Q1 Carmageddon for GM, Fiat-Chrysler, Toyota, Nissan, Mercedes, Mazda…

Ford wisely kept its mouth shut. The problem with Mercedes and BMW is that they don’t yet sell luxury pickups, though they’re finally figuring it out.

The first quarter was not pretty for new-vehicle sales in the US. Deliveries fell 3.2% from Q1 last year, to 3.99 million vehicles. Unless a miracle happens – and miracles are rare in the auto industry – 2019 is going to be the third down-year in a row for the industry, and the fourth down year for GM, Ford, Fiat Chrysler, Toyota, and some others, whose peak sales volume occurred in 2015.

At this pace, 2019 deliveries will fall below the 17-million mark for the first time since 2014 (16.5 million). Industry soothsayers had expressed hopes late last year that 2019 volume would be flat. But so far, those hopes have been nixed by bad weather, lower or no tax refunds, general saturation of the market, massive price increases (we’ll get to those in a moment), and a Wall-Street-inspired push by the industry to veer away from affordable cars to expensive trucks. And car sales have collapsed. Hence my technical term, “Carmageddon.”

There are a handful of automakers with rising sales in Q1. But the five largest automakers booked (sharply) falling sales.

These sales are “deliveries” of new vehicles sold and delivered by dealers to their customers and by automakers directly to large fleet customers (mostly rental car companies but also commercial customers and government agencies). They also include units sold to employees and retirees.

GM sales fell 7.0% in Q1, to 665,840 units. All four brands experienced sales declines. GM said that over 80% of the vehicles it sold were “trucks” – meaning pickups, SUVs, crossovers, and vans. Fewer than 20% were cars. GM isn’t even pushing cars anymore. It’s focused on “trucks.”

The reason is that Americans are willing to pay a lot more for “trucks” than for “cars” even if the chassis and drivetrain are the same, as is the case with crossovers. And so GM has become a serial plant-shutdown-and-layoff announcer [After Wasting $14 billion on Share-Buybacks, GM Prepares for Carmageddon & Shift to EVs, Cuts Employees, Closes Eight Plants].

And GM is proud of these price increases, as it announced today:

“First-quarter 2019 average transaction prices for GM’s all-new, light-duty pickups were $8,040 higher compared to their outgoing models in the first quarter of 2018, with the GMC Sierra leading the segment, according to J.D. Power PIN estimates.”

When it comes to trucks, automakers have figured out how to wring out Americans so that they have a smile on their face. The truck segment is hot, and bigger is better, according to GM:

Combined sales of the 2019 Chevrolet Silverado 1500 and GMC Sierra 1500 crew cabs — the first of the company’s all-new full-size pickups to launch — were up 20 percent year over year.

Crew cabs are four-door pickup trucks:

GM added:

Crew-cab production mix is currently running above 70 percent to meet strong customer demand, up 10 percentage points on average from the previous-generation trucks.

More than 95 percent of the all-new GMC Sierra 1500 crew cab sales are high-end trims including SLT, AT4 and Denali.

Crew-cabs used to be work trucks that allowed you to take a bunch of workers with hardhats and muddy safety boots to your project site. Now they’re luxurious personal conveyances to go to Starbucks with. Americans love big luxurious trucks, and automakers love Americans for it.

Ford doesn’t cooperate. GM switched to quarterly reporting, instead of monthly reporting, of deliveries in April last year. Ford announced late last year that it too would switch to quarterly deliveries reporting. But Ford decided to make everyone wait two extra days and disclose its deliveries on April 4, two days after the other major automakers already reported. So I’m going to check on April 4 to see what Ford is trying to hide.

Meanwhile, Automotive News estimates that in the month of March, Ford’s deliveries dropped 5.5% in the Ford division and rose 1.9% in its Lincoln division. This would cause Q1 deliveries to drop an estimated 1.6% year over year to 586,956 vehicles.

But given how far sales have dropped among its biggest competitors – GM, Fiat Chrysler, Toyota, and Nissan – that estimated decline of 1.6% may well be wishful thinking. But we’ll find out on April 4.

Fiat Chrysler deliveries fell 3.1% in Q1. Among its brands, two had increasing sales: Ram sales in Q1 jumped 20% to 137,013 trucks. And its luxury Maserati brand booked a sales gain of 2.3% to 2,775 units.

But Jeep sales in Q1 fell 6.7% to 212,804 units. Dodge sales dropped 5.5% to 110,517; Chrysler sales plunged 32% to 31,591; Alfa Romeo sales plunged 26% to 4,286; and Fiat sales plunged 45% to just 2,214.

Toyota sales fell 5.0% in Q1, to 543,716 units, with Lexus sales rising 4% to 66,791 units and Toyota brand sales dropping 6.1% to 476,925. Of note, Toyota car sales in the month of March plunged 13%, while its truck sales rose 3.3%.

