Sales of New Cars & Trucks Through October Fell by 2.4 Million Vehicles, to 1985 Levels. Back to the Future

For the Ultimate No-Growth Industry: price increases and pushing consumers into more expensive trucks and SUVs.

By Wolf Richter for WOLF STREET.

In October, eight months into the Pandemic, new-vehicle sales in the US recovered roughly, or not quite, to last year’s October level, depending on how the estimate is done — now that we have to rely on estimates — but left the huge hole intact.

The Big Three US automakers stopped reporting actual monthly new-vehicle deliveries, starting with GM in 2018, and other automakers followed. Tesla never reported monthly US deliveries to begin with, only quarterly global deliveries. All automakers report quarterly US deliveries, except Tesla. So now the industry estimates how many new vehicles were delivered every month. Today, the Bureau of Economic Analysis came out with its estimates for October.

Deliveries in October, in terms of the Seasonally Adjusted Annual Rate (SAAR) fell 3.3% from a year ago to a rate of 16.2 million units. Unadjusted, and not an annual rate, deliveries in October ticked up 0.9% year-over-year to 1.34 million vehicles. This means the new vehicle market has returned to about where it had been before the crisis.

But here is the thing: The crisis – which in terms of new vehicle sales, occurred in March through August – dug a huge hole into deliveries this year: Over the first 10 months of the year, 11.65 million vehicles were delivered to customers. This was down by 17% or by 2.39 million vehicles, from the same period last year.

In other words, so far this year, automakers have sold 2.39 million fewer vehicles in the US than last year, and the return to “normal” left that hole intact.

Over the past 12 months combined, total deliveries dropped by 2.60 million vehicles, to 14.97 million units, compared to the same 12-month period in the prior year. The moving 12-month total deliveries show just how deep the hole has gotten, though it isn’t nearly as deep as it was during the long-drawn-out Financial Crisis that caused GM and Chrysler to collapse into bankruptcy.

The peak year for deliveries was 2016. By 2019, deliveries were down 2.2% and were below the levels before the Financial Crisis, in what is the ultimate mature industry, where unit sales have been stagnating for over 20 years, interrupted only by two deep crashes.

What automakers have been doing to counteract the stagnation or decline in unit deliveries is switching customers from “cars” to more expensive trucks, SUVs, and compact SUVs, and by raising prices on all vehicles.

As a result, truck, SUV, compact SUV and van sales soared, even as “car” sales started declining in 2015 and have not looked back since – a phenomenon I termed “Carmageddon” – with the plunge only steepening during the crisis. During the 12-month period through October, just 3.52 million new “cars” were delivered, compared to 11.05 million new trucks, SUVs, compact SUVs, and Vans:

In October alone, sales of “cars,” at 309,100 units, were down 10% from October last year, and down 48% from October 2015. But sales of trucks, SUVs, compact SUVs, and vans were up 4.6%, from October last year and were up 22% from October 2015.

So this is what the recovery in the auto industry looks like:

  • Car sales continued to get crushed – true to the principle of Carmageddon.
  • Truck, SUV, compact SUV, and van sales ran a notch higher than in October last year.
  • For the 12-month period, both segments combined were 2.6 million vehicles in the hole.

Depending on how strong the recovery will be in November and December, the year 2020 will go down as the worst year in new vehicle sales – in the 15-million range – since either 2013 or 2012.

And as further food for thought on this ultra-mature industry where the only revenue increases come from price increases and a shift to higher-end units: The first time that new vehicle sales exceeded 15 million units was in 1985. Back to the future.

Mall REITs CBL and Pennsylvania Real Estate Investment Trust were both toast before the Pandemic. The banks are stuck. Read… What Took so Long? After Years of Brick & Mortar Meltdown Punctuated by the Pandemic, Two Mall REITs File for Bankruptcy

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  102 comments for “Sales of New Cars & Trucks Through October Fell by 2.4 Million Vehicles, to 1985 Levels. Back to the Future

  1. 2banana says:

    Where does the humble Subaru Outback Wagon fit in?

    I see tons of them…could be kinda of a car and not really a SUV.

    “In October alone, sales of “cars,” at 309,100 units, were down 10% from October last year, and down 48% from October 2015. But sales of trucks, SUVs, compact SUVs, and vans were up 4.6%, from October last year and were up 22% from October 2015.

    • Wolf Richter says:

      It’s classified as a mid-sized SUV. I just looked it up.

