What's Driving The Growth In Auto Sales? AutoNation CEO Answers

Even though the U.S. economy is not growing as fast as was expected, auto sales have been an outlier. Mike Jackson, AutoNation, Inc. AN CEO, was on CNBC to discuss why auto sales are booming and what types of vehicles are seeing strong demand.

All About Trucks, Premium Vehicles And Florida

“I can sum the whole thing up, it’s all about trucks, it’s all about premium luxury cars and Florida is absolutely booming and the industry had a very good month,” Jackson said. “Also, just under 2 percent increase and again if I look at the year-to-date increase for the industry plus 5 percent, trucks are up 11 (percent), car sales are flat.”

He continued, “And to describe the American consumer…Nirvana is a big comfortable truck with a [command] seating position, that drives like a sports car and has all the comforts of a luxury car and has reasonable fuel economy. That’s Nirvana for the American consumer.”

Spending On Big Ticket, But Not Discretionary

Jackson was asked if he thinks that the American consumer is spending is spending as much as he used to before the financial crisis. He replied, “The insight that I would give you is on big ticket items that have a long cycle, the American consumer is stepping up and buying. So, whether it’s housing, auto or other big ticket long-term durable goods, the American consumer is willing to spend on that.”

“On discretionary standing, I think, they are caught between this sense that there savings are not what they thought they would be, they don’t produce any income with interest rates where they are. It devalues the savings they have, so then they think they need more savings and so they are not spending on a discretionary basis,” Jackson concluded.