Nissan/Mitsubishi sales fell 9.7% in Q1 to 407,921 vehicles, with Nissan brand sales plunging 11.6% and Infiniti sales plunging 16.1%, but with Mitsubishi sales soaring 17.6%.

Honda sales rose 2.0% in Q1 to 369,787 vehicles, the sixth largest automaker in the US, and the first with sales gains. Acura sales rose 8.9% to 36,385 and Honda sales ticked up 1.3%.

Hyundai-Kia sales rose 4.6% in Q1, to 288,384 units, recovering after two years of getting clobbered. This includes the brands Hyundai, Kia, and Genesis.

Subaru sales rose 4.7% in Q1 to 156,754.

VW Group sales ticked up 0.9% in Q1, to 150,214 vehicles, with Porsche sales up 7.7% (15,024) and VW sales up 2.3% (85,952) but Audi sales down 3.9% (48,115). VW Group also sold an inconsequentially few Bentleys and Lamborghinis.

BMW sales fell 1.9% in Q1, to 83,123 units. This includes BMW sales that ticked up 0.1% to 73,888, Rolls-Royce sales that are so small they don’t matter (323), and Mini sales that plunged 15.5% to just 8,905. BMW sales peaked in 2015. By 2018, sales had dropped 12%. The problem with BMW is that it’s not selling luxury pickups though rumors are rampant that it will soon, any day now. Two weeks ago, BMW issued a bitter earnings warning with a Ford-like €12 billion cost-cutting program.

Mercedes-Benz sales plunged 9.3% in Q1 to 78,878 units. This includes the zombie brand Smart, of which it only sold 231 units. Like BMW, Mercedes missed the train on luxury pickups years ago. But belatedly, eventually, it will start selling its X-class pickups, including crew cabs. Dude, what took you so long? This is America! Meanwhile, people have been trading in their Beemers and Benzes for Sierra crew cabs.

Mazda sales plunged 15.7% in Q1 to 70,833 units.

Jaguar Land Rover sales rose 9.2% to 35,250, with Jaguar sales up 27% to 10,222 units and Land Rover sales up 3.2% to 24,246. The company is owned by Indian conglomerate Tata.

Tesla doesn’t provide data on US deliveries, but Automotive News estimated that Tesla delivered 27,000 vehicles in Q1, up 16.9% from a year ago. That puts it ahead of Volvo and behind everyone else.

Volvo sales rose 9.8% in Q1, to 22,058. The company is owned by Chinese automaker Geely, and China-made Volvos have been sitting in showrooms for two years.

These are unit sales. With unit sales declining 3.2% in Q1, how do you push up dollar sales? Raise prices. According to research firm J.D. Power, the industrywide average transaction price for new vehicles in Q1 rose 3% from a year ago to $33,319. GM bragged that in its new pickup line, the average transaction price jumped by $8,040 to about $48,000. Americans love to pay more for big equipment. So US revenues for the industry are likely to hang in there, based on price increases – however risky this game of raising prices on falling volume may be.

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  104 comments for “Q1 Carmageddon for GM, Fiat-Chrysler, Toyota, Nissan, Mercedes, Mazda…

  1. Stan Sexton says:

    Does the World Need Mercedes and BMW to make “Endless Money Pit” Trucks? These will be the most expensive to maintain and the fastest depreciating trucks on the Planet.

    • Just Some Random Guy says:

      This is what all the “smart” people said when Porsche brought the Cayenne to market? A Porsche SUV????!?!?!?! That’s crazy!!!!! And within a few years it was the best selling product Porsche had and is a money printing operation for VW Group.

      • flashlight joe says:

        @ Just Some Random Guy

        It is also what I thought in 1997 when Mercedes came out with their SUV. Who would buy that? But then, what do I know about the public mind?

      • Dale Donaho says:

        Currently the market is flooded with cars and trucks. If we followed the simple laws of supply and demand, anyone should be able to go to any dealership and buy a brand new vehicle for under 5k. There are more cars available than there are people to drive them. These pick up trucks are tipping over 70 and 80k. Completely out of the scope of affordability for most people. Even used car market is overflowing with vehicles. I read where repos are on the uptick now as well. Not a good sign for the auto industry.

    • Led Francis says:

      Mercedes X Class was developed in conjunction with Nissan.
      Mercedes troubles seem to be emenating from EU regulations and trying to get emissions under control.

    • Sinbad says:

      It’s about brand recognition, Mercedes used to build the most reliable long lived cars in the world. Many of the rich and famous who are into cars still drive an old Mercedes Benz. New Mercedes are not the same car, and eventually old Mercedes will like old Alfa Romeo’s be worth more money than the new models.
      We live in a disposable world based on consumption, and if cars are not replaced at regular intervals our economic system would collapse.

      The current fashion trend is for cars to look like trucks, and really they fail in both areas, but people like the look?

  2. Lion says:

    Curious when Ford made the April 4th date selection decision. Was it recent and they knew their results were going to look “really” bad ?