      Smaller SUVs (compact SUVs) are built on car chassis and share the power train and other components with cars. And you’re right, they’re essentially cars that are 2 inches higher than cars. It’s a marketing category: it allows companies to charge a lot more for them than they can charge for cars.

      • Dan Romig says:

        When I put the Blizzaks on my RX450h Monday, I will be happy with the extra ground clearance, AWD and damn good snows to be ready for winter.

        Small SUVs are very utilitarian, and it does make sense that so many have chosen them over small or mid-sized sedans.

        A business owner near me needed to replace his Buick last week. “The Malibu seemed too small. The Impala was too expensive. I went with the Equinox.”

      • Wes says:

        The actual new vehicle sales can be calculated using monthly state new vehicle sales/registrations but is very difficult time consuming. Correct me if I’m wrong, but the crossover CRVs and SRVs are included in the truck/ suv segment.

        • Wolf Richter says:

          The public cannot get monthly state registration data in a timely manner, if at all. For example, California publishes registrations only quarterly, months behind the fact. Different story in Europe.

      • Michael says:

        With less fuel efficiency than their car counterpart

    • Morty Mc Mort says:

      Average NET cost of owning and running a car, per year – Pegged at 15,000 Dollars per year. Depending on your tax bracket.. how much would you have to earn to have, 15 thousand to spend?
      The best car, I ever drove.. was the one I never bought.

      • Happy1 says:

        NerdWallet has this cost at 8,500$, your cost seems ridiculously high.

        My personal cost all in with a 14 year old 4 Runner purchased new with insurance and repairs (one wheel replacement, that’s it) is less than half that, and every year I drive, the cost dips lower. And there is still 8K or so of residual value.

        Cost on some of the used cars we have driven have been even lower.

        But living with fewer cars would be great.

        • Paulo says:

          This depends on if you paid cash for car or bought on credit. I once bought a used Toyota 4X4 pu. I rebuilt it twice to keep it looking newish as they are rolling rust buckets. Cost of vehicle + all rebuilds and maint (including tires, batt etc) worked out to $1,000 cdn per year. One day I smelled the gas line leaking for the 3rd time and I sold it to a kid for parts for $100. The biggest load I hauled with it (I made racks) was 1,000 pounds of flooring in the box while towing another 2500 lbs of flooring on a trailer. (Bamboo flooring is heavy). One day I hauled a load of 20′ 2X10s that were so heavy the front wheels would float and barely steer.

          Right now I’m using a full size GMC Sierra super cab with about 100K miles on the clock. It is 18 years old without a drop of rust. It looks news. I do preventative maint on it and have not had one problem in two years. Tires and brakes were new when I bought it from a family friend. I paid 4K for it and expect to get another 10 years out of it at least…maybe more.

          Buy used and do preventative maint and the costs of operating a vehicle is low. I used to do my own maint and have stopped doing it with this vehicle as I tended to fix things when I had to. Now I just take it in twice a year for servicing and a looksee. Cheaper to replace things and do work before stuff breaks.

        • 91B20 1stCav (AUS) says:

          Paulo-would that your final sentence could/would be applied by most of us to most things in life, rather than too-often observed in the breach.

          Perhaps the core of entropy is the tossing of the baby out with the bathwater while reinventing the wheel…

          may we all find a better day.

        • Young Buck says:

          I have 3 vehicles that I bought used for cash. All 3 combined cost less than $15k. Insurance is $1200 a year full coverage, and the only repairs i made in the last 3 years, which i did myself, were the coolant crossover gasket on my G6 ($30 but lots of labor) and a water pump on my Tahoe ($150). Im not counting regular maint items like oil or tires, only out of the ordinary repairs.

          So why even mention this? Well its because if you’re smart, can youtube car repair videos, and make informed purchases, you can have multiple vehicles, for more fun, that cost less than a new chevy cruze. I have a 4wd tahoe for towing, hunting, and snow, a pontiac g6 for daily driving, and a camaro z28 with an ls1 for fun.

      • TnAndy says:

        15k/yr sounds kinda high. We bought a new Subaru in 2011 for $30,000 cash. 9 years, that works out to 3,333/yr straight depreciation. (We’ll likely keep it another 5-6 yrs, so that works out to around 2k/yr assuming zero resale value).

        We drive it around 8500 miles/yr (actually a lot less now my wife has retired, it is primarily her car), it has 75k miles on it. At that 8500/yr, it uses around 300 gallons of gasoline, say at $3/gallon ( currently $1.70/gal here), that is 900 bucks.

        Full coverage insurance runs $800/yr including part of the $2mil umbrella for house/vehicles.

