All Hail The Pent-Up Demand
The long-awaited pent-up demand is finally here, and it’s here to last – at least into the first quarter of 2012, says Edmunds.com. A “mini-bubble” of new car sales has been identified, and it could make for a good start of 2012 say the car-counters of Edmunds.
Edmunds.com estimates that consumers deferred 300,000 potential new car purchases over the summer. An estimated one-third – or 100,000 – of those deferred buyers have already returned to the market. Another 100,000 purchases should return to the market by March 2012. The fate of the remaining 100,000 deferred purchases, though, is a little more unclear.
“The exact number of remaining sales that will return – and their exact pace – depends on economic conditions, since some portion of buyers likely have been deterred by current economic uncertainty,” says Edmunds.com Chief Economist Lacey Plache.
Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.
More by Bertel Schmitt
Comments
Join the conversation
Of course there is pent-up demand. Maryann Keller, a famous auto analyst, once quipped, "I have pent-up demand for an emerald. And my husband will make sure that it remains pent-up."
I'll believe this when I hear corporations have pent-up demand for employees. This is not rocket science. People buy cars and houses when they have good long-term prospects for jobs. Without a long significant decline in unemployment/underemployment, we will not see a recovery in the auto or housing market.
With the world economy seemingly at the precipice, it's easy to dismiss Edmond's estimates. This cautious mood is also reflected in the statements of many auto CEOs. But, in fact, there is a general feeling of optimism throughout the industry sales forces that, at least in the short term, consumers will return to the showrooms. This is reflected in the amounts being spent on advertising in the 4th quarter. Even notorious non-spenders like Suzuki are running adds. This spending will continue into the 1st quarter of 2012 to coincide with many new model releases coming in the Spring. How long the mini-demand lasts is, of course, dependent on consumer confidence which can fluctuate from week to week. But for the time being, the mini-bubble is being treated as the real deal.
I'm buying a used car tomorrow. Glad I'm not the only one doing that, or I'd feel like a fool.