By on May 14, 2013
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Happy days are here again!

April new car sales were up 9% from April 2012; which doesn’t sound like all that much until you realize that the winning brands beat losing brands by a near 5 to 1 margin.

As for used cars sales, they are even better. Official stats for the used car market are always hit or miss. But with large dealer networks such as Sonic Automotive, Carmax, Group One, and Asbury Automotive all recording double digit used car sales growth, it’s safe to say that the overall market for late model vehicles remains healthy.

And for all that good fortune, you can thank one overwhelming force in today’s marketplace.

The stock market.

The S&P 500 returned over 13% in 2012, while the NASDAQ Composite returned nearly 16%. As of 2013, both of these broad indices have already offered comparable returns for what amounts to only four and a half months of market activity. The S&P is up 14.5% from January 1st while the NASADAQ has registered a 13.9% gain.

Now the naysayers among you may only consider these returns as a minor sixteen month flash in a sea of chronic unemployment and low GDP growth. Fair enough. That is a fair assessment if we are talking about the broad overall economy.

But the average American is not a frequent buyer when it comes to new or even late model cars. In a land of nearly 200 million licensed drivers and just over 15 million new car buyers a year, there are only so many people who have the means to spend what amounts to $31,356 on average for a new car. Or even half that amount, $15,800, which coincidentally happens to be the average pre-tax and bogus dealer fee price for a four-cylinder 2011 Camry LE with 38,000 miles according to Manheim Auctions.

So never mind those stats. Who is buying those cars?

Older people for the most part. The average age for a new car buyer has increased dramatically from 43 years old in 2007 to 52 years old in 2012. This contrasts with a painful contraction of a nearly 30% decline for 18 to 34 year old buyers, and a 25% decline for the 35 to 44 year old group according to Lacey Plache of Edmunds.com

Late model cars are harder to track. So I will admit my perspective on that side of the market is only limited by the guys I converse with at the auctions every week.

According to a lot of the professional buyers and used car franchise operators at these sales, the young are widely considered to be the ‘gawkers’. While the older folks are coming with spouse, and sometimes even well aged kids of their own, to put a sizable amount of money down on an expensive car.   

And why are older people buying those cars (and trucks)? Not just because they have the money. But because they now have the confidence to take what is often a $30k+ plunge in overall wealth.

Let’s look a bit closer into the recent rear view mirror that are the S&P 500 and the NASDAQ Composite. Specifically, there are three recent facts about these broad investment indices, that reflect a steady change in the confidence level of the older new car buyer. 

  • Both of these broad indices are up substantially from their pre-recession January 2008 numbers (S&P 11%, NASDAQ 29%). A lot of folks who were able to buy and hold throughout this period now have even more money than before the sub-prime mortgage crisis. 
  • From 2009 thru 2012, both indices registered double digit annual growth for the entire time period with the exception all years except for 2011. 
  • That sole losing year only generated a net loss of .003% for the S&P 500 and 1.8% for the NASDAQ Composite. In otherwords, they were very small hiccups in what is now emerging as a five year period where annual market returns are finally becoming steady and healthy again.

Not a lot of people have the means to take that deep breath of patience needed to stomach the volatility that comes with a severe economic crisis. Pensioners rarely have a choice, while those with 401k plans have far better investing flexibility.

But guess who is winning?

Nearly everyone who has invested in domestic stocks, virtually all domestic bond fund investors, the overwhelming majority of dividend focused investors, international indices speculators of varying types. Even those fortunate souls who have the means to invest their free capital into a personal business are finding sustainable gains.

Those who have the money, are now making even more money.

If you make enough money over a long-term period, perhaps enough to erase your gains and secure your return, you may just decide to reward yourself with an expensive car.

This is what now drives sales for new cars and late model vehicles. At least until the job market recovers.

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51 Comments on “The Car Sales Comeback...”


  • avatar
    thelaine

    Thank you, young people, for transferring your future wealth to your elders.