        Maintenance has been minimal, one set of tires since new ($400…..50/yr). I do the oil changes……$100/yr. Hasn’t needed anything else.

        That works out to 2k/yr depreciation + around 2k/yr for everything else……whole lot less than $15,000.

        How much would an Uber cost for 8,500 miles/yr ?

      • jlmac says:

        Nice, but for most of the country that is impossible.

      • Jdog says:

        I can easily keep my costs down to about $1500 a year. The biggest expense in car ownership is ego. Once you get past that, car ownership and use is damn cheap when you consider the freedom it provides…

      • Jim says:

        The best car I ever drove was a bicycle

  2. BuySome says:

    Oh poor Einstein…put his past future hopes into DeLoreans evolving to fushion generated electric flying cars. Then that darn uppity teenager had to go promoting Toyota pick ups and ruined the plan. Now poor Einny’s lost his cookies and is pushing up squeaky toys in Potter’s field just beyond the suburban housing developments where the roads just keep on going. Or at least they pretend to extend. But we all know the roads in Pleasantville just take us right back to the beginning where debt is a four letter word.

  3. Nacho Libre says:

    All stimulus $$ went into stonks, not honks.

    Me heard China is back on track buying up German luxury cars.

  4. Javert Chip says:

    I enjoy splashing around the performance car end of the automotive pool (currently driving a 2020 BMW M8); I’m retired, but I’ve fully devolved back to about 18 years old. I do save the wild & crazy stuff for infrequent but adrenalin-drenched visits to the performance track.

    With ever increasing percentages of trucks, SUVs & whatever on the road, it’s noticably more unusual to find an actual car.

    That not withstanding, I’m quite surprised at the intense interest Bubbas have in, shall we say, relative acceleration profiles of “humongous trucks” and an M8 (ALWAYS a painfully humiliating experience). After 2 months, even I have grown tired of wasting gasoline on this exercise.

    However, if I ever find myself frequently needing to bring home a couple tons of cow poo for the front yard, I, too, will buy a truck.

    • Zantetsu says:

      Pretty sure you can rent a truck when you need to haul manure.

      I think motorcycles are the ultimate fun when it comes to fast vehicles. I never bother with fast cars as they seem pointless after riding a sportbike for years.

      It’s not really exhilarating unless you are risking your life every time you turn they key, you know.

      • Javert Chip says:

        Risking my life every time I turn on the key to see how long a blood & guts slime patch I can make is not in the cards.

        In just the last 10 years, this 74-year-old geezer has absorbed many intense thrills, and fully intends to extend the streak, which includes:

        Rafting 287-miles of the Grand Canyon, literally crawling thru pyramids at Giza, learning to make egg pasta in the kitchen of a Tuscan restaurant, and having been on the lunch menu of various critters during an African Safari (ever been charged by a 12,000 lb male elephant in musth?).

        Carpe diem, and don’t let go easily.

        • Paulo says:

          Nice comment.

          We dodge bears here and a few years ago I was forced to shoot a cougar at about 25 feet. Adrenalin fest, and my wife freaked out. The cougar killed my sheep and was going for me next. These days we pack bear spray instead of a rifle.

        • Zantetsu says:

          Ooh you should turn all of those into Facebook posts.

        • andy says:

          Try base jumping while riding a horse. Highly recomended. Like in that movie The Revenant.

        • Javert Chip says:

          Andy

          Not even gonna ask what happens to the horse…

    • rhodium says:

      Attn Bubbas,

      Kinetic Energy = (1/2)mv²

      I would do the algebra to show why you need exponential amounts of energy (which in addition is pretty inefficiently translated into an accelerating force by an internal combustion engine), but I decided it’s not worth my time.

      The point is Bubbas are always trying to fight the universe. Bubbas, why are you doing this? Don’t you understand physics?

      • Dan Romig says:

        Yes, but kinetic energy is more important for stopping and turning.

        I think Javert Chip is talking about getting up to speed from a slow or stopped speed. His M8 weighs 1,952 kg & has 600 hp. But is has all wheel drive and goes zero to 60 mph in 3.0 seconds! A racetrack is the proper place to fully enjoy that machine.

        My M4, with manual transmission, takes 4.2 seconds (4.1 for the double-clutch transmission). To Zanetsu’s point, my sportbike weighs 209 kg without me, has 175 hp, and with the right driver goes zero to 60 in 2.8 seconds.

        The thing is, that they do whatever you want – without even trying. Want to get by and around a truck? No problem. Want to merge into the freeway with traffic moving fast? OK, no problem.

