Auto Industry Resorts to Biggest Incentives Ever Just to Slow the Decline in Sales

Share on FacebookTweet about this on TwitterShare on LinkedInShare on Google+Share on RedditPrint this pageEmail this to someone

Last time automakers tried this was in 2009!

In a few days, automakers are going to report their new vehicle deliveries for March. TrueCar, Kelley Blue Book, and LMC Automotive are predicting total vehicle sales slightly above the flat-line compared to March a year ago, though sales were down year-over-year in both January and February.

TrueCar forecasts an increase of 0.2% year-over-year to 1.586 million new cars and light trucks, with retail deliveries (excluding fleet sales) growing 1% to 1.276 million units. J.D. Power and LMC Automotive said on Friday that they expect an increase of 1.9%, to 1.62 million units, with retails sales up 1%, boosted by record incentives.

If sales nevertheless fall, everyone will blame the winter storm that arrived in the winter – “unexpectedly” or something. And it is possible that sales might fall. There was no winter storm in February, which was one of the warmest Februaries on record. Yet, sales in February fell 1.1% year-over year. They edged down in January too. And sales in both months combined fell 1.4% from the same period a year ago.

It’s not like automakers haven’t been trying. They paid out record incentives to accomplish this feat of slowing down the sales decline. In February, the industry in the US shelled out on average $3,587 per vehicle in incentive spending, per TrueCar. It was the highest ever for a February.

We’ll get to the March incentives in a moment. Just a quick word on what transpired in February. The table below shows average incentive spending per unit sold:

Some standouts among US brands:

  • GM clocked in at over $5,125 per unit in incentives. That’s apparently what it took to get its sales to rise 4% year-over-year.
  • Ford, which has been priding itself in its “disciplined approach” to incentives, spent over a grand less, $4,011 on average, and its sales declined 4%.
  • Fiat Chrysler may be beyond help. That’s perhaps why CEO Sergio Marchionne has been so desperately looking for a buyer. FCA spent $4,362 per unit on incentives in February, as total sales still plunged 10% and are down 11% for the first two months.
  • Car sales for GM, Ford, and FCA plunged 23%, 24%, and 26% respectively. While GM and Ford showed gains of 16% and 5% respectively in light truck sales, FCA couldn’t even do that, and its trucks sales fell 7%.




These are averages per unit: At $5,125 per unit at GM, there may be some models with $10,000 in incentives and others with none, depending on what GM needs to move at the moment, based on inventories on dealer lots, production, and profit margins (that range from very fat on high-end pickups to very slim on small cars).

For March, J.D. Power and LMC Automotive pegged incentives at $3,768 per new vehicle sold – the highest ever for any March. The prior record for March was achieved in 2009 as the industry was collapsing. In June 2009, GM filed for bankruptcy.

By these estimates, the incentives in March would amount to 10.4% of suggested retail price, in the double digits for the first time since 2009. These are some seriously desperate incentives!

TrueCar estimates that incentive spending in March rose 13.4% year-over-year to an average of $3,511 per vehicle sold. But this would be 2.1% lower than the desperate incentives in February:

Some standouts:

  • GM cranked up its incentives by 21.4% from a year ago, but dialed it back 4.5% from February.
  • Honda increased incentive spending 27% year-over-year, and increased it 2.9% from February.
  • FCA, which had already been dousing the market with incentives a year ago, increased it another 7% year-over-year, but remained about flat with February.
  • Subaru, lowest on the list with a modest $901 in incentives per unit sold, nevertheless felt it needed to crank them up by 59% from a year ago.

And look at the total dollar amounts spent in March: $5.54 billion! In just one month! GM alone spent $1.3 billion in March.

If GM piles on incentives at this rate three months in a row, it would spend nearly $4 billion on incentives, in just that quarter, just in the US alone. How much dough is that for GM? In Q1 2015, GM reported global net income of $2.0 billion. In Q1 2015, it reported global net income of $0.9 billion. These incentives can eat an automaker’s lunch in no time. And they did in the years before the industry collapsed during the Great Recession.

For consumers in the mood, there’s an old saw: “Good deals are made in tough times.”

But not for automakers. They face another reality: Sales have peaked. The seven-year up-trend has ended. Pent-up demand from the Great Recession has disappeared. Trading is getting more difficult, with falling used vehicle prices and rising interest rates. Subprime lending is facing real hardship. And these enormous incentives are now required just to keep sales from falling more quickly, and to defend market share against other desperate automakers and their incentives.

