By on June 25, 2010

If you’re hoping the US market is in the midst of an upswing, it’s time to start adjusting expectations. Ford’s Mark Fields says the market has “flat-lined” since Q3 of last year, telling BusinessWeek

The consumer is feeling a bit better, but not enough to go out and go back to the old ways of spending. It gives us pause because of the tight labor market and the overall situation in the credit markets

Edmunds has released its forecast for June, and though it shows sales up consistently from May 2009’s miserable numbers, there seems no question but that June’s sales will be lower than May’s. Edmunds sees an 11.2m unit SAAR for June, down from 11.6m last month. We’ll wait to see the actual June numbers before we officially end all hope of a strong recovery, but it’s starting to look more and more like 2009 was closer to “the new normal” than anyone wants to think.

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32 Comments on “June Sales Gone Flat?...”


  • avatar
    segar925

    What else would you expect when consumers have little or no confidence that things will improve? Higher healthcare costs, more taxes on the middle class and run-away spending to justify it all. It’s a great plan for a total finacial collapse.

    • 0 avatar
      bd2

      Healthcare costs have been going up astronomically over the past decade anyway.

      Healthcare reform was needed, but it didn’t go nearly as far as was needed due to all the special interests.

      Also, providing basic healthcare to everyone actually would help prevent costly treatment down the line (we already have unviversal healthcare, it’s called the “ER” – a highly inefficient method of providing healthcare, esp. since out healthcare system is already the least efficient in the world w/ one-THIRD of all monies spent on healthcare going to administrative costs).

      One thing that should have been done, tho, is to limit certain expensive treatments for those who don’t pay into the system (can’t provide everyone w/ every latest and expensive treatment).

      As for taxes, the middle-class actually comes out ahead under this adminstration (but any benefit is probably lost due to higher local taxes).

      As for the “run-away spending,” that was already done by the previous administration and they weren’t the ones trying to stimulate an economy.

  • avatar
    caljn

    Ummm…no increase in healthcare costs and no new taxes on the Middle Class. Run away spending started with two unfunded, illegal wars and tax breaks for the wealthiest. (can we finally put Reaganomics to rest!)
    Your version of runaway spending was subsequent and meant to rectify the previous and to put us back on track. I implore you, stop getting your (mis) information from Faux.

  • avatar
    Lokki

    Sorry Caljn – no blaming this on Bush. He didn’t pass a national health care plan that will cost trillions and it’s his tax cuts that Obama won’t extend.

    Somewhere around halfway through your presidency you start to own what happens. If the current President is so powerless that he isn’t responsible for what happens then Bush can’t have been responsible either.

    Personally I prefer to blame Congress…. which was in Democratic control during the last years of the Bush administration, when everything went to Hell. By the way, they voted for the war, ok?

    In any case, people don’t finance expensive objects like cars and houses based on how things were in the past; they buy them based on their anticipation of their ability to pay for them in the future.

    If you are willing to concede that at any point in the future, things WILL become Obama’s fault, then you must accept that the populace doesn’t believe that things are going to get better when he finally is responsible.

    OK?

    • 0 avatar
      OldandSlow

      Pure political horse hockey. In case no one has noticed the main growth engine of the economy during the past decade has been loose credit.

      The main reason car sales are flat lining is that jobs are difficult to come by, wages are down and credit limits are less generous than they were before the real estate meltdown.

    • 0 avatar
      bd2

      Bush increased the Federal deficit astronomically and in many ways, Obama was left w/ an economy that Bush Sr. was left w/ (except much worse) after Reagan departed.

      The economies during the Bush Jr. and Reagan years were propped up by heavy govt. spending and credit.

      Reagan had the S&L scandal/crisis and Bush had the subprime mess, which, w/ the financial firms essentially gambling w/ derivative instruments like credit default swaps, turned a real estate bubble into the worst economic downfall since the Great Depression.

      There were plenty of Democrats beholden to Wall Street as well in Congress, but the linchpin was Phil Gramm who spearheaded the moves to over-DEREGULATE Wall St. and to keep derivatives from being regulated (as well as things like the “Enron Loophole”).

      There’s a reason why Gramm became a Vice Chairman of UBS and why his wife served on the Board of Enron.

  • avatar
    segar925

    Isn’t is amazing that no matter how many times liberalism fails, it’s always the fault of conservatives. Democrats took control of Congress in Jan. 2007, that’s when things started going downhill. Everywhere liberals have governed, things have gone to hell. Just look at Detroit, Chicago, L.A. & every big city or state that’s been run by liberals. “The trouble with socialisn is that eventually you run out of other peoples money”- Margaret Thatcher

    • 0 avatar
      bd2

      Nice rewriting of history.

      While there were Democrats involved, the one who pushed for the over-DERGULATION of Wall St. and for the continued hand-off approach to derivative instruments were largely Republicans.

      There’s a reason why Canada’s economy is doing better (and why their banking system never came close to failing) and why Great Britain’s banking system came close to failing, as well as Iceland basically going bankrupt.