        Acceleration = force divided by mass. Or, F=MA. Physics does come in handy, eh?

        As much as I enjoy my car and motorbike, I spend more time on my bicycle, and its disc brakes are amazing at stopping my 100 kg of man & machine when dealing with kinetic energy. Winter is on the way though …

  5. The U.S. automotive industry is a prime example of an industry operating with significant over-capacity, domestically and globally, and trying to sell into a very competitive marketplace where the customer is less and less able to absorb the price increases necessary to keep the industry almost solvent. Tesla pricing and fundamentals are a wreck in progress!!! There will be many more bankruptcies in the auto industry in the years ahead, because $35, 000 cars and $45,000 trucks/SUV’s do not mesh with a populace that has seen little to no growth in After-tax Personal Income over the last 30 years. Not to mention most vehicles can go 7 years to 8 years without major engine and tranny repairs, easily to 120,000 miles.

    With Hertz and other rental companies sitting on hundreds of thousands of low-mileage vehicles due to the evaporation of business and leisure travel in 2020 and beyond, if one waits until Spring of 2021 until the pain in dealer inventory gluts is more acute, a ride with only about 25,000 miles will be had for around $13,000 and financing at about 3% over 4 years.

    In today’s market, esp. with counties raising Personal Property Taxes on vehicles to try to plug gaping revenue holes, a slightly used vehicle is a much better economic choice than buying new with a higher Book Value. Will never buy new again, and the VA Car Tax is also a big reason why.

  6. Sporkfed says:

    I saw a Delorean for sale the other day.
    Coincidence ?

    • Javert Chip says:

      Maybe it just returned from the future…

      • Anthony A. says:

        WE actually have a Delorean dealer here in Houston who refurbs old ones and resells them.

        • Zantetsu says:

          I am pretty sure it’s the *actual* Delorean Motor Company, or at least the intellectual and manufacturing property thereof. They can make you a brand new Delorean from excess parts originally manufactured but never used. And of course they can refurb existing ones too.

        • Zantetsu says:

          Correction: it’s just the parts they bought and there appears to be some effort to make a wholly new car design? But the Houston company is not officially part of the original DMC. They just bought the parts and some presumably some rights to make new cars and call them Deloreans.

  7. raxadian says:

    Hey Wolf!

    “For the Ultimate No-Growth Industry: price increases and pushing consumers into more expensive-”

    Sounds a bit like Apple don’t you think?

    • Prof. Emeritus says:

      Most Apple products have kinda reasonable depreciation during it’s life cycle compared to premium automobiles.

      • Javert Chip says:

        Eeehhh…I’m not buying that.

        I’m definitely not saying Apple builds low-quality stuff; it’s just that consumers currently willingly pay premium prices to buy state-of-the-art technology…and the rate of technological change is rapidly accelerating.

        o a 3-year-old iPhone is 66-75% less than original cost.
        o a 3-year old premium car is about 50% of original cost.

        (Note: PCs depreciate even faster)

        The human eye can only “see” so many pixels/inch – soon, improved screen resolution will mean nothing. At that point, consumers will chase the next great status thing; 35 years ago it was Gucci belts & shoes, before that “pet rocks”.

      • RollingStone says:

        I would agree. Owned an iPhone 6s and it worked flawlessly for 5 years. Replaced batter once only.

      • raxadian says:

        Yes, you definitely need a 999 bucks monitor stand, is way better than the one you bought last year!

    • Cas127 says:

      Yes, but the auto biz has no Steve Jobs and his Incredible Reality Distortion Field (well, there is Musk…but there is also the internet now to pee in his punchbowl).

      It really is pathetic that all auto makers (except the Chinese) have essentially given up entirely on trying to improve productive efficiency (ie, lower prices…which would lead to growth).

      The makers are all too compromised by their financial/product lineup engineering to, you know, make a better, cheaper car.

      Now it is all about using ZIRP to bamboozle unqualified buyers to “buy” overpriced cars and then sell the doomed auto paper to some ZIRP deranged sucker.

      It is symbolic of just how sclerotic the upper echelons of American society has gotten.

      • raxadian says:

        Steve Jobs is dead Jim.

        But what about-

        Dead.

        And-

        Left to another company.

        Then how about-

        There is no mote crappy heafphones included because they no longer include heafphones or a charger. Next thing you know they will charge extra for the battery and the box!