    • Marcus says:

      I spraypainted the sun-baked hood of my 15 year old daily driver last weekend. I make well above the median income in my area of SoCal and I won’t even consider buying a new car. Who are the people buying this many expensive trucks?

      • Bobber says:

        Retirees with stock/bond portfolios that have done well.

      • Clete says:

        Not buying, leasing — monthly payment uber alles.

      • orange cats says:

        What did you use for paint? I have a 2008 Toyota Yaris with 74k miles that I am keeping until something breaks, but there is some sun oxidation on the roof. Otherwise looks great.

        • Marcus says:

          Scratchwizard makes color match basecoat clearcoat kits. Everything you need for something the size of a hood or roof.

      • Bill from Tennessee says:

        In my area, SE Tennessee we find mucho young Latinos, wife and two kids in tow climbing into a max-ed out GMC Denali 4-door pick-up leaving a local Mexican restaurant. Super sub-prime lending? Cash from “back home”. Where do non- English speaking recently arrived immigrants obtain the funds to open business(es), pay insurance, rent and expenses, send their kids to school, etc. Very common here. Busloads from the border, probably not. Yet. But a steady stream non-the-less.

        • Wolf Richter says:

          Bill from Tennessee,

          Here’s an example, construction work. It pays well — the three D’s: dangerous, dirty, and difficult. Over the past few decades there has been a big shift, and by now, on many construction sites, Spanish is the primary language. These are skilled workers who are working hard under often difficult conditions and are making nice amounts of money.

        • Gian says:

          Because they work hard and don’t complain. Remember, they do the jobs Americans refuse to do (because the taxpayers pay them to sit on their lazy a$$e$). They may not speak English, but they speak dollars and cents and recognize an opportunity most Americans take for granted. Kudos to them for excelling while Americans languish in their 10+ year old cars.

        • Branden H. says:

          Hey Bill, I’m also commenting from the Chatt area! To add to Wolf’s comment, latino families are frequently dual income, commonly working at the same jobs, so those long hours of OT get doubled up. And there is a lot of OT in construction. You’ll see workers buzzing around these sites from dawn until the end of dusk. 100K+ doesn’t strike me as unreasonable for many of these families. 100K goes a long way here in SE TN, as I’m sure you know.

  3. GTA guy says:

    Re: “Crew-cabs used to be work trucks…….”

    Thought it funny last week on the local TV news (CTV-Toronto) that there was a guy complaining that he bought a truck as a pleasure vehicle and the licensing agency charged him the truck fee (over 3,000 kg) as opposed to a lower fee that smaller vehicles enjoy.

    • JohnnySacks says:

      And what’s the guy who needs a work truck to do? Do they still come with stick shifts and rubber floors and plastic seats that can be washed out with a hose? Seems impossible that anything will be remotely serviceable past a dozen years, discard, replace, and pity the person who buys one after the warranty is up. I drive by a local used car lot that is always full of dozens of Mercedes and BMW models and cringe thinking of all those nightmares.

  4. DR DOOM says:

    I hope everyone gets a $60,000 pick up and I also hope they get bigger. Also they are going to need 10yr financing for that land whale.The fed will absolutely accommodate that. This will help to put this economy out of its misery . Hey here is another script from the doc,they can wheel that behemoth into star bucks for a post purchase celebration and buy a $10 cup of up graded joe.I could really get spooled up on this post but I am getting up at 5am to go trout fishing in my 2003 1500 Silverado I bought used after gas hit $5 a gallon post hurricane Katrina. $3500 with 90000 miles on it. Every one was freaking out over gas prices and all lathered up for a +30 mi per gallon car. I have put another 250,000 miles on it . When it lays down I’ll snatch the mill out and for $4500 drop a Mexican GM replacement mill in it.

    • Lion says:

      I’ve owned 2 pickups in my life, my first will always be the one I remember, a Chevy C10, 3 speed on column. Was used as a truck, and not so much fun to drive, but cost was minimal. If you needed to haul the kids they sat in the back. It’s good those days are gone.

      Looking at today’s 60k Crew-cabs, amazing but also amazing prices. I know of younger Gen folks who would rather have the flexibility of renting and owning one of these $60k wonders, versus an expensive home.

      Maybe vehicle prices have some impact on home purchases.

      • Clete says:

        I just had a flashback when you mentioned three-on-the-tree. What a nightmare.

        • JohnnySacks says:

          Why nightmare? For $79 in Craftsman tools you could repair just about anything on that vehicle. And you could still do the same today on that 40 plus year old vehicle. Will I be able to repair my 2010 Canyon driven under 5000 miles a year in 2050? Not a chance. It’ll be crucified by yearly DMV computer inquisitions long before that.

