Increasing Affordability

"In 1973, the average US citizen needed 17.5 weeks of annual family income to buy an average-priced car, a figure that rose to 22.6 weeks by 1995. By 2009, however, the figure had fallen to 19.6 weeks. Standard & Poor’s estimates that this figure will rise in 2010, as the economy improves."

Since the 70's, prices for cars have been increasing, but pay rates have not. Due to a low demand for cars and increased costs of living during the 2008 recession, demand for cars went down, and automakers suffered

Due to increased unemployment and fear of future job loss, consumers are now more frugal than ever. They are also looking for cars that will last. This makes for cutthroat competition between automakers. Also, in times of economic instability, union workers are pushing harder and harder for job security and benefits, which cut into the thin profit margins of auto makers.

I think these factors combined will produce some great cars in the future. In the past we have seen small manufactures emerge with ground-breaking technologies, but I think the ever increasing competition will spur massive development of very high tech vehicles. This is out of necessity, for if automakers do not forge ahead and create innovative products to gain the upper hand, they will lose market share and be sucked up by highly competitive landscape. If automakers cannot offer consumers a cool new product to lure them away from their customers, their competitor's lower selling price will simply be the bottom line when consumers make their choice.

Source: NetAdvantage- Auto Industry