      • Bob says:

        US automobile companies do work on efficiency, the problem is those gains go into the pockets of the UAW. Union work rules result in horrible inefficiency. Also three-fourths of plant management time is spent on UAW issues.

        • Boomer says:

          Union bashing is such an outdated screed. The increasing cost of automotive is directly related to regulatory overburden.

    • kevin says:

      I always laugh at the Apple fanboys now, who know very little about IT/software or product development, yet merely try to look like cool douchebags with their latest over-priced shiny “i-Whatever” gadgets.

      Granted Apple did have great innovative products during the early years, its now all a matter of churning out apparently “new” models to fool Apple fanboys into parting with their money, while rehashing their products using old templates with very little meaningful innovation.

      Besides Apple, I know from personal experience that many tech companies intentionally build-in “planned obsolescence” into the product roadmaps. That way, they can do the next product iteration with minimal effort & cost (e,g. modify an ABS plastic piece so that you cannot do backwards compatibility with a product or make the firmware such that your product will not work well with the next “new” in-thing – which we had already planned to release months ahead.

      That way, consumers (aka idiots & fanboys) are always pushed to pay top dollars for “upgrades” which cost little to the company and contribute to fat profit margins.

      I’ve even sat on meetings before where we had software engineers develop firmware for next 3 iterations of planned product releases:

      – In ver 1.0, the IT product has A/B/C/D/E functionality all ready developed in advance, but it has only enabled A/B/C functionality, all controlled via software flags.
      – In ver 2.0, a “new” IT product is marketed with additional “D” capability. H/W is hardly changed except for some molded plastic parts so that you can’t reuse the old H/W platform. lol
      – In ver 3.0, another “brand new” IT product now gets the software engineers to simply change a flag to now ENABLE functionality A/B/C/D/E, recompile, drop it to the factory servers and burn-in to the products. All in a day’s work.

      I suspect the same platform approach may be going on with Tesla’s OTA upgrades and other product manufacturers too. This method is just too lucrative to let pass…as long as we have raving Fanboys & girls too. lol.

      • Cas127 says:

        Apple has been getting rich off hipster doofuses for decades…but now it has reached globe spanning scale.

        Android smartphones available for $10…but please pay $500 for the privilege of locking yourself into a walled garden.

        The real question is why Android has not been able to (yet) do to the iPhone what the PC did to the Mac…render it a small niche mkt.

        The underlying economics seem at least roughly the same…i would not bet on Apple dodging the common sense bullet forever.

        Especially given their revenue levels and mkt cap.

        Apple’s own awareness of the danger to them (Can only go down from here…) is what drives them to things like Apple TV.

        • astropuppy says:

          Or what Hitachi did to IBM mainframes! Proprietary systems never survive, just a matter of time.

        • Javert Chip says:

          Cas127

          2 points:

          1) Only hipster doofuses think the above only applies to Apple

          2) Congratulations. You have now discovered that people buy things for LOTS of different reasons, thus demonstrating a firm grasp of the obvious.

  8. El Duderino says:

    Only way to combat capitalism is minimalism. The only way combat minimalism is discipline. The only way to combat discipline is trial and error. The only way to combat trial and error is awareness. The only way to combat awareness is meditation. The only way to combat meditation is openness. Amen.

    • Bob says:

      The only way to combat totalitarianism is capitalism. Allow people to make their own choices. Keep the the fruits of their labor.

      • 91B20 1stCav (AUS) says:

        Bob-how/where does Smith’s requirement for ‘well-regulated markets’ enter your calculus? Matters of degree, well, matter.

        may we all find a better day.

      • ultra says:

        Except many people don’t make their own choices under capitalism because 1) what they want isn’t available from the mass market, 2) they don’t have the money for what they want, even when it is available from the market, and 3) they are brainwashed through advertising to “want” what they don’t really need. See the discussion about Apple fanboys above.

        Other assertions in the remaining two sentences are also problematic.

  9. Hernando says:

    I got a sweet 2019 tacoma last week with leather and moonroof about 8-g’s off what it could have fetched just a few months before.

    Could of been a fluke. But who knows. They said trucks are flying off the lot.

  10. Steve says:

    Buying used cars with the radio buttons all tabbed to local Christian radio stations or chick music stations is the best strategy to buy a lightly used car.

  11. Sea Creature says:

    Cars these days are small and cramped. SUVs are bigger and comparable to the larger cars and station wagons of the past. I think the reason for this is regulatory? (Fuel efficiency which trucks and SUVs get a pass on)

    So it’s natural people are buying more SUVs trucks and fewer ‘cars’, to get the same space and size as before..