    • Wolf Richter says:

      Please don’t tell me that you’ll put a new engine into a truck with 250,000 miles. Get a rebuilt engine. And don’t spurge on it :-]

      • Jack says:

        Well well , looks like if the car industry is reliant on Wolf’s readership, they’re deluding themselves big big time! :)

        Something off tangent here , could Wolf please do an article on oil and oil contracts , the amount of strategic reserves kept by the likes of China, Japan and the US?

        The oil trade have a huge impact of the economic viability of each nation, that is off course until Mr “ walking on water “ comes up with a credible alternative! :)

        Thank You

      • QQQBall says:

        I wonder if they still sell hose great used engines from Japan? I had one installed in my p;d Cressida and the engine was great. I remember I paid around $600 for the engine, plus installation.

      • DR DOOM says:

        I had two re-remanufactured mills in a 1985 k5 blazer. Rear seal leaked on one and the second spun a main bearing and the cam was gnawed off by the valve stems. Block on #2 was good so I did the rebuild. In past years part houses rebuilt heads bored cylinders etc,etc. they offered local support . I gave the 1985 k5 to a neighbors kid so he could get to work. It has +600k on it now (odometer quit a couple of years ago) . I do not trust re-manufactured. Used market for 4×4 pick ups are getting pricey now,and I plan on keeping the 1500 for 20 years,my wife said she will bury me in it. By the way I caught trout.

  5. Some Guy says:

    Bought my first (and only to date) car 11 years ago. Still, with any luck, lots of miles and years left, but just for fun checked out what it would cost to replace it like for like.

    In 2008, paid 24k, now would cost me 21k for as close as you could get, although the newer vehicle would have a number of upgrades vs. the old one, since they are all standard.

    If people are complaining about the rising cost of living, it’s not coming from cars, or if it is, they need to look in the mirror.

    • Neal Woods says:

      Automotive News gives a Tesla delivery estimate that seems off. Bloomberg has them currently producing over 6,000 Model 3s alone a week and they just started to export them.

      • james wordsworth says:

        Tesla had a 37% Norway market share last month. Norway went 58% all electric last month, only 22% ICE. Quite the different trajectory to the USA, and Norway is NOT short of oil.

        • Dan Romig says:

          Norway has definitely taken a different trajectory.

          “… it has developed hydro, wind and tidal power sources that generate 98 percent of the country’s electricity.”


        • Stavros Hadjiyiannis says:

          Some things to consider:

          a) Norway is tiny. Like, 1/64th of the USA tiny.
          b) Norway is filthy rich. Like significantly richer than the USA in terms of per capita income or fiscal and trading balances.
          c) The reason why Norway is so incredibly rich, is because they have been exporting (and still do) incredible amounts of oil & gas to the rest of the world.
          d) Norway is also geographically ideal for developing its hydropower resources.
          e) Norway subsidizes EVs to an insane degree.

          Absolutely safe conclusion: Norway is an obscene exception that bears no similarity to any other country on the planet. I find it perplexing that people cite that country as any kind of example to anyone else.

        • Jack2 says:

          james wordsworth, “Norway went 58% all electric… Norway is NOT short of oil” it’s also not very populated–the 2019 estimate (Wikipedia) has it at 5.328 million people.

        • char says:

          Norway is for cars more a collection of islands. It is hard to drive far

    • Wolf did an article about that, the conclusion I drew from that is that cars are cheaper than they were a few years ago. The causes can be drawn logically. Why the same process doesn’t apply to housing, not sure? Housing has not benefited from technology and competition?

      • char says:

        Location, location, location. Technology & competition between builders don’t help with that

  6. Jos Oskam says:

    As an aside, the average passenger car in the Netherlands is now 11 years old, compared to 9 years in Q1 2009. https://www.cbs.nl/nl-nl/nieuws/2019/14/aantal-wegvoertuigen-blijft-stijgen

    Nobody can say for certain why. The optimists claim this is because car quality has improved so they live longer. The pessimists state that cars have become less affordable so owners hang on them longer.

    Whatever the cause, a trend like this is bad news for car manufacturers.

    • Wolf Richter says:

      Same thing in the US. The average age of vehicles on the road in the US is 11.7 years, as of 2017, up from 6.5 years in 1970. Quality has a lot to do with it. Our car is 11 years old, and it’s in great condition. There is no practical reason to get a new one. My first car was 68 Mustang that I bought in 1976. It was 8 years old, and it was falling apart (literally, with things falling off here and there).

      • Jos Oskam says:

        Hey Wolf, that’s funny. I still have a 66 Mustang that I drive regularly. Yes, it needs more TLC than a modern car, there are things that have to be greased regularly for example. But it’s simple, straightforward, easy to maintain yourself and all parts are still available and do not break the bank.

        New cars are getting more and more stuffed with electronics that cannot be repaired and for which no replacement will be available after they reach a certain age. Obsolescence is planned and built-in. Plus, they get more and more intrusive into my private sphere, telling me how to keep my lane, preventing me from driving fast, forcing me to wear a seat belt, turning off the radio when I back up, checking on my drinking habits and registering where I am travelling. Last but not least they get more and more expensive to buy, repairs that you are forced to have done by a dealer cost a fortune, and for all this money they irritate me more and more.