After the credit bubble comes the credit bust. Read…  Subprime Auto Loans Crushed Worse than in 2009, Auto Industry Bleeds, Knock-on Effects Commence




Share on FacebookTweet about this on TwitterShare on LinkedInShare on Google+Share on RedditPrint this pageEmail this to someone

  59 comments for “Auto Industry Resorts to Biggest Incentives Ever Just to Slow the Decline in Sales

  1. Bookdoc
    Mar 26, 2017 at 8:08 pm

    I was in car sales for over 20 years before I retired last July. Glad I got out. I saw credit being extended to people who had no business buying the vehicles they got. I had planned on retiring by the end of the year but cashed out early and now work part time at a conservative savings bank. Cars have gotten ridiculously expensive and now come loaded with many options that are now standard equipment and keep prices high. A lot of customers do NOT want to pay for that stuff and seldom use it. We did a LOT of leasing as well as that can be treacherous when the leases come rolling back in and are not worth close to the residual value as so many (in addition to rental car drawdowns) are coming back. Leasing kind of slowed for a few years but came back strong 2-3 years ago. I must admit I took full advantage of it as every car salesman worth their salt did. The piper will have to be paid. Those are the vehicles coming off lease now. I am secure with money in the bank and some very solid assets in addition to SS and a wife still working in a critical field. I have a feeling many others in my age group (I’m 67) are not close to the same situation and have little faith the SS is a going concern.
    I, of course, still have friends in the car business and it is getting rough for them-glad I am out!

    • Gary
      Mar 26, 2017 at 11:47 pm

      Thank you, great info.

    • Paulo
      Mar 27, 2017 at 10:00 am

      Really good info. My wife and I simply DO NOT want any fancy options. We just want good reliable and comfortable transportation. So, we just don’t buy and keep the maintenance up on what we do drive.

      Mt wife’s car is a 2009 Yaris. New Toyota brakes are crap. In fact, all new small cars have bad brake engineering these days. To avoid unwanted repairs I now take the car in to a friend of mine who is a Toyota tech/mechanic with his own business at home. We have a set maint sched for a drop off every 6 months with instructions that he is to have a looksee and replace what needs doing…..(like brake pads). Of course his shop rate is $40 per hour and he is as honest as the day is (getting shorter every bloody day) :-)

      If you know a good mechanic, preventative maint is the way to go. It saves money, actually. I used to do my own work and fix stuff as required. It drove me crazy and always made me angry, (replace brakes before Monday!!, stuff like that). My 31 year old Toyota pickup seldom needs any work. Ever.

      I would love to drive a newer and more comfortable truck. But the prices!!! The unneccessary options…like cameras to use for backup, heated seats, the electronics. Nah….I’m saving for a rental, instead.

    • littlebit
      Mar 27, 2017 at 12:10 pm

      Right you are. I was at one time a Finance & Ins. Mgr at a Ford dealer. ( I am a little older than you) . I last bought a new pickup in 2008 with all the bells and whistles I paid $28,000. The same pickup is now $55 to $60,000. This puts a lot of us out of the market. I noticed they are now financing for seven years. Being retired I buy for cash or I don’t buy. At 50 to 60 grand I am not buying. I would love to have a new one but at 200 to 300 miles per month I don’t have to have one. If I did I would buy used.

    • Begbie
      Mar 27, 2017 at 1:04 pm

      Options? I watched a woman standing in the pouring rain waiting for her automatic but excruciatingly slow SUV tailgate hatch open. Apparently in this day and age its too taxing to lift a tailgate hatch with your chicken arms

  2. mynamett
    Mar 26, 2017 at 9:13 pm

    Ford, GM, Chrysler and Nissan are offering the biggest incentives because of quality and design issues with new models.

    Toyota, Honda, Kia and Hyundai have better quality car and can afford to offer lower incentive because of the good reputation these brand have.

    Go on YouTube and look at Ford ecoboost problem, Ford EPAS steering recalll, Ford DCS transmission problems. Also search on YouTube Nissan CVT problems.

    This chart also illustrate USA brand falling behind Asian brands.

    Go on YouTube and read comments about Ford, GM, Chrysler and Nissan quality problems. I can pass hours reading horrors stories.