    • Zantetsu says:

      Also butts are a lot bigger.

      • Ulev says:

        (;>{=…,,2010 Prius III still takes me anywhere I need to GO, plus 47 mpg on average.
        Obviously, I am ‘beyond’ kids and fanboy status seekers…
        Harken back in time to having a reliable horse’
        One would ‘never be rid of’…

    • Richard says:

      Maybe I’m unusual, but I like smaller cars, I wouldn’t mind kei cars at all if they starts selling them. Most people drive suv/truck to work has way too many empty spaces and unnecessary weights… and these people advocate green life lol, how hypocritical really.

    • Wolf Richter says:

      Sea Creature,

      “Cars these days are small and cramped.”

      In the US? Not.

      • Sea Creature says:

        Yes. A Ford LTD or Plymouth Fury had way more space than any car today (trunks were huge, and they legitimately seated 6 people easily with tons of legroom). The wagon version (Fury, Satellite) even more space.

        Even look at Lincolns from the past versus today (it’s some sort of compact car these days when before they were land yachts comparable king cab trucks today). People who want that kind of space these days are now buying SUVs or trucks.

        • Sea Creature says:

          Btw great site Wolf, I love reading it each day!

          @Richard, yes the kei cars and trucks were fun, I used to rent them a lot when living in Japan. Nice for tiny twisty narrow roads which there are lots of in Tokyo

          @zantetsu..yep I noticed that too after returning from 20 years in Japan..people in the USA got H-u-g-e but all the big cars from the 70s and 80s were gone.

        • Jdog says:

          Back in the day, you could fit 3 or 4 friends easily into your trunk and sneak them into the drive in……

        • Javert Chip says:

          jdog

          I hereby attest that was true.

      • Too Tall says:

        “In the US? Not.”

        Maybe not compared to cars in Europe, but they US cars are definitely getting smaller all the time. I am 6′ 10″ tall and I have a minor hobby of trying to find cars that I can fit in well enough to drive. Every new generation of vehicle shrinks in some small way, at least in my opinion. Of course I am a special case in that I am in the 99th percentile, but that also makes me much more sensitive to things like sunroofs that take away head room and dash configurations that stick out just a bit too far.

        I am currently trying to find a car for my wife that I could drive if necessary. She likes smaller rather than larger, but I’m having no luck at all finding anything smaller than a mid-size SUV that I would be willing to drive for more than 10 minutes. I’ve even found that some full size trucks have been shrunk to the point where I wouldn’t buy one. GM vehicles are a good example: They have narrowed them to the point where when I sit in them, my shoulder is tight up against the door post to the point where I can’t even sit up straight.

        Back in my youth I drove a Toyota Corolla. Of course, I moved the seat a bit farther back than stock, but still… Don’t think I could do that today.

        • 91B20 1stCav (AUS) says:

          TooTall-golly, i’m only 6’4″ and was having this issue back in the early ’90’s. My wife, on the other hand is only 5′. Appreciating and adapting to each other’s physical (not to mention fiscal) limits in moving-average environment has made for an eventful life and marriage…

          may we all find a better day.

        • Javert Chip says:

          Too Tall

          2 words:

          Porche Cabriolet

        • Javert Chip says:

          Ok, Porsche Cabriolet

        • Too Tall says:

          A Porsche Cabriolet??!?!!?!??

          HAHAHAHAHAHAHAHA HAHAHAHAHAH!!!!!!

          *snifs*, *wipes tear*..

          HAHAHAHAHAHAHAHAHHAAH!!!!

          Two things:
          – Michigan roads
          – budget busting

          That thing would be in the shop more than on the road with the conditions we have where we live, and I could only drive it nine months out of the year.

          As far as the budget thing, I’m not sure that if you added up all the money I’ve ever spent on vehicles in my 40 years of driving it would be enough to buy one of those.

  12. George W says:

    The humbled consumer is no where to be found.

    When Ford Fiesta’s outsell Ford F-150’s economic reality will have been found.

    The US is on an economic stimulus lifeline. Nothing I read about matches what I see on the ground. I have a limited view but how can ports be swamped while Amazon deliveries are off by 50%? I don’t care what is being reported, Amazon packaged counts dropped in half after the stimulus ended and have not returned.

    Utah’s growing demographic reality projects one of the best economic situations in the US. Amazon continues to hire for the Xmas season yet package counts remain stagnant.

    Economic reality is a Ford Fiesta or even a mountain bike but not a Ford F150.

