WASHINGTON -- It's not too much of an exaggeration to say the U.S. economy was powered by car sales in 2012.
Auto companies are now expected to have sold 14.5 million new vehicles in 2012, according to Kelley Blue Book. That's a 13 percent rise over last year and the highest number of sales since the financial crisis hit.
If cars hadn't been flying out of dealerships, the year would have looked considerably bleaker. Vehicle purchases by consumers alone accounted for roughly 30 percent of all economic growth in the first half of the year, according to Credit Suisse.
And what made this car-buying frenzy so striking is that 2012 also happened to be a terrible year for car recalls. As auto analyst Jim Gorzelany reports, automakers had to recall some 14.3 million vehicles over the past year because of various defects -- everything from steering issues to power-window problems.
But that didn't slow down car sales one bit. Indeed, as Gorzelany explains, Toyota and Honda had to issue the greatest number of recalls in 2012 -- Toyota with 5 million, Honda with nearly 3.4 million. Yet both companies increased their market share this year: Toyota's sales were up some 17.3 percent over last year, while Honda's were up nearly 25 percent.
General Motors had to recall 1.3 million vehicles. Ford had to recall 1.1 million. Just about every major car company had to issue at least one recall this year. But Americans kept buying up cars en masse anyway.
Why is that? One theory is that consumers can't really afford not to buy cars at this point. Back in January, the typical car on the road was a record 10.8 years old.
If so, that's relatively good news for 2013. Despite the strong sales, the average age of cars on the road has now risen to just over 11 years old. That's one reason why many analysts predict the auto industry will keep growing next year and keep bolstering the U.S. economy. And at this point, it seems like very little - not the "fiscal cliff," not a spate of recalls - can slow things down.