All Hail The Pent-Up Demand

Bertel Schmitt
by Bertel Schmitt
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 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. 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 Chief Economist Lacey Plache.

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  • Ron Ron on Dec 05, 2011

    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."

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    • Volt 230 Volt 230 on Dec 06, 2011

      This reminds me of the "Cast Away" movie, Tom Hanks had years of pent-up and then he gets to go home and the wife is not available, in this case lack of money is the culprit.

  • Zerofoo Zerofoo on Dec 05, 2011

    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.

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    • Bikegoesbaa Bikegoesbaa on Dec 05, 2011

      @jmo Agreed. I'm an engineer, as are most of my friends - in a wide variety of disciplines. Right now we all are fielding calls from headhunters and pretty much have our pick of jobs and locations nationwide. I'm sure it won't last forever, but for now it appears that large technical employers are actively trying to (re)build their skilled talent pool. They pretty much have to, as a 3-year fear-fest of "never hire anybody and fire as many people as possible" creates a lot of openings, and it's not possible to maintain a siege mentality indefinitely.

  • SilverHawk SilverHawk on Dec 05, 2011

    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.

  • Wheatridger Wheatridger on Dec 06, 2011

    I'm buying a used car tomorrow. Glad I'm not the only one doing that, or I'd feel like a fool.

    • MrWhopee MrWhopee on Dec 06, 2011

      But all those people buying used cars tomorrow drive the price up... If there are a lot of people interested in that nice used cars you wanted, the seller's gonna play hard to get and demand top dollar. I think if I'm buying something I'd rather have no one else doing the same so the seller would be more likely to give to my demands...