    • 0 avatar
      SherbornSean

      thelaine,
      I think you mean: “thank you, young people, for not voting, allowing you elders to take your current and future wealth”

      • 0 avatar
        danio3834

        “thank you, young people, for not voting, allowing you elders to take your current and future wealth”.

        This right here. As someone who is loosely involved in politics, I can tell you it is virtually impossible to get elected or pass any legislation that is percieved to take anything away from the 55+ crowd.

        While those of us who are younger outnumber them, they beat us solidly 2:1 at the polls.

        • 0 avatar
          28-Cars-Later

          I tend to agree, strange as the phenomenon may be. So who is more at fault, the 55+ crowd heading for the cliff, or the sub-40 crowd sitting in the passenger seat not grabbing the wheel?

          • 0 avatar
            CJinSD

            Am I missing something? The ones that voted did so for the party of infinite borrowing and 30 million replacement workers to pay for baby boomer benefits.

          • 0 avatar
            28-Cars-Later

            So the latter then. I won’t disagree although I didn’t cast my vote for the communists.

          • 0 avatar
            highdesertcat

            That is just because “the majority rules”.

            It doesn’t mean that there aren’t a bunch of people with decent paying jobs who hate to see all their blood, sweat and tears go to DC in taxes to keep the freeloaders living the life of comfort and leisure.

            Or, as some guy already wrote elsewhere, “money for nuttin’ and foodstamps for free.”

            When I saw that line I knew that the author of that line had hit the nail right on the head.

            People who paid their dues are entitled to everything they worked for. But there are a great number of people who never worked a day in their life, sucking on the government teat. Many of them just since Obama took office.

            Some of the better paid taxpayers must experience the old axiom of “the faster I run, the further behind I get!”

            Again, in America it isn’t about how much you get paid. It’s all about how much you get to keep.

            As long as the majority votes for handouts and freebies, there will never be enough money in the kitty to pay the bills, no matter how many immigrants we import or grant amnesty to.

      • 0 avatar
        corntrollio

        Exactly, the Baby Boomer generation has gotten a lot more benefits than many other generations — as I’ve mentioned, cheap education, cheap housing, in many cases jobs with pensions and health benefits through the pension years, and a 25 year stock market boom through their prime earning years. It all came at the expense of future generations.

      • 0 avatar
        thelaine

        No, that is not what I mean sherborn. Young people vote overwhelmingly for politicians on the left, who maintain and expand the entitlements and social welfare state, which ultimately crushes economic opportunity and drowns itself in debt. Older folks have gotten all the benefits and will die before the music stops in this country. Young people are just getting punked by the welfare state. Ask the young in Europe how it all turns out. Leftism is not rebellion, it is conformism and the young have been well and truly duped.

  • avatar
    JD23

    Thank you, Uncle Ben. It will be interesting to see what happens to auto sales when the Fed unwinds its bond purchases and asset values undergo a “correction”.

    • 0 avatar
      hreardon

      JD23 -

      Secret tip: it ain’t gonna happen anytime soon. The Fed knows that once they allow rates to tick up, even slightly, the housing recovery will crash and defaults on all types of debt will start to soar.

      It’s the sad reality of an economy that has become based entirely on credit.

  • avatar
    Ubermensch

    “Those who have the money, are now making even more money.”

    Natch

    http://www2.ucsc.edu/whorulesamerica/power/wealth.html

    • 0 avatar
      redav

      Those who have the money have always made even more money. That is nothing new nor a surprise. Also, those who have the money have always been the ones who buy (the most and most expensive) stuff.

      • 0 avatar
        dolorean

        @redav, you’re correct in your assumption; however, its the level of how much of that money. Used to be more sustainable to the middle class versus what we have now. Check the % differences of the uber wealthy of the ’50s versus today’s Gilded Age lofty peak.

