Economists are offering good news as we head into the holiday season: the economy is showing some signs of a rebound, especially in retail and the manufacturing sector.

The automotive industry is seeing surprising—but strong—increases in business as we head into late 2011. It turns out consumers, after years of sticking with what they have, are ready for an upgrade and are turning to new cars rather than used vehicles. After a slumping economy, consumers are ready to put what little they’ve saved toward an economical investment: new cars are safer and can save owners money on gas and maintenance costs.

Car manufacturers should be ready to respond: dealers are reporting increased sales of new cars off the lot as of last month, and economists suggest that this increased demand is not going to cool soon.

Automotive manufacturers are also reporting increased demand for—and production of—hybrid vehicles that will offer consumers the maximum savings when it comes to fuel economy. Hybrid giants like Toyota are upping their game. Toyota recently announced that it will be expanding production of its hybrid line, with a brand new research and development facility. Nissan also announced that it will be investing in the production of new hybrids, aiming for a 35% increase in efficiency by 2015.

These trends are good for the manufacturing sector, which benefits broadly when the production of complex products like cars expands because of the variety and amount of parts needed to supply the automobile industry. The trends are also good for consumers, who will see the effects of a healthier economy and perhaps have the opportunity to enjoy a new vehicle that will afford them additional cost-savings.