    This is one sample you can find on YouTube about Ford.
    https://www.youtube.com/watch?v=szHMXwcp9fo

    • RogerThat
      Mar 27, 2017 at 8:11 am

      (Ford, GM, Chrysler and Nissan are offering the biggest incentives because of quality and design issues with new models.)

      GM- active fuel management on Silverado pickup -aluminum- V-8 engines. What could go wrong? Thank you E.P.A. Ford F-150 all aluminum …“laugh”

    • MC
      Mar 27, 2017 at 8:46 am

      Those incentives are there not because of image problems: just make people believe they are buying a race car on a beater budget and you’ll have people lined up in front of your dealerships no matter how unreliable your cars.
      Those incentives are there because of massive overcapacity.

      Intriguingly enough the volume of vehicles manufactured in so called First World countries (US, Germany, Japan etc) is at or even below 2007 levels.
      Leaving China aside (chiefly because her automotive industry deserves a separate treatment), growth has come almost exclusively from countries which serve as manufacturing hubs for the rest of the world.

      Not many have heard of Tofas, yet it’s one the largest industrial groups in Turkey. Its line of business is manufacturing cars and vans for foreign customers: these days they build most of the smaller vans sold on the European market by FCA and PSA (including Opel) and all the FCA Egea-based sedans. They also manufacture some Dodge van models for the North American market.

      There are dozens of Tofas around the world: some of them are wholly owned by automotive colossi such as Toyota, other are joint ventures and others still are just outside contractors, the automotive versions of Hon Hai (Foxconn).

    • Wild Bill Hiccup
      Mar 27, 2017 at 3:31 pm

      Ford and GM have above average profit margins on their vehicles, that’s why they can afford to offer better rebates. The idea that they are basing their rebates on Asian fan boy propaganda is ludicrous.

      • mynamett
        Mar 27, 2017 at 7:53 pm

        http://www.mbaskool.com/fun-corner/top-brand-lists/16164-top-10-automobile-companies-in-the-world-2016.html

        I am not sure what you are trying to say here. I am saying Ford and GM are losing the global race against Asia car companies. Both have big qualities issues and this is why they are slipping toward the bottom of the list and have to offer bigger rebate to attract people.

        is the top ten Top 10 Automobile Companies in the World 2016

        Quick Glance :

        Top Automobile Companies in World 2016 are

        1st Place : Toyota

        2nd Place : General Motors

        3rd Place : Daimler

        4th Place : Hyundai

        5th Place : Honda Motor Co.

        6th Place : Nissan

        7th Place : Ford

        8th Place : Volkswagen

        9th Place : BMW

        10th Place : Fiat Chrysler

        • Wild Bill Hiccup
          Mar 28, 2017 at 9:10 am

          If Trump forces Japan and Korea to stop pegging their currencies to the dollar, there won’t be any more Japanese or Korean car companies. The only way these companies can compete is if their governments pay the tens of billions of dollars it takes to stop their currencies from rising, as they naturally would. Once the de facto subsidies stop, that’s when the real competition will begin.

    • Randy
      Apr 3, 2017 at 8:25 am

      Wow! That video is shocking. I had no idea Ford vehicles have SO MANY pervasive problems that have been recognized for years.

  3. Jonathan
    Mar 26, 2017 at 9:14 pm

    -U.S is more urbanized than ever = less cars
    -People have less money to spend on gas or big ticket items = less cars
    -Less reasons to go out than ever due to online = less cars

    Like standalone cameras that died an astoundingly quick death after smartphones, times has changed while some industries are still believe in doing things the old way.

    • Pavel
      Mar 27, 2017 at 8:15 am

      Another trend the the automakers must be scared of (or should be) is the number of millennials who don’t have or don’t want a car. Apparently many of them don’t even see the need for a driver’s license.

      What with college debt, low wages, high rents, and the existence of Uber and Lyft, young people in the cities have no desire for cars. And fewer of them are getting married and moving to the suburbs. I have 4 millennial nieces and nephews in their late 20s and 30s, all with spouses or partners, and they all live in urban areas.

      Of course this same trend is impacting the retail sector and especially the shopping malls, as Wolf has pointed out elsewhere.

  4. interesting
    Mar 26, 2017 at 9:55 pm

    lower auto sales are the result of climate change…….sorry I had to say that.

