Chapter 2 – Supply and Demand – Canadian car sales

http://www.cbc.ca/consumer/story/2008/10/14/cars.html

Summary:
Automobile sales in Canada dropped in August, August is the third month in a row that the country has seen fewer cars and trucks sold. According to statistics Canada, 137 937 vehicles were sold by Dealerships in August. A drop of 2.3% compared to July. Other cars, like passenger cars, slid 4.2% in the month, to 73 484 vehicles. Entirely responsible for the fall of sales down 6.8% in August was the North American build cars. The article states that sales of new cars and trucks fell 0.8% in July and 1% in June compared to the month before. The cause of these sales is most likely caused by the rising oil prices combined with the heightened economic uncertainty factor.

Connections:
The concept of supply and demand is when manufacturers and consumers connect and communicate to establish a supply and demand market. The car manufacturers are producing cars, but consumers are not willing to purchase any more cars from them. External factors like rising oil prices and environment concerns are influencing the consumers. Consumer characteristics and income also highly affect consumers of cars. Therefore, the sales of automobiles in Canada dropped because mainly overseas car manufacturers are in more of a demand than North American cars. Mainly, the external effects of high oil prices affect the expectations of future outcomes and characteristics of buyers and consumers.

Reflection:
The sales of automobiles certainly reflect on the world’s current economic situation. I understand that oil and gas prices is a very hot topic today in the market, I think that automobile sales would certainly drop in demand because buyers are more concerned about lowering their daily spending. As for myself, I would preferably look for a convenient and fuel efficient vehicle instead of a heavy duty gas guzzler. I think that preferences and characteristics of buyers and consumers have a big say on this issue. Although automobiles are a necessity to many people, people tend to minimize fuel consumption to try to save money on other things, and help the environment while they are at it.