A recent report from the research department of Íslandsbanki observes that robust sales in automobiles have often been a good indicator of a peak in the economic cycle. In the first six months of the year, 9,687 new automobiles were sold in Iceland, more than all the new automobiles that were sold year in 2001 and 2002 combined. This is just a little less than the sales for the entire year 2003. Sales increased 51% compared to the first six months last year. If the trend continues, the year 2005 will be a record year in the sales of automobiles – surpassing the figures of the expansion year 1987.
A “great increase in salaries and property, a strong Icelandic króna (ISK), increased availability of capital, coupled with demand for the renewals of vehicles stimulates the increase in automobile sales” said Íslandsbanki. According to Íslandsbanki, the financial condition of Icelandic households is rather strong. Not only has demand for automobiles increased but demand for the expensive models is greater than the demand for the less expensive models.