        No, I’ll keep the old ‘Stang. I might have dirty hands but my transport is both affordable and fun, and will likely remain that way until my final ticket gets punched :-)

        • Wolf Richter says:

          I totally get why you like your Mustang, and why you like to work on it. But I’d rather have a car that I don’t ever have to work on :-]

        • char says:

          A) you are a welder or
          B) you don’t drive your Mustang in the Winter.

          My guess is B

        • RagnarD says:

          Things I want from a car:
          Look cool / Not embarrass me
          work most of the time
          Be relatively affordable
          Be fun to drive
          Hold what I need It hold at least 95% of the time
          Have an aux jack in the stereo

        • Jos Oskam says:

          == A) you are a welder or
          == B) you don’t drive your Mustang in the Winter.
          == My guess is B

          Wrong. It’s really “C) Living in southern France”

        • Pete in Toronto says:

          Several people say the older cars are easier to maintain oneself versus new models that, when something malfunctions, need a whole computer module replaced.

          A gearhead friend posted on Facebook, “Only with an old diesel Land Rover… do you have to remove the steering wheel to fix the headlamps…”. (He included pictures of the disassembled vehicle.)

      • char says:

        An Dutch 11 year car would be a Flintstone car in the 70’s.

  7. Bobby says:

    I just bought a new ford truck in January and got it delivered in late March. My old one was 22yrs old and repair costs would have been too high. Ford had blowout advertisments, as usual the first month of January for all 2018 models (only 2018 crew cabs though were left on the lot and rows and rows of them!). By March the lot didn’t appear much smaller and their year end blow-out ads were still going. Originally the ad was advertised as sale ends January, but come February and early March the same ad was playing frequently on my local radio station. So it will be interesting April 4th, I suspect it didn’t go well, with likely weather as an excuse. Unfortunately for me I had to wait 8 weeks for a new build, as I wanted a regular Supercab, not the 4 door Crew.

    • Paulo says:

      @ Bobby
      I am in the process of negotiating for a new Ford Ranger. My son receives a large work discount which should bring the initial cost down approx. 20%. If I wanted to buy a full size truck, the discount would be 25%. I’m hoping for manual winder windows, but it probably isn’t an option. :-)

      Why? I am sick of working on my 33 year old Toyota PU as it is now in a recurring irritaion syndrome system failure. I can always fix the irritations, but I am done with it. The latest was a leaking coolant source and I’m not even going to look past the rad hoses. The frame is also shot.

      Anyway, the new Ranger with its 2.3 litre charged mill gets better fuel mileage than my 4 banger Toyota by 1/3. The body panels are aluminum so I don’t have to worry about rust (just like our old land rover). I do use my truck for truck duties, construction, boat towing, firewood. And, it’s a two door super cab. When our 10 year old Yaris calves it will be our main transport. (Yaris has manual windows!!)

      Of course our 38 year old Westie (no rust) is worth more than we paid for it and is slated for fly fishing runs and the occasional Oregon beach trip. We are planning to never sell it. In fact, this winter’s project is to rebuild a spare engine which is sitting on a pallet in my shop. (Manual windows!!!)

      Oh, the Toyota will still be used on property. It just won’t be insured or on pavement. We wring every use possible out of our vehicles. (Broken manual window winder on pax side…cedar shims to hold window up!!!)

      • Bobby says:

        I would have loved to be in your shoes of having a second main vehicle. If it wasn’t for dependability on cold winter days, or worrying about young kids in the backseat if braking down with no AC, I might have spent the 5-6k to fix the 1997, rather than 50k cdn$ after taxes.

      • a reader says:

        Paulo, I think after a lifetime ownership of certain kind of vehicles you might find the new Ranger too high strung with its blown 4-banger, and too complex for a long haul ownership.

        Ford F-150 reg cab / short box might be what you are looking for. Even has crank windows. The 2011-2014 generation reg cab is slightly extended, so has more room behind the seats than the current gen. Get one with the Coyote under the hood, and now you’ve gotten a sports car too! How far do you have to drive on the island anyway?

        Another option is 2008-11 Ranger extended cab with 2.3 naturally aspirated engine. Fuel economy in the high 20s. They are not easy to find though in this combo.

        • JohnnySacks says:

          Tacoma stole that market years ago, that’s where the smart money belongs. GM blew it with their mid sized by total lack of marketing in favor of full sized rather than their Isuzu partnership mid sized vehicles. The Ranger turbo four is going to be trouble long term. Google Mitsubishi L200 for the small truck we should he able to buy.

      • RD Blakeslee says:

        “When our 10 year old Yaris calves …” Neat trick!

      • My grandfather had a car with a crank starter. He could break a wagon team of horses, thought the car wasn’t here to stay.