      • 0 avatar
        SoCalMikester

        raising the minimum wage would put even more money back into the economy, because all that money gets spent.

        those that have the money tend to save it, reinvest in securities, or park it in offshore tax havens.

        its the working poor that buy the most “stuff”

        • 0 avatar
          Lorenzo

          Raising the minimum wage will increase unemployment among the young and unskilled, who can’t earn the extra pay, creating a bigger drag on the economy. Making employers pay their employees more money is a favorite of people who don’t know basic economics, and see nothing wrong with spending other peoples’ money.

  • avatar
    krhodes1

    There is nothing like the combination of crazily low interest rates and good stock market returns to allow a bit of automotive splurging. I have certainly taken advantage of the spread to leave my money in the market and buy a couple cars while the interest rates are in the “free money” range. And made sure the mortgage on the shack is locked below 3%.

    My Grandparents are of the age where they HAD to take distributions during the downturn, but the old man being a sharp cookie used that money to buy stock and has done pretty well with it. But luckily they did not need it to live on. There is nothing worse than having to realize a paper loss that would go away if you could just leave it alone for long enough.

    • 0 avatar
      redav

      Returns from after the crash in ’08 to today are phenomenal. For my own investments, lost earnings were recouped by mid 2010 and have continued to be strong since.

      I’m one of those who put money in the market specifically for a new car, and the returns have drastically outperformed my expectations. The only thing holding me back now is finding exactly what I want now (there always seems to be something I think I want more coming out in a few months) and indecision on what to do with my current cars.

      But I still believe a large factor in car buying trends has to be the increased quality of cars and how they last longer. That has to have a strong effect on what/when people buy.

      • 0 avatar
        28-Cars-Later

        What have you been buying?

        • 0 avatar
          DeadWeight

          Returns from the lows in 2009, in a low volume, heavily massaged, lack of retail participation market, have indeed been phenomenal.

          Returns over the last 17 years, adjusting for inflation and survivorship bias, and not even including fees nor adverse tax consequences from churn and burn, are a big zero – scratch that – they’re actually negative.

          If only investors could buy the bottoms and sell the tops that the street puts in, rather than doing the opposite, they wouldn’t need a massive fortune to end up with a much smaller one.

      • 0 avatar
        corntrollio

        “Returns from after the crash in ’08 to today are phenomenal. For my own investments, lost earnings were recouped by mid 2010 and have continued to be strong since.”

        Agreed. There are long-term investments I made a little before the peak (I sold some investments then, booked some gains, and also reallocated things) that are now a decent amount above what they were at the peak. I rode out the losses in 2008, since they were long-term investments, and I didn’t care how they were doing in 2008 — I care how they’re doing in 2048.

        In addition, I started substantially increasing investment amounts beginning in Q2 of 2009, and that has paid off well. That’s basically good luck in timing, just like the amounts invested just before peak were bad luck in timing.

        I don’t assume I can beat the market. Even if you do it as a full-time job, as it is for institutional investors and analysts, it’s arrogant to think you can always beat the market. Just ask John Paulson. Or rather, ask his hedge fund clients — Paulson himself is getting fat fees for doing poorly right now, and his clients must be pissed.

  • avatar
    skor

    “Now the naysayers among you may only consider these returns as a minor sixteen month flash in a sea of chronic unemployment and low GDP growth. Fair enough. That is a fair assessment if we are talking about the broad overall economy.”

    The chronic unemployment is what the Fed’s primary concern should because, if it’s not addressed soon, we’re going to have an entire generation that’s lost with nothing to hope for save mom and dad dying before they’ve burned through all their cash.

    • 0 avatar
      bikegoesbaa

      I submit that 10% unemployment or thereabouts is here to stay.

      Think of the bottom 10% of your high school class. Do you want to hire them to do anything?

      Well, neither does anybody else.

      Don’t think about it as a problem to be solved, but rather a condition to be managed.

      • 0 avatar
        skor

        How many unemployed people do you know? I know quite a few, most are college grads.

        Of course it’s their fault. They went to the wrong college, studied the wrong subjects, blah, blah….

