Automakers look with worry at the tanking European market, but have great hopes for an advancing American. Not so fast, says Mike Jackson, CEO of AutoNation Inc. He sees a day of reckoning follow a few years of good auto sales.
“There is a day of reckoning coming for the U.S. economy and for America,” Jackson said at a J.D. Power conference in Orlando, with Reuters taking notes.
From 2004 to 2007, Jackson warned that automakers must stop producing too many cars, sold with generous consumer incentives and easy credit. In 2009, the U.S. auto market dropped to 28-year low after more than 10 years of sales that had averaged nearly 17 million. Now, he is warning of carpocalypse II.
Jackson said the federal monetary policies of low-interest rates and sharp increases in the balance sheet of the U.S. Federal Reserve are two major stimulus efforts that may come back to haunt American consumers.
Lacey Plache, chief economist for Edmunds.com, agreed with Jackson’s assessment, but like Jackson said it was difficult to peg the timing of the hit to the U.S. economy.