Thursday, December 04, 2008

Trade Down To A Clunker



Have y'all seen the drop-off in North American auto sales?

From Barry Ritholtz's blog:

U.S. auto sales plunged 37 percent in November to the lowest annual rate in 26 years as the recession and Detroit automakers’ aid pleas kept buyers away from showrooms.

Ford’s November sales down 30.6%.

Toyota sales down 33.9%.

Honda sales down 31.6%.

Volvo sales tumbled 46.5%.

Chrysler U.S. sales fell 47%.

GM falls 41%.


Nobody NEEDS a 20, 30, or 40 thousand dollar vehicle. The purchase of such is pure self-indulgence. A car gets one from Point A to Point B; anything else is ego waxing.

Car sales are down so much because Morons, all at once, realized what I just wrote - that a snazzy new car is a discretionary purchase....one that can be drastically cut if need be.

If the lumpen, over-leveraged masses go from buying a new car every 3 years to trading in every 5 years....what's that? Something like a 67% drop in unit demand?

Furthermore, consider that the sheeple will be buying lower-end (Read: lower margin) vehicles going forward as well. Salt in the wound!

In summation, the entire auto industry, both in size and price point, is revealing itself as a purveyor of *luxury goods*.

And *luxury goods* dealers who peddle to the masses.....well, they don't exactly have the most optimal of business plans.

5 comments:

Funny Circus Bears said...

So many people consider car payments as just another unavoidable living expense, like the utility bills or rent / mortgage - pure insanity!

The Big 3 - a completely untenable business model. A friend in Philly has been on the "jobs bank" for YEARS pulling 95% while working under the table.

UAW = U Aint Workin'!

Coach G said...

My 2000 ford ranger is running fine. Only 20 mpg but NO PAYMENTS ever

CaptiousNut said...

I don't think either of my cars is fit to be driven the 1,526 miles to Naples next month.

Wouldn't be too much fun to break down on the road with my two kids.

Anonymous said...

Hey Cnutttrrrrr
Ya going to Naples... life must be nice going to Florida and Naples....
How bout staying home and stop lecturing
What you call ya self one of the masses ?
Giveme a break.. you're a stock breaker too
hahhahahahahaaha

CaptiousNut said...

No, no.

I am a Masshole...not one of the masses.

And I am not a *stock breaker*.

I am a trader and *ball breaker*!