        • 0 avatar
          bikegoesbaa

          I think maybe I didn’t explain my point very well.

          In any field or geographical area there is going to be a group that’s significantly below average. This applies to doctors just as much as it does fry cooks.

          The labor market is more competitive and employers are more selective than they were in the past. Additionally, more jobs require specific skills and experience beyond “show up on time and follow simple instructions”: the automation of both farm and manufacturing tasks has greatly reduced the demand for unskilled general labor type jobs.

          Under these circumstances, why would you expect the bottom ~10% of any given field or labor pool to remain reliably employed?

          My point is not anything along the lines of “it’s their own fault so forget about ‘em”.

          My point is that it may make more sense that there are valid reasons for 10% unemployment or thereabouts to be considered “normal” and it may make more sense to take care of people and mitigate the effects of their difficulty finding work than to try to get them into jobs that likely do not actually exist or that they are not likely to ever be qualified for.

      • 0 avatar
        corntrollio

        Well, there’s also underemployment — e.g. people who were working more hours or making more money prior to the Great Recession, but haven’t fully gotten back up to that. That’s more common than you might think, although many people have gotten back up to par by now.

        A lot of the poop hasn’t really worked its way through the system. I have some friends who overpaid for houses at the top of the boom that were completely impractical for their future plans and are pretty much stuck in them. I have a few who didn’t submit winning bids, and they are damn happy they “lost” the auction. The housing market is very strange right now, with very few organic sales, and a lot more purchases by investors than normal. Until the move-up market is as robust as it should be, we won’t be back to normal.

        • 0 avatar
          28-Cars-Later

          I agree, but I don’t think that will happen until they stop ZIRPing, which may be effectively never.

          Too much money floating around being doled out too easily, driven housing prices at least 30% this year alone in these parts.

      • 0 avatar
        DeadWeight

        A far more accurate method of judging the true health (or infirmity) of the U.S. employment market, given that the Bureau of Labor Statistics so thoroughly underreports the actual unemployment AND underemployment rates, is to dial in on the labor participation rate for those able bodied adults between the ages of 18 and 56 (a traditionally useful age range to deduce how far or close to the deemed rate of full employment we are or not).

        By the labor participation rate standard, approximately 63% of 18 to 56 year olds not deemed disabled are working in anything that can be remotely considered to be full time capacity, which rivals the darkest days of the epic economic woes of the 1979 to 1983 period, and by a few other measures (e.g. Real wages, the number of working age individuals receiving disability payments, EBT/SNAP, extended unemployment insurance benefits, the number of people proclaiming themselves as self-employed or of independent contractor status, etc.), our labor market is in far more dire straits than back then.

        Even if one were to use the metric officially used to measure unemployment while Reagan was POTUS, and use that same metric to measure unemployment today, the rate would exceed 11% (while the broader U6 metric to measure underemployment plus unemployment would report a rate approaching 16%).

        Then, there’s that whole other issue of declining real wages and jobs carrying far fewer, if any, benefits than in the past.

        Temp & contract employment is on a roll, though.

  • avatar
    DeadWeight

    This article is pretty incredible in terms of stating a superficial case as to cause & effects (hint: correlation doesn’t equal causation, no matter how many ANECDOTES the author cites), and in implying that there’s going to be a “new normal” in terms of auto buying habits in the United States, all predicated (at least implicitly) on the premise that “[s]tock prices have reached what looks like a permanently high plateau” (famous words of Irving Fisher in 1929).

    What I find incredible about articles such as these, Steve, is that you’re not only not citing a credible, data rich case for your claims that the rally in equity markets since the 2009 lows (regardless as to the cause; i.e. whether based more on fundamentals versus more on interventionist monetary/central bank policies such as ZIRP and QE), but while not making that credible data rich case, you’re selling the notion that (you apparently also personally “bought into”) a sustainable economic recovery, and lasting upwardly bound consumer spending cycle can be premised on the performance of equity markets, rather than REAL economic trends, patterns and developments.