  • avatar
    caljn

    I blame this very much on Bush and 30 previous years of the right’s irresponsible tax policy. No matter who is controlling Congress, the man on top takes the credit or blame. Btw, when has a tax cut produced a job? (Interestingly during the 90’s, when Clinton increased taxes that produced a surplus, we saw the strongest economy in decades.)
    From the 40’s to the 80’s the middle class, and unions that provided good jobs, faired quite well. When Reagon came in and commenced his war on working people, things began to change and it’s culmination we’re stuck with now.
    Obama cannot change decades of voodoo economic policy in 2 short years. And unfortunately while his opposition laughingly labels him as a Socialist, he governs from the center right and as such will probably not take the strong measures we need.
    And I don’t know what you’re referring to re: Chicago, but Detroit is suffering for an industries mis-management and California is suffering because of laws put in place during a fit of anti tax sentiment in the 70’s.
    Prior to that, California’s economy, education system, and infrastructure were the envy of the world! No more…thanks repubs.

    • 0 avatar
      star_gazer

      A couple of thoughts:
      – The introduction of computers and the internet spurred on much of the growth during Clinton’s administration. Remember that dot.com growth?
      – Clinton was responsible for NAFTA, opening up Mexican automobile manufacturing. Also, Clinton gave China Most-Favored Trade status.
      – One of Clinton’s greatest decisions was not to impose his “BTU tax”, which would have crippled the economic growth during his term.
      – Chicago has been in the news concerning the “corruption tax” endured by its citizens. Chicago’s (and Illinois’s) situation may be under the radar screen for much of the country, but I’m certain that will change in the near future.
      – I agree with Stationwagon. We need to limit govenment, which would stem much of the abuse and corruption from *both* parties.

  • avatar
    segar925

    caljn,
    I think you’ve bought into that same union propoganda that has destroyed american productivity. Reagan did more for working people than any Democrat in my lifetime. Jimmy Carter gave us malaise, inflation, high interest rates and high unemployment. Reagan turned the economy around with lower tax rates for EVERYBODY. When do tax increases ever create jobs? The government can’t give you anything unless it first takes income from somebody who actually earned it. Chicago is a cesspool of crime and thug politics, just like every other big city run by liberals.

  • avatar
    George B

    I think a whole lot of plans including car purchasing are on hold while people wait to figure out what the new rules of the road will be. As cars have become more reliable, it’s easier to put off the purchase until people figure out what they will want. Most people have figured out everyone from individuals to national governments needs to reduce their debt loads to a lower level and are trying to figure out how this Great Deleveraging will unfold. For example, will luxury brand cars become unfashionable like a fur coat? Why spend big money on a new car if you don’t need one and it doesn’t improve your status with your peers?

  • avatar
    stationwagon

    @segar925 and @caljn and @Lokki
    I used to be big into politics, I was a liberal and then I was conservative. But I got out of all that. I realized it is all a giant conspiracy, the public loses almost the entire time. Most people voted for Obama to get us out of war, the same reason they voted against McCain. We are still at war. War is racket and Terrorist aren’t a real threat. It is all a conspiracy to dumb people down and give them giant injections of fear, creating a very submitful group of sheep. The liberals who love government give it more power, and the conservatives who fear terrorist give the government more power. The true source of economic power in the United states is not the government, it is the federal reserve, (emphasis)which is privately owned and controls the money supply. I could go on and on, but the truth is, it is all a conspiracy, perpetrated by the elite. Everything is a set-up everything that goes on in the upper echelons of power is done to manipulate people.
    *I went way off topic sorry, just had to put in my opinion.

    • 0 avatar
      OldandSlow

      It’s a bit like Las Vegas, the house usually wins and the house is owned by big money interests.

      The political theater is just to keep the masses feeling like we have some control over who is in and who is out.

      Buy the car that you can afford and be happy even if that means buying one with 50,000 miles or more on it.

    • 0 avatar
      porschespeed

      OldAndSlow,

      Always good to hear that somebody ‘gets it’.

      The sad part is that our educational system has been corrupted to the point that the average American student doesn’t understand how the world really works.

    • 0 avatar
      mikey

      Yes and great opinion it is. I’m a card carrying Liberal and I couldn’t agree with you more.

    • 0 avatar
      porschespeed

      mikey,

      As a fiscal conservative and social liberal (the theoretical definition of a libertarian) I’m kinda with you more than I appear to be.

      At the end of the day, the economy is far more beneficial for most when we have a more equitable distribution of wealth.

      20,000 people making 50K per year are far more useful than one billionaire.

      Always interesting to remember the US did very well for most of the 20th century – the marginal rate on the upper echelon was always between 75 and 90%. They still got “rich”.

      San Simeon was built despite all that ‘oppressive taxation’.

    • 0 avatar
      NulloModo

      porschespeed –

      As a former teacher (who just couldn’t stand being a part of the ridiculous system that we call public education any longer) I am always interested in opinions about our schools and how to fix them.