    • Cas127 says:

      So long as Ford can shovel that doomed auto loan paper down the gullet of yield starved suckers…er, investors…the selling of overpriced cars to underqualified buyers will continue.

      The makers are all just bad faith middlemen more and more (also, see, banks…). They cultivate financial idiocy and then lay off the unavoidable risk,

  13. Richard says:

    So if EV starts to eat up the ICE market eventually, and due to cheaper price trend of EV like you have advocated… Mr. Wolf, May I assume the whole auto industry has less prosperous future than it had in terms of total revenue and possibly profit as well? Wealth, just one bucket of water dumped into another bucket, but smaller bucket perhaps?

    • Wolf Richter says:

      German automakers and component makers have already announced 10s of thousands of future layoffs due to the shift to EVs. Yes, it’s going to be painful.

      • MCH says:

        Fortunately, the German auto industry has a much stronger union relatively speaking. I think they’ll ultimately be just fine. Unless people are saying they no longer care for fine German engineering.

        • Latifundius says:

          German reader here with some view into the OEM industry: The trouble is that the value chain in Germany is focused on key components of the ICE, such as drive trains, gearboxes, engines etc.
          Even if Germany would be able to covert to EV production on a large scale (which is unfortunately doubtful), the added-value of the engineering side in an EV vehicle is just so much smaller compared to a classical ICE car.
          So even with stronger unions, it is likely that we will see a huge job loss here (maybe spread over a longer period of time) but with the same end result.

        • Prof. Emeritus says:

          Addendum: The reason many of those German companies lobby for plug-in hybrids as a present solution is to keep those ICE supply chains running and milk them as long as possible.
          See ZFs take on the topic for example: https://www.youtube.com/watch?v=jStVzd_DCh8

      • The massive job losses to the U.S. automobile industry from any Government mandated elimination of ICE rides such as in CA will be at a time when the country is already in Depression. Politically, whatever was said on a campaign trail becoming political suicide, such upheaval when inflation is back on everything from soup to nuts from a collapsing Dollar (American election process a real confidence builder!!!) will cause the unemployment rate to deteriorate even further from today’s already Too Big To Bear levels.

        The Green alternative has always been, outside of Government tax and development subsidies, is always an economic decision, esp. in Hard Times. Oil won’t stay at $40 per barrel as we head into Year Two of a multi-decade economic depression, and ICE vehicles will become cheaper to purchase and operate than the EV alternatives which are very pricey even today in comparison to a country swimming in used ICE vehicles. Ever price replacement batteries on these vehicles? and what is the net carbon footprint of the industry?? Carbon emissions from electricity generation and battery production is still significant in itself. How biodegradable are the conduction plates in EV batteries???

        • 91B20 1stCav (AUS) says:

          David Y.-cogent observation. It could be seen as part of the mass psychological struggle with great change-change, sudden or gradual, is rarely complete in the present, its wave often existing prior/over/beyond one’s lifetime…

          may we all find a better day.

  14. David Hall says:

    I am retired. My driving mileage has been reduced by the pandemic. My tires are five years old with good tread. My car is five years old and I may keep it another five before buying something with more safety features. Warren Buffett kept a new car ten years before buying a new one.

    • Probably doesn’t like the new technology learning curve. I wonder how much it would cost to retrofit one of these mobile Iphones with a key ignition, disable all the BS so you can just get in and drive?

  15. Crush the Peasants! says:

    Is there any way to present data on the “stickiness” of new vehicle sales? That is, what does new car loan default/repo versus time from purchase data look like?

    • Javert Chip says:

      Crush the Peasants!

      I just went out and Googled that (end to end took 7 seconds). Interesting.

      You can do it, too.

  16. endeavor says:

    EV’s will push the cost of ownership of both ICE and electric to the moon. Taxes on gasoline will rise to fund charging infrastructure and the hundreds of billions needed to upgrade the power grid. Who else will do it? Private equity?

    • NoFreeLunch says:

      It is interesting to compare the US and EU strategy on renewables. The EU will only mandate a shift to the degree that the supply of raw materials can be accounted for, so mines are opening up all over Europe, or remote contracts are locked in long term. In the US, states mandate and just hopes the raw materials will be there. The EU admits they will need 60 times the lithium they currently have access to to make their goals, while US state governments stick their heads in the sand when they mandate. It takes 2 years from claim to production in much of the rest of the developed world, and 30 years in the US (100s of permits needed, and many have to be done sequentially). The US government disbanded the Bureau of Mines years ago. If US sources are needed, the state goals for renewables being set will not be met by a longshot.