    Damn…..i was just trying to be funny but thought, what the heck lets do a google search……mega facepalm.

    http://www.independent.co.uk/environment/climate-change/netherlands-petrol-car-ban-law-bill-to-be-passed-reduce-climate-change-emissions-a7197136.html

    Climate change: Netherlands on brink of banning sale of petrol-fuelled cars
    ‘We need to phase out CO2 emissions and we need to change our pattern of using fossil fuels if we want to save the Earth,’ says a Dutch Labour Party member

    • Stephan M
      Mar 27, 2017 at 4:01 am

      Don’t worry about climate change, within “weeks” Harvard University, against the wishes of the UN, plan to dump massive amounts of Ice in the upper atmosphere to simulate what the world would be like after a huge volcanic explosion….This geoengineering is out of control all under the guide of “climate change.”
      “https://www.theguardian.com/environment/2017/mar/24/us-scientists-launch-worlds-biggest-solar-geoengineering-study?CMP=share_btn_tw”

      Paid for by by Bill Gates

      • TJ Martin
        Mar 27, 2017 at 8:48 am

        Correction . Paid for in part by Bill Gates and a consortium of donor/investors . Read the story not just the bullet points tickling your fancy .

      • Smingles
        Mar 28, 2017 at 11:48 am

        Oh no, a study paid for by the Bill and Melinda Gates Foundation and other donors!

        The horror!

    • Gerald Stehura
      Mar 27, 2017 at 10:19 am

      Climate Chaos is real. This summer will set new heat records. Methane released in the artic melting permafrost and the deep oceans could bring our civilization to collapse. This is what the laws of physics say about run away Climate Change. Every year will bring more heat and Chaos. Time to stop joking and covering up reality. Time to get real about saving our butts!

  5. George McDuffee
    Mar 26, 2017 at 11:25 pm

    This appears to be the retelling, albeit on a much larger scale, of the story of the store-keeper who was about to go bankrupt and couldn’t figure out why, because he had a tremendous trade volume in rabbit skins. He bought them for a dime, sold them for a nickle, and most days had customers lined up on the sidewalk outside his store…

  6. Mar 26, 2017 at 11:31 pm

    Could it have anything to do with more and more product being made by fewer and fewer people with less and less discretionary income?

    • cdr
      Mar 27, 2017 at 6:30 am

      No, the conclusion is obvious:

      ICE ramps up deportations

      Auto sales down

      Do I need to paint the picture too? Simple economics.

      (Just kidding)

      I suppose someone might correlate higher Obamacare payments or excessive student loan repayments with lowered car sales and new jobs that are said to be somewhat crappy. After all, there’s only so much money to go around.

      • cdr
        Mar 27, 2017 at 8:05 am

        Just out of curiosity has anyone compared the disposable income of a settled illegal immigrant with a debt crippled and job impaired recent college grad US citizen? Maybe we’re throwing out the wrong people???

        • TJ Martin
          Mar 27, 2017 at 8:36 am

          An interesting question indeed .

          In as far as the multitude of reasons why sales are in decline though one needs to focus on the fact that millennials are not even bothering to get drivers licenses never mind buy cars new or used because they are so bogged down by student loans for a degree now hardly worth the paper it was printed on . Tack on the majority of new ‘ jobs ‘ created being either modest paying , contracted labor or temporary an aging workforce not aging out due to retirement concerns etc and the mess gets worse

          Oh but wait . The crux of the problem . Over production ! Simpler economics .. when one manufactures at a rate exceeding even reasonable demand forecasts … one winds up with a glut of inventory needing to be dumped at a loss

          ” The Never Ending Story ” since the 70’s when it comes to the ( not so ) Big Three . The shock is now the Japanese and the Koreans are following suit .

        • Petunia
          Mar 27, 2017 at 10:09 am

          I compared my standard of living to my illegal neighbors all the time. They were doing extremely better. Nicer cars, smartphones, more cash.

      • Gerald Stehura
        Mar 27, 2017 at 10:26 am

        There is lots of money to go around…It’s mostly in the hands of a few Oligarchs! A few Wall Street Crime bosses and hedge fund gamblers made $29 billion in bonuses while all the low wage workers in the US made $13 billion. Something is very wrong with our system!!!!

  7. william
    Mar 26, 2017 at 11:46 pm

    The last 6 months: $3k-$4k lower prices on used Sienna minivans w/under 50,000 miles miles. I was floored when I checked prices this weekend. I was about to buy something last Fall and postponed my purchase.