      • Clete says:

        Rubber doorstops hold up windows too. Yes, I did own a VW with 160,000 miles, why do you ask?

        • MB732 says:

          Clete you got me LOLing with the 3-on-the-tree nightmare and now the doorstops in the windows…Memories…

      • Lion says:

        Liked the “cedar Shims” to hold windows up. Used that method on our old Ford Explorer (back windows). Thought about the cost to rebuilt the window works, then said Nope not happening.

  8. Norma Lacy says:

    They may be “selling” large numbers of these monsters to “murkan” chumps at full price – but in South America there seems to be some dumping going on. There are increasing numbers of these dangerously huge ego strokers menacing the roadways – and lots of “promo” type pricing.

    • HowNow says:

      …”ego strokers”. Sounds about right and appropriate imagery. Good to have a woman’s perspective on this buffoonery.

  9. roddy6667 says:

    I would hazard a guess that the demographic that drives huge trucks as passenger vehicles is the same as the people who have no money saved for retirement.

    • Kent says:

      Yes. And simultaneously voting for the guys who want to cut Social Security to balance the budget. I’m guessing they’re planning on moving in with their kids, if they can ever get them out of the basement.

  10. SnotFroth says:

    I work in a business ancillary to Bay Area auto dealers. For many years it was all peaches and cream, but as of Q4 last year things took on a sour taste.

    One of our clients with seven dealerships closed in Fairfield. The stress and penny pinching in other groups has become palpable. Nissan dealerships seem to be particularly under stress. Two more went down this month. In the last five years, a lot of money from Mexican investors went into local Nissan dealers — guess it didn’t work out well for them.

    Interestingly luxury dealers such as Maserati, Lamborghini, et al. are full of optimism — probably an effect of the sweet, sweet tech money that flows like a seductive gift from Pandora’s box.

  11. Boatwright says:

    Car sales and the willingness of consumers to do into debt to buy have always been a big part of aggregate demand.

    And falling car sales have time after time been a reliable leading indicator of a coming recession.

    And the we have Brexit, over- heated housing markets burning out around the world, etc., etc…..

    Maybe time to hold on to our hats folks?

  12. Kent says:

    I’m thinking of buying a Honda Insight. Good looking car that gets 53 mpg around town. 2 gallons of gas will get me through a week of driving. Prices are low because, well, what kind of dirty hippy would want a car? Especially a well made one with low operating costs?

    And I will pay cash and drive it for 20 years.

    • IdahoPotato says:

      I was looking at a Honda Insight too. My 18 year old Subaru is getting costlier to fix.

    • Dennis says:

      2015 Hyundai Sonata with 60,000 miles on it. Bought it 2 years ago used with 40, 000 on the odo. If I fill it up, I can drive for almost a month(6-7 mile commute daily), bought an extended warranty to cover electronics and power train. I only paid $13,000 for this car, and couldn’t be happier. Drives like new, gets great mileage, and hopefully will be around for many years.

  13. Mike T says:

    How long will the pickup truck craze last with oil, and subsequently gas prices, on the slow boil upwards. WTI is now $63 and Venezuela oil exports have all but collapsed

  14. John Beech says:

    My neighbor traded a 2-year old Ford PU in for one of the Siera 1500 Crew Cap PU trucks. Said it was just ‘nicer’ than the Ford. I’m not exactly sure what was all that much nicer but he was. Of special note; he’s been buying Fords his whole life. However, he felt burned on something or other a few years back with a V-10 engine that was a disaster. The Thunderbird he bought his wife leaked water. Guess he was finally ready to go to the dark side. just kidding. This is a reference to how a lot of truck buyers have ‘religion’ with respect to Ford vs Chevy.

    • Petunia says:

      I had a 94 Mustang which I owned for 14 years and sold with 56K miles. The interior of the car was falling apart although it was garaged and rarely driven. We also owned an Explorer and an Expedition both of which got to under 120K and fell apart mechanically. We were committed to buying American but not any more.

  15. tom says:

    Good morning to the doom and gloom club.
    Just checking in before I get in my ego stroking truck
    and haul my backhoe to the job site.

    Still waiting for the 1 ton prius model to come out
    so I can reduce my carbon footprint. Maybe telsa will
    beat them.

    Would turn amish. But the flatulence from the horses would have the aoc crowd upset. And the road rage from all the ego strokers trying to get around me on the road….

    I do still have a 2000 7.3

    I keep it because I don’t have to put def in it.

  16. MD says:

    So what proportion of these sales are leases? In the UK it’s nearly 90% – i.e. another example of fake prosperity predicated on cheap credit and usurious lending practice.

    Another way of phrasing this question would be ‘what proportion of people driving these gleaming new vehicles have not a penny in savings?’ – the answer to which again would show the difference between genuine wealth and prosperity, and the fake kind enabled by easy money lent to all.