      • 91B20 1stCav (AUS) says:

        NoFree-very well said re: the U.S.-in a relatively short time we have generally benefited (okay, given that term on its own would be subject to a very long debate) from such a spread of scientific/technological efforts in the last 200 years that we (who have little connection to those efforts other than the consumption of their fruits) have come to expect that they can be dictated. (the Sharpie, an absolutely amazing invention, and what you can DO with it, at any Governmental/Societal level, be it regulations, maps or graffiti…).

        may we all find a better day.

      • Wolf Richter says:

        The price of lithium carbonate (99.5% Li2CO3 min, battery grade) has plunged by over 50% since 2018. There has been a surge of production. Who knows what happens 10 years from now, but for now there’s something like a glut:

        Chart via:
        https://www.fastmarkets.com/commodities/industrial-minerals/lithium-price-spotlight

  17. Martha Careful says:

    FYI, from S&P last month:

    Global Auto Sales Forecasts: Hopes Pinned On China, Sept. 17, 2020

    We now forecast global auto sales will decline by about 20% this year and that two years from now sales will still be 6% below 2019 volumes.
    We continue to believe that the Chinese market has the potential to resume moderate long-term growth, and project it will be the only region to recover to 2019 volumes by the end of 2022.

    In Europe and North America, sales showed signs of stabilizing in July and August but we don’t expect these markets to fully recover their steep declines within the next two years.

  18. Chris Herbert says:

    Nice run of comments. Solar produced electricity is becoming the cheapest electricity. And it will get cheaper. Income growth is a Congressional decision. So is unemployment. We are in for a series of mini-crashes, punctuated by a series of major ones. The nice thing is we don’t have any other choice. So we will do what is required. Full employment guarantee. You unemployed and want to work, Congress will fund your new job. With bennies. Not inflationary because this labor was idle. Everyone will clamor for EVs. Road and bridge maintenance will be funded nationally. States don’t have the revenue to keep it up. Deficits list: Savings, infrastructure, health care, good jobs, democracy, education. Public debt? Not a problem. Let it ‘roll off’ and don’t replace.

    • Lisa_Hooker says:

      Chris, that’s the most pollyannish future I’ve ever read. Congrats. EV = Ever Voltaire.

    • Jdog says:

      That is about the biggest load of manure I have read in a while…..

    • Anthony A. says:

      ………”Congress will fund your new job. With bennies”……Congress doesn’t know who you are, or care……Open your eyes.

  19. David G LA says:

    “ Depending on how strong the recovery [SIC] will be in November and December…”

    Did you mean to write: “Since there is almost no chance of a recovery in November and December…” ?

  20. Trailer Trash says:

    Drivetrains had to be improved to last 8 – 9 years to support the 96 month notes they are now selling. Eight years to pay for a car! If a person can only buy a new car every eight years at most, that will certainly cut into demand.

    I don’t see how prices can go up much more. Will people really pay $80,000 for a ride and spend a decade paying off the note?

    • Anthony A. says:

      Very few people who finance a car for 8 years end up keeping it that long.

      Those who don’t, generally roll the “owed” amount after the trade in into the “new” note. (and drive away with a big smile on their face !)

      It’s the American way…

  21. David Crosby says:

    The two edge sword. On one edge is a reduction in buyer credit quality and the other is the work from home deal. Now add in the fact car quality gets better year in year out improving product life cycle. I know, I’ve been a mechanic for 40 years.
    IMO. there shall be no new cars sales upside for some time to come.

  22. Rumpled Bemused says:

    Money was borrowed to build the car, money was then borrowed so the dealer could pay the builder, the dealer then borrowed money to finance the buyer who has no money, the buyer then leaves with the car having paid nothing down and with no payments expected from that individual for months. This is what we are calling a sale?

  23. Randy says:

    I recently was looking at cars. There all junk now. Tin can with wheels. Decided to keep my old truck truck and restore it. It’s a antique but it’s better than this new.junk. show me a part on these vehicles that was made in the US. Cars and trucks are pure garbage. Over engineered junk. Technology sucks. The old adage if it ain’t broke don’t fix it applies here. Bunch of over engineered tin cans with wheels that are extremely overpriced.

  24. Mattacks says:

    Not saying that your factors for lower sales aren’t true, but they don’t yet appear to be affecting sales. The only reason auto sales are down right year over year is because of a current industrywide shortage of supply. I think it’s next year we actually start seeing some economic factors start affecting the industry more negativity.

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