  8. Autospec
    Mar 27, 2017 at 12:32 am

    Im in and out of all kinds of dealers daily, most of which have a dry eraser board, usually in sales managers office which clearly shows how many dealers per salesman, monthly targets and bonus increments etc . The last 3 months here in BC Canada has been telling if you read them all the time like I do. One in particular targets 200 pre-owned per month and all of the last few yrs has usually met or beat each month. This yr down aprox 20% Jan/Feb and looks to be 30% for March….Ive never seen so many balloons and sales events in a long time…people are tapped out in debt….and not to mention in the urban centers car sharing is exploding, lots of people I talk to are going from 2 to 1 cars or 1 to none. Times are changing

    • william
      Mar 27, 2017 at 8:27 am

      Went from 3 to 2 cars last year. I hadn’t thought this was a trend, but may very well be.

    • Full of Gas
      Mar 27, 2017 at 9:50 am

      Hi Autospec,
      Thx for the info share!
      As I reside in Alberta which has been a ground zero due to oil, can you please share some more observations about BC?

      Here in Alberta things are as follows:
      1.) There was some acceleration in Nov.-Feb. period.
      2.) Starting around Feb. 18th there is a notable slow down.
      3.) Dealer lots and 2nd party lots are overflowing with new cars.
      4.) Incentives start at 20% OFF for a cash deal and go up from there.
      5.) Ford was offering $14,000 CAD off and brand new F-150, with that you can probably by and F-150 cheaper in Canada than in the US in USD’s.

      Cheers,

  9. Tim
    Mar 27, 2017 at 12:46 am

    Here in Russia we were on the brink of overcoming Germany as the largest auto market in Europe just a few years ago. And now we’re down 50% from the peak. Credit fueled growth will do that for you (with a help of devaluation)

    • Tim
      Mar 27, 2017 at 4:55 am

      Average Russian don’t care much about internal US politics

      • Tim
        Mar 27, 2017 at 4:55 am

        *doesn’t

    • chip javert
      Mar 27, 2017 at 11:46 am

      Not to mention the intense reaction when you put a Trabant next to a BMW…

  10. hidflect
    Mar 27, 2017 at 8:45 am

    Debt is described as spending tomorrow today. Looks like tomorrow just arrived.

    • Full of Gas
      Mar 27, 2017 at 9:53 am

      Tomorrow was a few weeks ago…………..

    • Kent
      Mar 27, 2017 at 10:24 am

      Off topic, but I never really understood that concept. If I borrow today it certainly stunts my expenditure tomorrow. But whoever I give the borrowed money to now has money to spend today which didn’t exist before. So, to me, it seems I’m just trading my future purchases for someone to have current purchases.

      Bad for me, but good for them. Unless, of course, my borrowed money purchases me something that let’s me increase my income above my debt payment. Then good all around.

      • hidflect
        Mar 27, 2017 at 12:25 pm

        That’s over-extending the observation. The person who received your money is external to your situation. You’ll never see them again and they won’t be around to help you out. But your future capacity to buy has been hobbled by the debt you incurred today.

        What you’re describing is debt-induced, economic stimulus which is positive for economic growth initially until the total debt increases to the point where all your money goes to just paying the interest which is where the USA is today.

        Spending tomorrow today is another way of saying, don’t eat your seed corn that you’ll need next spring to grow more corn.

  11. Vern
    Mar 27, 2017 at 9:51 am

    HELLO! After 2002, pretty much all the new vehicles are really rolling smart phones/gadgets — with all the attendant problems.

    NOT interested! Ever.

  12. mvojy
    Mar 27, 2017 at 10:46 am

    Time to sell GM and Ford and buy Huffy and Schwynn along with whoever makes the bikes that people pay to share in the cities. Today’s youth don’t want a $300+ car payment when they can instead spend that little disposable income on travel, meals and entertainment.

    • MC
      Mar 27, 2017 at 11:01 am

      Here’s one little exclusive for Wolfstreet readers: if you want to invest in bicycles, invest in Taiwan.

      Taiwan is the largest manufacturer of bicycles in the world. A single firm, simply called Giant, manufactures over 6.5 million bicycles per year, or 10% of all the bicycles sold in the world. You don’t hear the name Giant because they mostly build under contract. Their customers include prestigious names such as Scott, Trek and Colnago.