    • Just Some Random Guy says:

      There’s no difference in buying new vs leasing. The vehicle depreciates one way or another. With a lease you pay the depreciation as the payment. With a purchase you pay the depreciation indirectly when selling.

      The problem with leasing is it’s complicated and the average rube doesn’t understand how they work. But if you understand them, you can get some amazing deals. Generally speaking a good lease is 1% or under of MSRP a month with noting down. So a $50K car for $500/mo.

      I’ve leased forever. Car’s always under warranty, every 2-3 years I get something new. I always have the latest safety features which are getting added at light speed these days. And maintenance is virtually $0 cost as well. Never have to worry about tires or brakes. A couple of oil changes and that’s it. Then turn the car in, start over.

      And I have plenty of pennies in savings, thank you very much.

      If you can afford it, drive something nice. Driving a 20 year old Camry is for high school kids.

      • MB732 says:

        Slow day at the dealership?

        • orange cats says:

          LOL. $500 a month forever plus paying sky-high insurance forever plus having to go $$ at signing every three years. If leasing was a good idea dealerships wouldn’t push it so much.

      • Bobber says:

        You get a new car every 2-3 years?

        A couple articles ago, you commented that millennials shouldn’t complain about high housing prices because they are buying coffee and phones.

        I think the Boomers don’t appreciate the major shifts in our economy that are hampering millennials, like obscene housing prices, education costs, and rise in national debt.

        I can tell you it’s not millennials buying those $50,000 trucks that Wolf is talking about. It’s Boomers that have seen their asset prices sky rocket.

        • Petunia says:

          In the South everybody who makes middle class money owns a truck, regardless of age. We are the strange northerners who don’t own a truck.

      • T.J., not the real Tj says:

        You still pay sales tax on an expensive car and often have dealer charges if the car isn’t Perfect when it is returned. I’ll buy your 3 year old lease with low mileage for 40 cents on the dollar or less. I’ll put a ton of miles on it and meet you again at the dealership in 6 years when you’ve turned In 2 or 3 more leased vehicles.

      • Look ma. says:

        So long as you think you are getting an *Amazing* deal, the car dealers will keep fleecing you.

  17. Cashboy says:

    I suspect that FIAT Chrysler is another Parmalat in the coming.

    • Harrold says:

      The new Jeep Gladiator is coming out. They will sell boat loads of those @ $60k.

      • Les Francis says:

        In Australia the new Jeep Wrangler is about to be released.
        $65,000+ for a two door
        $75,000+ for a four door.

        At those prices ypou are competing against BMW X series, MB GLA’s
        Lexus small SUV’s and a host of cheaper Japanese SUV’s much better equipped.

        They will be lucky to sell a handfull of those Wranglers.

  18. Just Some Random Guy says:

    I chuckle at the “60K truck” talk. Obviously from people who have never bought a truck.

    First off, a typical F150 goes for $40-45K. That’s pretty well equipped crew cab. $60K is the every option available model, which do exist, but not many actually sell.

    And then you get to the real price. Ford, GM and FCA are always heavily discounting. Nobody pays close to MSRP. The $45K truck is really $36-38K after all the rebates. And if you time time it right, can be under $35K.

  19. BPeterson says:

    I refuse to buy an over priced truck, same as, I refuse to buy an over priced iPhone.

    Better to spend 5K in upgrading my 09′ GMC Duramax with 120K miles on it. FAR more economical way to get my truck to the 400K mile mark than paying insane prices for a new, and an even MOAR EPA regulated vehicle.

    Bought it new, paid cash.


    Having just returned from a visit to Jefferson’s Monticello & Washington’s Mt. Vernon. It seems to me that freeing my engine from the enslavement of the government is long overdue….. Life, Liberty & the pursuit of Happiness, I hereby grant to my truck!

    : )

  20. MB732 says:

    BMW & Mercedes pickups arriving just in time for peak insanity. Both will flop.

    There is some subtle dynamic in the pickup world that allows for the boss to drive a $70k pickup for 3 years, then pass it on to a supervisor for 3 years, then it can go into the working fleet until it dies. But it MUST be Ford, Chevy or Ram…Possibly GMC has managed to walk a fine line of premium price without looking like a tool on a jobsite.

    This dynamic somehow permeates the personal luxury buyer market as well. Just ask a 2007 Lincoln Mark LT.

  21. KGC says:

    I managed a 600+ vehicle GSA fleet for a couple years. Without those guaranteed sales the big three would have folded years ago. GSA vehicles are replaced at 60,000 miles or every three years, which is absurd. The whole program is a back door subsidy, and it’s closed to “Foreign” manufacturers. (Yes, I know many of these are actually made in the USA.) If you want to see where many of the otherwise “un-sellable” vehicles end up, look at GSA.

    For example, when Congress mandated that a percentage of the fleet had to be EV’s the only viable car was the Honda Prius. This was unacceptable, and so that regulation was “suspended” until Chevy could start delivering their models.