    If this were the case (let’s suspend any notion that equity markets are very poor prognosticators, let alone foundations, of real economic activity and patterns, for theoretical purposes), we could just have the U.S. Treasury Department borrow a trillion+ USD per year – an amount that would have to increase with each successive year, however – and shovel it directly into equity markets to buy stocks like Facebook, Lululemon and Group On.

    Oh, and the government would then be expressly backstopping the equity markets by central decree, and everyone on the planet could plow their savings & borrowings into the equity markets, with comfortable assurances that they’re all going to be fabulously rich (which is an oxymoron, since wealth is relative).

    Let’s get real: Some people may be buying cars because of the equity market big bounce, but they’re an INCREDIBLY small minority of actual buyers.

    The economy truly sucks, the savings rate (whether cash, bonds, equities, etc.) of the vast majority of Americans is astonishingly low, 95%+ of vehicle purchases are financed over increasingly longer timelines, and the equity market bounce has been a heavily “helped” one that’s more reflective of government and federal reserve intervention that is anything but guaranteed to last.

    The auto market has recovered, at least up until now, because of pre or not pre-packaged bankruptcies of automakers and suppliers (wiping out legacy and other costs), consumer credit that’s flowing again, even to the least credit worthy buyers, pent up demand (due to the advanced age of the average automobile on U.S. roads) AND ANOTHER MASSIVE DEBT RE-LEVERAGING UP CYCLE WE’RE ALREADY NOW 4+ YEARS INTO.

    I am confident people will challenge me on the consumer debt/releveraging issue, but if you take the time to research it even briefly, you’ll discover consumer debt is, as of now, as in circa-2013, as in POST GREAT RECESSION (supposedly), at an all time high, surpassing the levels it was at in 2007.

    This article is severely lacking in proofs, and yet leaps into some simply incredible and all-encompassing misstatements about equity markets, the cause-effect correlation between equity markets and consumer purchases, and the entire correlation between a bounce in the equity markets and the actual health of the consumer and the U.S. economy (let alone the U.S. Government balance sheet).

    Now that the equity markets have rallied the most in the least amount of time in terms of the 4th largest “pop” in history based on trillions in monetary (and fiscal) stimulus, there’s never been a better time to jump into those warm churning waters, so go forth and “buy stocks” with your savings/earnings and even on margin, everyone, and if you don’t become wealthy enough to fill Jay Leno’s garage with a genuinely impressive fleet of le automotive creme de la creme, or worse yet, if you – gasp – lose money “speculating” (the horrors), don’t blame Steve Lang…he’s just repeating what CNBC, Alan Greenspan, Ben Bernanke and your “stawk broker” and/or the e*trade baby want you to believe.

    • 0 avatar
      skor

      Are you saying that real wealth is created by the production of useful goods and services? Hmmmmmm, I am intrigued by your ideas and would like to subscribe to your newsletter.

      • 0 avatar
        JD23

        That is a dubious claim at best. Real wealth is generated by creating currency out of thin air, using it to purchase bonds, with that currency used to purchase stocks and other assets in the search for returns that can exceed inflation.

        • 0 avatar
          28-Cars-Later

          and so the circle of debt continues…

          • 0 avatar
            DeadWeight

            It “circles the drain,” as they say.

            A house built upon pillars of debt…

            …well, it’s ultimately going to get swept away in one manner or another…

          • 0 avatar
            28-Cars-Later

            Where do you see the country in 20 years? I see a very regionalized US, possibly as sovereign states, after the tidal wave as it were. I don’t see a youth uprising or popular revolt as some have forecast. In Europe I could see a revolt of some kind.

      • 0 avatar
        28-Cars-Later

        +1 for the Homer reference

    • 0 avatar
      Steven Lang

      1) Where in this article did I ever refer to a sustainable economic recovery?

      As for proofs, you do realize that financial prosperity and stability for any given population eventually leads to greater consumer confidence for that group.