      Taiwan has an extremely well developed bike component industries, with manufacturers of gears, wheels, seats etc often clustered close to each other thus dramatically cutting delivery times and costs.
      Most if not all boutique bicycles manufacturers have their products designed and manufactured in Taiwan.

      • hidflect
        Mar 27, 2017 at 12:32 pm

        I saw a great documentary 15 years ago about the guy who founded Giant. Modeled himself on the old-school Japanese Corporation style down to the morning exercises, Quality Control processes, etc. The problem today, however, is the world is flooded with bicycles even more than cars. They can’t come near to selling the inventory they produce.

        • Jonathan
          Mar 27, 2017 at 9:06 pm

          Taiwan is already an economic basketcase. There is nothing they can manufacture which also can be done cheaper or/and better across the strait except for their high-end chip fabs like TSMC…Even the latter isn’t exactly a business with good profit margins.

  13. OutLookingIn
    Mar 27, 2017 at 11:23 am

    Wolf –
    Is there an advertising type index, or a totalizer for the amount of auto advertising spent by manufacturers and dealers?
    Seems the sheer increase in volume of auto advertising (print, TV, radio, internet, bus kiosk, billboards, etc.) has approached a frenetic pace.
    If these incentives are showing signs of desperation, then it stands that the increase in the level of advertising goes hand in glove and is another indicator that the sector is in danger of breaking completely down.

    Advertising is expensive.

    • Mar 27, 2017 at 12:35 pm

      I’d love to get more of this auto advertising money :-)

      Someone probably has this data … I’ll go looking for it.

      • OutLookingIn
        Mar 27, 2017 at 1:36 pm

        Thank you. That’s why this site is so great!

        • david
          Mar 28, 2017 at 1:50 pm

          For sure, Wolf brings to the forefront things I don’t see anywhere else.

  14. Begbie
    Mar 27, 2017 at 1:12 pm

    The second largest city in my state (Maine) has a population of about 60,000. There’s a highway through this city called “Automobile Row” which is about 3 miles long and has one of each of the big dealerships(Ford, Chevy, GMC, Honda, Toyata, Subaru etc) and several smaller independent places. The inventory at all of these places is overflowing in to adjacent empty lots, fields and abandoned businesses. I’m guessing 15,000 to 20,000 cars in a 3 mile stretch.

    Not sure whose buying all these cars but it isn’t anyone I know

  15. Maz
    Mar 27, 2017 at 2:31 pm

    My three kids are millennial’s. The oldest is in the Air Force and just bought a house but he and his wife drive an ‘07 and an ‘09. They have no intention of getting newer cars anytime soon. My middle graduated from college debt free last year and lives & works in Manhattan. She sold her car when she moved to NYC and has no intention of ever getting a car again. She loves renting and will probably never own a house. She loves going out in the evenings and a house would be too much of a hassle – her words. The youngest is still in college. She is talking tax accounting in a big city so probably goodbye car for her.

    • tom
      Mar 29, 2017 at 11:31 pm

      i am in the market for a car for my daughter.1st dealer i went to,ford,had …no,zero,zip… ford fiestas or focus’s on the lot.those are the cars teenagers buy,no money there. i tried the internet.ten emails that night.no interest in buyers of basic cars.car salesman exist to upsell. millennial’s want cars but nobody is interested in selling them what they can pay for.i have had 2 crew cab truck in the last 18 years.i can not pay the price they want for a new one.and buy the way ,no standard shift in the toyota corola,what the hell, just an extra grand or so for the automatic.upsell to no sale!

  16. Lee
    Mar 27, 2017 at 4:33 pm

    Too bad you Yanks can’t send some of that excess to Oz – you guys drive on the wrong side of the road!!

    All domestic car production is closing down this year and the market here will be 100% supplied by imports.

    Don’t know how that will work out for people who used to buy Holden (Australian domestic brand for GM) cars.

    Gone is the domestic produced Ute.

    Wonder if they will warm to an Opel made in Turkey and now called a Holden?

    For some reason cars like the imported Ford Mustang are doing great as are Mercedes, BMW and Porsche………….

