if new car sales go down, it's good news for used cars. Not this time.
  10. Investing

    GM's First-Quarter Auto Sales in China Dwindle

    GM said first-quarter China sales dropped due to a change in the government's tax policy.
  1. What is the automotive sector?

    Explore the automotive sector, which includes manufacturers, retailers, wholesalers and original equipment manufacturers, ... Read Answer >>
  2. What impact will growth in the emerging markets have on automotive sector?

    Learn about the automotive industry in emerging market nations and the prospects for growth in the auto industry in these ... Read Answer >>
  3. To what extent has global competition affected the profitability of U.S. car manufacturers?

    Learn more about the Big Three automakers and how global competition from foreign car manufacturers impacts profitability ... Read Answer >>
  4. What economic indicators are important for investing in the automotive sector?

    Discover the most important economic indicators when investing in the automotive sector: auto sales, unemployment and consumer ... Read Answer >>
  5. What does it mean when someone refers to the "Big Three" automobile sector?

    Learn which companies make up the Big Three. Learn what role the Big Three plays in the American economy, from bailouts to ... Read Answer >>
  6. Who are Honda's (HMC) main suppliers?

    Discover some companies that serve as primary automotive parts suppliers for the Honda Motor Co. and what they supply. Read Answer >>
Hot Definitions
  1. Call Option

    An agreement that gives an investor the right (but not the obligation) to buy a stock, bond, commodity, or other instrument ...
  2. Standard Deviation

    A measure of the dispersion of a set of data from its mean, calculated as the square root of the variance. The more spread ...
  3. Entrepreneur

    An entrepreneur is an individual who founds and runs a small business and assumes all the risk and reward of the venture.
  4. Money Market

    The money market is a segment of the financial market in which financial instruments with high liquidity and very short maturities ...
  5. Perfect Competition

    Pure or perfect competition is a theoretical market structure in which a number of criteria such as perfect information and ...
  6. Compound Interest

    Compound Interest is interest calculated on the initial principal and also on the accumulated interest of previous periods ...
Trading Center