As per a new study by the IHS, it has become clear that the Governments across the world played an important part in the recovery of the auto sector across the world. This includes the US, Europe and Asia alike. The massive stimulus packages played an important part in pushing the sales of auto units across the Globe.

If you have had a chance to look at the findings of the paper, then you will do well to understand and appreciate that the grants played most significant part as far as Europe is concerned. It contributed to the 40% sales of the European automotive industry.

China reported 1.5 million vehicles’ sales on account of the subsidies. Behind this report, you will also note a fact that the stimulus packages by major governments succeeded in bringing out the people to spend and invest on new cars and other automotive products. Since, most Governments charge tax on sales of new units, part of this stimulus would have redirected back to the coffers of the Government. Hence it seems more like that the State sponsored people’s buying decisions and also minimized the budgetary deficits by earning the tax on new sales.

While the year 2009 was pretty sluggish for almost all the manufacturers across the Globe and the demand lacked any sort of healthy trend, the economic stimulus seems to have done wonders for the sales in the current year. If you look at the entire scenario from a different perspective, then the Grants allowed people to exercise buying decisions, but the consumer was still restrained in his approach towards investing on new auto products.

It was only when the consumer was reasonably assured of the receding recession and its impact on jobs and businesses, that we say an upswing in the automotive industry from January this year. For the past 5 months, almost all the major automotive companies have made remarkable progress and each manufacturer has reported a double-digit growth in sales over the corresponding period last year. What this essentially means is that the initial boost provided by the Government made the consumer sit-up and this year the consumer actually took action.

On top of this, most global automotive companies have had very liberal financing terms and lease terms for new purchases, thereby making the buying exercise a comfortable financial decision.

Recent turmoil in the European sector may actually still delay the recovery in the automotive sector across the world. While some analysts are not too optimistic of the current credit crisis in Europe, it remains to be seen if the crisis will be limited to Greece or if it will engulf other countries in Europe. In fact, a falling Euro is already putting a lot of pressure on the European economies and there is a strong chance of the Euro failing altogether.

The situation does not seem to be as bad as it used to be in the 2009; however, a thought needs to be spared for the possible impact of varying intensity on the automotive sector, especially the European manufacturers like Volkswagen.

Author Bio: Lisa is an auto-analyst. She is a Shell Card user and suggests using fleet cards for businesses. You could get a business Fuel Card to save on fuel costs and better cost control as far as fleet budgeting is concerned.

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