    • Ol Lar says:

      I bought one of those GSA trucks.. 2010 ford f150 4×4.. Nobody has better used vehicles than uncle sam. Every one of them has service records and had regular maintenance done on them, they are a slam dunk in terms of good deals. I say let someone else take the hit on depreciation.. I’ll come in afterwords and buy them.

  22. Arrow says:

    The market will rally hard on all this poor auto data. We’re in the bad news is good news and good news is good news environment again.

    The worse the data, the closer we are to a rate cut and a new round of QE. In his tenure Trump wil fill the whole Fed board with rate cut shills.

  23. Mike Are says:

    Doesn’t the code allow full write-off for new biz vehicles over a certain weight? If I’m correct, I would hazard a guess that many of these super dolled up pickups are builders, contractors, anybody that uses a truck for their biz. And of course, it’s easy to rationalize adding all the extras including the super turbo diesel that sounds like a 747 when spooling up on acceleration.

    “The only difference between the men and the boys is the ….”

    And actually they are still boys emotionally to have to have all this metal and chrome. Some things never change.

    • RD Blakeslee says:

      As the owner of a 1995 Ram 250 with a Cummins diesel, used for hauling a gooseneck cattle trailer among other things, I have a question for Mike: Have you ever actually driven a pickup truck, let alone needed one in your line of work?

    • Crazy Horse says:

      I’d venture that most of the “businesses” are LLC’s established solely for the purpose of creating write-offs. I could point to many property rental agents, hotel cleaners, construction managers, real estate sales persons, interior decorators, office workers and 100 mile per day commuters who fall into that category.

      There is a real world out there, and no amount of delusional behavior or short-term opportunism can change the laws of physics.

      • Rowen says:

        A friend of mine who runs truck sales at the local Ford says that the 90K pickup driver is of two types: the owner of a construction company and a horse enthusiast (usually the wife/daughter). Because most horse operations (even hobbies) are structured as money-losing businesses, these owners don’t see the full 90K after the write-offs.

    • Harrold says:

      I think you are referring to the “6,000 pounds gross vehicle weight” requirement. This does not apply to trucks with a minimum 6′ cargo area.

      Also, the tax requirements do not require the purchase of brand new vehicle, only a vehicle new to you.

  24. Rocky Fella says:

    The way the American economy is becoming a 3rd world economy, with a tiny group of insanely rich at the top, their managers doing ok beneath them, and a vast majority of people struggling to get by and living paycheck to paycheck, then the obvious course for a business is to concentrate on selling expensive stuff to the insanely rich and their managers for ever higher prices. That is until the inequality leads to the inevitable revolution.

  25. dgjesquire says:


    Hey don’t be singin’ ’bout oregon beaches :)

  26. Bobber says:

    Many of the $60,000 pickups are being bought by new retirees, flush with stock market gains, who have new RVs to pull and zero commuting need. I personally have known several boomers who bought the fancy pickup immediately after retiring. I will likely do so myself when retirement comes.

    I predict in 10 years there’s going to be a fire sale on used pickups in great condition with low miles on them.

    • HudsonJr says:

      This sounds like my neighborhood. If they have a boat or small trailer, they might have an SUV with decent tow capacity (Durango or Suburban).

      If they have something bigger like a travel trailer, they have a pickup on the larger side.

  27. Old Engineer says:

    So, what is the cost of collision insurance on a $50,000 to $60,000 truck/SUV? I can’t imagine it. Maybe you can get it with $5k deductible!

  28. Citizen AllenM says:

    LoL, money flowing out the wazoo moment.

  29. Gorbachev says:

    I drive a small Suv but would love a big ass

    truck. Parking in the city is the issue for me.

  30. baldski says:

    I will never understand the need for a 5500 lb. vehicle to transport a 150 lb. man. It makes no enviromental sense.

    • michael says:

      You have obviously never had to haul dry wall, lumber, or cement mix. Try to think beyond your ecology bias.

  31. ft says:

    Maybe it wouldn’t if I was more environmentally arrogant or more of a penny pincher, but it always amazes me when the comments section in these Carmageddon articles turns into a pickup truck bashing contest.

  32. mdh says:

    My 18yrs old Toyota Sienna is still humming.

  33. Xypher2000 says:

    Bought my 2014 f150 crew brand new memorial day weekend for 32k, used 2013 or 12 was 28k. got extended service plan, 6 yrs 100,000 miles. traded in ext cab 2007 colorado for 7k and put down 7k. after everything owed 25k. got 84 month loan to keep payments to 360/month. paid 450/month to pay off quicker. life situation changed and now in a low cost living situation paying off the truck 500 per month, $7,500 left to go. Vehicle prices are ridiculous, but buying used for a little less is even more when you don’t know how the last person treated their vehicle. My truck has had 0 recalls , no issues, and i take very good care of it. Wife has a 2014 Honda accord, but we always go everywhere in my truck as a family, so much easier.

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