      I am simply arguing that this perception, which is primarily driven by the stability and growth of personal savings for the affluent among us, is leading to greater consumption of new and late model automobiles.

      Don’t like it? So be it.

      There is no great leap of faith here or even a political bent. Historically, people who have a sound level of savings and believe their fortunes will grow are more willing, on average, to spend their money. This is a simple idea.

      2) Typing in all caps does not make your points any more interesting or truthful.

      Feel free to disagree with me. But keep in mind that no one likes to have a discussion with someone who shouts or demonizes them.

      You do realize that I’m also the guy who has been ringing the bell about the dangers of sub-prime lending practices and the long-term effects it will have on our fiscal health. To be brutally blunt, I do hear what you are saying. But at this point, there are far more dynamics taking place in the car buying business than the sub-prime market.

      In fact I think the pendulum will gradually swing back towards the prime segment of the market starting in Q1 2014. But that’s a topic for another article down the road.

      3) The points in this article are obvious. If you want to argue about quantitative easing and the neverending printing of our currency, feel free to do so. But that’s a small piece of the greater issue which is that this recent run in automotive sales reflects a gradual shift in who typically ends up buying a new vehicle.

      I believe that a long-term period where the equity markets stabilize and improve on their prior highs has lead to higher consumer confidence for the affluent. They buy more cars. Pure and simple. Sub-prime lending is taking care of a lot of the lending needs these days in the car market. But prime and super-prime consumers are still driving up sales as well.

      • 0 avatar
        DeadWeight

        Unless I’m seeing things, you’ve massively edited and added to your original essay, but nonetheless;

        “This is what now drives sales for new cars and late model vehicles.”

        I am not “demonizing” you in any way. I’m merely pointing out the folly of your quote above (even if you amended your essay to include the all important “now”), since I don’t think I’m being inaccurate nor unfair to paraphrase your article as one which has as its core premise that a fairly significant percentage of cars sold are a direct consequence of rising equity markets.

        What would I define as “significant?” That’s a fair question, and I’d describe it as I would obscenity; it’s difficult to quantify, but I’d know it if I saw it, and I doubt I’m seeing it (nor that you can stake a credible case for it).

        At any rate, I’d be genuinely surprised if more than 1.58 cars out of a 100 (yes, I used a fraction and in an arbitrary manner) in the last 3 years are the direct result of the purchaser reflecting on realized or unrealized gains in their “equity portfolio” gains.

        • 0 avatar
          Steven Lang

          Unfortunately, you are seeing things a tad. I did not add or remove a single letter to that article. But I’m glad you took the effort to review it again and as the old saying goes, “It take a meaning, to catch a meaning.”

          All the best!

          • 0 avatar
            DeadWeight

            Steve, you’re a good writer whose articles are truly insightful (especially since you relay the realities of what happens behind the scenes of what is for most readers a very opaque wholesale automotive business model), but if you can’t admit that -

            “And for all that good fortune, you can thank one overwhelming force in today’s marketplace.[..]”

            - is one of the most incredible misinterpretations of reality, I really don’t know if you’re being stubborn or if that’s your dramatically flawed perception.

            You’ve essentially stated that the equity market bounce has been the main catalyst (read that quote again and tell me I’m misinterpreting your claim) for rising automotive sales I’m the last 3 years.

            In fact, it’s so far down the list of true factors that it’s not even a blip on the radar.

          • 0 avatar
            DeadWeight

            Steve, you’re a good writer whose articles are truly insightful (especially since you relay the realities of what happens behind the scenes of what is for most readers a very opaque wholesale automotive business model), but if you can’t admit that -

            “And for all that good fortune, you can thank one overwhelming force in today’s marketplace.[..]”

            - is one of the most incredible misinterpretations of reality, I really don’t know if you’re being stubborn or if that’s your dramatically flawed perception.

            You’ve essentially stated that the equity market bounce has been the main catalyst (read that quote again and tell me I’m misinterpreting your claim) for rising automotive sales in the last 3 years.

