California new car sales increase 10% in 2011

That follows a 13.1 percent increase the year before, according to the California New Car Dealers Association. This year, the group expects a gain of 8.5 percent. The results are a big improvement over the deadly period in 2008 and 2009, although they're still well below pre-recession levels. Registrations this year should approach 1.4 million units, which compares with an average of 2 million units between 2000 and 2006. In L.A. and OC, the 2011 sales increase (excluding fleet sales) was 12.2 percent. Biggest sales gain in the state by make: Kia, followed by Jeep and Hyundai. The basic explanation behind the increase is an improving economy coupled with pent-up demand. But there's something else going on that should give the industry pause: People are holding onto their cars much longer than ever before. From the Detroit News:

Between 2008 and 2011, analysts estimate Americans bought about 10 million fewer cars than if the economy had been stronger. But a sour economy is not the only thing at work: Modern cars as a whole are more reliable than ever, with many running strong at 200,000 miles or more. As a result, automakers say millions of Americans have postponed buying a new car.


David Cole, chairman emeritus of the Center for Automotive Research, says one reason Americans are holding on to cars longer is that they are better made. "The old days of vehicles rusting our after four or five years are gone. Cars are so much better made in order to compete in the market," Cole said. At the same time, Americans have cut back on driving. Americans drove 36 billion fewer miles in the first 10 months of 2011, down 1.4 percent.

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Mark Lacter
Mark Lacter created the LA Biz Observed blog in 2006. He posted until the day before his death on Nov. 13, 2013.
Mark Lacter, business writer and editor was 59
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