  17. T
    Mar 27, 2017 at 5:39 pm

    Arthur Laffer and the supply side dou@@ holes should show up explain how this cannot happen.
    T

    • OutLookingIn
      Mar 27, 2017 at 8:28 pm

      Art Laffer still can’t live down laughing in Peter Schiff’s face and calling him a doom sayer on a TV fiancial show in 2006, when Peter was warning of an impending crash and a real estate bubble explosion.
      He bet Peter a penny that he was wrong. To this day Peter says he still hasn’t gotten his penny from Laffer! True to his colors.

  18. Hoster Gobblebooker
    Mar 27, 2017 at 7:44 pm

    It’d take some work, but I’d say tax overheads of vehicle ownership are higher than ever, as are taxes generally, vs income.

    Debts are higher than ever, even at zirp the maintenance costs are likely higher than ever.

    With no money to spend people cut their costs.

    Cars will be run longer. Clothes last longer. Restaurants used less.

    There is a confluence of factors all feeding off each other.

    Pop growth stopped and working age pop with decent spending power shrinking.
    Everyone borrowed from tomorrow, but tomorrow can’t afford it, so more taxes today.
    Less disposable today means less spending.
    Less spending means neg feedback loop.
    Stimulus just compounds issue, more debt for a future that won’t arrive.
    Only way it’ll arrive is if tens of millions of people breed and have loads of kids and don’t get their incomes stolen in taxes.

    The problem is the rich can’t and won’t ever wind their ponzi back.

    Nothing can shrink in this world, it can only crash.

    Too much leverage?

  19. Autospec
    Mar 27, 2017 at 9:17 pm

    RE- Full of Gas… seems people are simply tapped out as the cost of housing etc is bonkers, dealers have had it good the past few years, another issue here is pull aheads with leases…both BMW and MB are constantly chasing a sale by means of luring you in with a 6-12 month early lease return if you get into a new one, and typically for the same or less monthly payment…hey why wouldn’t you? This robbing from the future has been evident for the past couple yrs and its catching up. Heck MB sales wouldn’t be breaking records if it wasn’t for this and their employee vehicle program which counts as a LOT of new car sales.

  20. Virginia
    Mar 27, 2017 at 10:01 pm

    When I moved to the Oregon outback, 5years ago, I got a deal at Hertz on a used 2001 GMC Sierra, crew cab,4 wheel drive $7000. First pickup, keep it maintained, don’t drive it much except in winter snow, it keeps me going.
    My car is a 1997 Geo Metro, simple, no frills. Keep it maintained. In fact, to save my IRA money, I lived in my car for two years.
    Used the IRA to buy my bug out place.

  21. Emanon
    Mar 28, 2017 at 4:29 am

    Here’s a data point from Pittsburgh, specifically the North Hills suburbs.

    A mall that once had a department store, a movie theater, a fitness center, and a bookstore is now completely shut down. WalMart wanted to buy it and put a store there, but the locals hated the idea and it never happened.

    There are two current functions for the huge empty parking lots around the four vacant buildings.

    There is bus stop with commuter parking, for buses going to Pittsburgh.

    The lots are also used as overflow parking for car dealers.

    You can tell which ones are which, because the commuter section is empty on weekends but the dealer cars do not move for months.

    During the winter, the far back part of the lot was gradually filled in with unsold vehicles.

    Now a new section is being filled in a corner of the lot. About fifty or so vehicles a week are added.

    You can find it by typing it the name of a defunct store on Google Earth,
    “Trader Horn, Wexford, PA”.

    The GE picture is old and shows only the commuter cars. There are about twice as many dealer cars there now, and it will be interesting to watch and see if the rest of the lot is filled in over the rest of the year.

    As an added irony, it’s in a flood zone, and if a hurricane remnant hits Pittsburgh this year I expect that quite a few of those cars will be total losses.

    That just might be why the dealers put those cars there – they might be worth more dead than alive, if they are insured.

  22. Autospec
    Mar 29, 2017 at 10:11 pm

    Safe to say VW diesel doozy is and will give a boost to car sales to the tune of nearly 500000 us and 100000 in Canada, not sure about USA monthly sales but here in Canada 100000 sales is about 8% of total annual sales. A decent boost to a softening market, so by end of 2017 if sales are down they’re really down without VW scandal

  23. ML
    Apr 2, 2017 at 4:17 pm

    Here in the UK, Vauxhall has just announed withdrawal of GBP 4.5M sponsirship of football, having been a lwad sponsor since 2011.

    The official line is to use the money for marketing of new models/ products. I reckon it is to shore up margins.

Comments are closed.