            In fact, it’s so far down the list of true factors that it’s not even a blip on the radar.

    • 0 avatar
      SoCalMikester

      the last cycle was people cashing out “equity” to buy big screens, harleys, escalades and jetskis.

      this cycle seems to be people doing car title loans and paycheck advances in order to put food on the table. im really tempted to cash out of the stock market and wait until the next big crisis- either terrorist or financial.

  • avatar
    CapVandal

    FWIW ….

    No one has repealed business cycles.

    Autos are a cyclical business in a cyclical economy.

    Which is sufficient to explain most of what is going on without a lot of additional speculation regarding the ‘reasons’, ‘meaning’ and ‘implications’ of current new car sales

  • avatar
    areader

    Tire sales are way down; specifically tires in the replacement market. Obviously every new car has at least 4 new tires so original tire sales are a function of new car sales. Listening to the earnings call for Monroe Muffler and Brake and for Pep Boys we find that people are not spending money to repair their cars. They buy 1 tire instead of 4. They skip repairs to suspension systems. Are they just cautious or are they broke? As this pattern of non-spending continues it seems to be a great many people are broke.

    As John Edwards said, there are two Americas. Maybe more, but a very large portion of the populace is up against it and I don’t see that changing at all soon.

    • 0 avatar
      corntrollio

      I see, rather, I hear a lot of cars where owners have engaged in deferred maintenance. It’s not hard to see it if you walk down the street — you hear various groaning, squeaking, ticking, etc. noises from cars. This only seems to have increased since the start of the Great Recession. I take it as a challenge to figure out what’s wrong with the car.

      I see more and more unbalanced tires, for example. More and more vehicles that just seem a bit too bouncy. More cars using the donut spare (that’ll end well!). More breakdowns on the side of the freeway. More car fires.

      • 0 avatar
        28-Cars-Later

        Based on your thoughts, I see a real challenge in used cars moving forward. Not only do you have to worry about not overpaying, but pretty much increase the amount you plan to put into after the purchase.

  • avatar
    Scot 57

    The future of the auto industry is NOT good. If the info presented is correct, with 54% decline in new car purchasing by 18-44 year olds. Manufactures need to begin planning to produce fewer vehicles to maintain value for new and used cars. And if manufactures want to get back above 17 million in annual sales, then car prices need to come down by about 50%. GOOD LUCK car business….

    • 0 avatar
      28-Cars-Later

      They’ll never hit 17 million again, I’m amazed we’re around 13 million today. Its all thanks to our diabolical friends down at the Fed… the Federal Reserve robbing your future since 1913.

      • 0 avatar
        DeadWeight

        We’ll hit 17 million again and well beyond just based on (even slow and slowing) population growth in the U.S.

        The only questions IMO are -

        1) When,

        2) Whether we hit a 10, 11 or 12 million annual sales rate again, and maybe sooner than many expect,

        3) What types of vehicles, and at what price and (de)content(ed) points many of those vehicles will be.

        • 0 avatar
          jimbob457

          You are correct, sir. 17mm SAAR US sales will return. Unhappily in the idiocracy that is Detroit, nobody seems to have a clue when that will be.

          I could tell you that date plus or minus a year or two, but then I would lose an ongoing source of amusement. Figuring out these sort things requires hard work and brainpower, qualities Detroit has seen little of for several generations.

  • avatar
    mtypex

    I’m pretty sure we could hit a SAAR of 16 mm units if only we had Alfa.

    I hope you weren’t drinking anything when you read this.

  • avatar
    jimbob457

    Detroit car guys – possibly the most totally clueless group of persons on the planet. The city itself is a clear metaphor for the US industry. How in the world could even the dumbest of the dumb bankrupt GM and Chrysler? But, they dood it! You are making me ashamed to call myself an American.

    For heavens sake, examine your business. I could tell you roughly when 17MM light vehicle sales SAAR will return over a 12 month period, but as the Good Book says “cast not thy pearls before swine”.


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