As those of you who have been keeping up with what’s happening in Washington know, the main question on everyone’s mind these days is the “Fiscal Cliff”. Will the 2013 usher in increased income and payroll taxes for Americans? The general consensus in Washington is that preventing tax cuts will hurt the economy for more than just the short term. Going over the cliff – it will mean many more years of slowed growth and a longer road to recovery. To ultimately get back to the pre-recession levels of prosperity, policy makers will have to deal with extending the Bush era policies for the time being. Now that President Obama has been granted a second term, all eyes are on him and he cannot afford to disappoint the public who have put their confidence in him twice over. The time for him to make an impact is now. Realistically speaking, if he misses this opportunity, he might not get another one during his term.
Despite the overall unease on how this will affect the nation’s economic situation, the opinions regarding the future of the automotive industry are mixed. On the one hand, increased taxes will obviously give buyers less to spend on new vehicles. On the other hand, the aging vehicle population (the average age of a U.S. vehicle is currently 11 years), the rising push for higher fuel efficiency, the plethora of available sub compact and hybrid/electric options, and the number of recently lost vehicles in the northeast due to Hurricane Sandy – all seem to indicate that the industry might still be able to hold its own against the weight of the cliff. If the need to purchase or lease new vehicles is high enough it may very well be able to outweigh the impending Fiscal Cliff.
If the industry’s progress this year is any indication of what 2013 will hold we may have more to look forward to than we thought. Although manufacturers such as Ford are consolidating plants and brace for the worst, it’s safe to say that everyone’s goals remain the same. The strategy is still focused on innovation and building superior products. There’s a reason why the industry was bailed out by Washington 4 years ago and that’s because it can’t fail. Millions of jobs depend on its survival and with that sort of a burden to bear, failure is not an option.
Jibbin Abraham is an undergraduate student pursuing a degree in Business and Marketing at Binghamton University. He enjoys following the latest automotive trends and developments in the U.S. as well as abroad and spends his free time reading various auto websites and blogs. His ultimate goal is to pursue a career where he can mesh his passion for business and for cars. Jibbin brings an unique perspective to TFLcar with a passionate eye toward the latest trends and comprehensive, expert and in depth automotive industry analysis.