      I ask this without any sarcasm or belligerence, what do you feel constitutes corruption in our current education system and how do you feel it fails to prepare students for the way the world really works?

  • avatar
    GarbageMotorsCo.

    Betcha Government Motors will prop up it’s numbers with another 37+% fleet sales.

  • avatar
    toxicroach

    Sure would be nice if some of the lower end competitors had been allowed to die like the invisible hand intended… 11.6 might not be a lot, but it’d be pretty a sight healthier if we didn’t have Chrysler sucking up oxygen. If GM was gone, Ford would be posting record profits.

    Oh well.

    • 0 avatar
      porschespeed

      A tough decision…

      While the idealist in me is 100% with you, the pragmatist is a little more, well, pragmatic.

      While the crash and burn of thousands of GM/ChryCo suppliers would have been traumatic, was it in the best interest of the US?

      Is their destruction inevitable, and delaying it so as it happens in a semi-orderly fashion a good thing? ‘Tis inevitable after all…

      This is an area that defies a straightforward analysis for me.

      While I think in the big picture the pain would cast light upon how we got here (and spur change), I also feel for the guy/gal who goes through said pain of adjustment – they honestly may not survive it.

    • 0 avatar

      As Alan Mulally testified before Congress: Ford Motor Co.’s position was to support the bailouts of GM & Chrysler. He knew that a rapid liquidation of both companies would kill the supplier chain for all of North America, affecting every plant (Foreign owned & Domestic). I figure Ford has more skin in this game than mere observers, so I tend to believe him.

  • avatar
    beken

    Still seeing some friends get layoff notices and others not able to find new jobs. It’s going to be awhile yet.

  • avatar
    segar925

    All those billions wasted on bailouts would have been better spent as tax incentives for buyers of vehicles built in America. GM is just using their taxpayer cash to pack up and move to China. As for the terrorists not being a real threat, see how far that gets you with the 9-11 families or other victims of terrorism around the world.

  • avatar
    Dimwit

    Oh noes! We have a dip!!!!! Run away, run away.

    Sigh. This is the usual June/July changeover mellowing that happens every year. This year seems more drastic because no factory has pumped up their inventories. Notice TTAC hasn’t run one of those “180 day dealer inventory” stories in quite some time.

    Most of the lines are being changed right now and I wager that for the popular models there’s customers out there, with cash in hand, not being able to buy what they want exactly. If you’re willing to pony up to buy, I’m damn sure that you will want to get what you want, not just take what’s on the lot.

  • avatar
    porschespeed

    10-12MM is the natural replacement rate for a pop the size of the US.

    Get used to it, it isn’t going to go much higher for the next 10+ years.

    (And I’m being optimistic.)

    • 0 avatar

      Amen to that. Though I support Obama, he said something stupid when he brought this fact up: He said that car sales would come right back to pre-recession levels since we were scrapping more cars than we produced. The only problem is that people are learning to live without their second (or sometimes THIRD) car.

  • avatar
    John Horner

    The US consumer is by and large becoming a much more rational beast than she was a few years ago. Long term this is a good thing, but the economic adjustment period is going to be tough.

    • 0 avatar
      mikey

      @ John Horner & porschespeed…You guys have got it right. The world has changed. With all of us boomers retiring,and the next generation,having a different set of values,it’s going to impact all consumer activity not just cars.

      As one of thousands of early retired auto workers,I’ve seen my income slashed 50%. My 12 year old washing machine died the other day. Two years ago we would have bought a new matching washer/ dryer set. Instead I found a repair guy that had been laid off when one of the big dept stores closed. He pulls up in his 10 year van,a 100 bucks later and we are back in buisness.

      I work a part time job, answering the phone at a “you pull” low end car wrecker. The boss has been in buisness for 35 years and the last two years the used parts buisness has doubled.

      The tow truck boys bring in a car,import,domestic,rusted,you name it. The pickers descend like vultures,within a couple of days its a shell,and gets tossed on the scrap heap.

      Yes indeed the world has changed,and it ain’t going back.

    • 0 avatar

      A terrific read by Harry S. Dent: “The Great Depression Ahead”. This book speaks specifically about the Boomers making up for lost time in retirement savings, and severely reducing their consumption since their children have grown. There will be a new world order and maybe folks will be happier and less stressed enjoying less materialistic pursuits. But I will always love cars, though!

  • avatar
    obbop

    Of course, no blame can be placed upon corporate structures (peace be upon them) who increasingly hire “subcontractors” rather than employees so no benefits need to be paid and those “subcontractors” have to pay the full amount of federal and state taxes, etc.

    Also, the use of less-than-full-time employees to avoid paying various benefits.

    Other strategies in use to minimize employee costs to those hiring employees that also minimize employee income that in an economy that is regularly proclaimed dependent upon consumer spending for around 70 percent of the total economy well…

    Who will buy the goods firms offer for sale?

    The working-poor class IS growing.

    Beware when their anger grows, reaching a certain level and when they look around and see their numbers….

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