The lowest gasoline prices in four years and improving consumer confidence helped drive auto sales to an annualized pace not seen since 2006 in August . Bobbi Rebell reports.
The latest proof consumers are feeling better about the economy? Sales were soaring like it was 2006, as in pre-recession, at U.S. auto dealers in August- thanks to discounts, and cheaper gas. Pickups and SUV's the hot sellers. Its all about pent-up demand and consumer confidence says Kelley Blue Book's Karl Brauer: SOUNDBITE: KARL BRAUER, SENIOR DIRECTOR, INSIGHTS, KELLEY BLUE BOOK (ENGLISH) SAYING: "They are getting signs that it's ok to buy a new car. Whether its home values, whether its GDP numbers, unemployment figures. It's all coming together to help support these kind of crazy auto sales numbers that we are seeing really for the first time in almost a decade." Auto sales are also an early indicator of consumer demand. The industry accounts for one-fifth of all U.S. retail spending. The easier credit car buyers are getting is also a good sign. Research firm Edmunds.com said August sales were helped by a higher percentage of zero-interest dealer-financed loans. Consumers are also well aware of relatively low cost fuel. Reuters Ben Klayman: SOUNDBITE: BEN KLAYMAN, REUTERS REPORTER (ENGLISH) SAYING: 'We are seeing gas prices at very low levels. We are far away from- the CEO of AutoNation the largest auto dealer in the U.S., Mike Jackson, always talks about the freak out factor for gas prices and if that is in the high $4 to $5 range. We are far from that, and that bodes well for truck and SUV sales which is going to make the US automakers very happy. " Consumers have also been happy about the incentives. The average one up from a year ago- to $2,772 per vehicle- according to research firm TrueCar.com. And though right now the entire industry is benefitting from pent-up demand and an improving economy, Kelley's Brauer believes the pace of sales growth will level off, and automakers will have to be more aggressive about taking market share from each other. SOUNDBITE: KARL BRAUER, SENIOR DIRECTOR, INSIGHTS, KELLEY BLUE BOOK (ENGLISH) SAYING: "You will really see which manufacturers have the most capable and appealing products, and which are the best at marketing them and using the right combination of incentives. So it's going to start to be a little more scrappy out there within the field and within the market and we are going to see a little more of a conflict from each manufacturer fighting with others. " Brauer says Chrysler is the one to watch. Their sales were up 20 percent in August- and the company said its labor day sales were "tremendous".