The Ugly World Of Auto Sales

testosteronepit's picture

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rajonmestra's picture

Well, the automotive industry is the most affected portion of the double financial crisis as it ruined the revenue of different countries around the world. For years, there have been a couple of discrepancies on this parts especially to giant auto makers like ford, chrysler and GM. Once the main factor has increases its numbers, there would be a domino effect on the other side of the economy. It started with the gas cost plus the newly launched models, which decreases the sales of these big three auto companies. Instead of having the expensive one, they would go on with the cheap one. Or even instead of buying a new cars, they would just go on fixing with the presence of replacement auto parts. However, let's just hope we'll come up with a progress for the upcoming years to come.

augmister's picture

Own all our vehicles outright.  2005 Honda Hybrid, 2006 Ford Ranger with both under 70K in miles.   Just paid cash last year for a new Subaru Forester.   Garage the Honda in winter and commute with the pickup.  I am done buying cars.   Bring on the collapse!

Stuck on Zero's picture

Toyota and Hyundai/Kia accept continuous huge funding from their governments.  Between "free R&D money", zero interest loans, and government protection through tarriffs and kickbacks these two companies are the champions of government intervention.

atomicwasted's picture

Ford drank some of the energy koolaid but didn't take the bailout funds.  That's why I keep driving Ford.  Fuck Chrysler and Government Motors.


infotechsailor's picture

its an honorable stance, but you're paying for that GM product either way. That's like saying you won't send your kids to public school because those darn teachers took government money. Do I agree with you that the government is wrong and the people are stupid for allowing it? yes. But are you helping anyone by refusing to by the GM/ or chrysler? not necessarily. I suppose if enough people got pissed at GM for the same reason, perhaps you can implode GM (sooner than they will have, though obviously later than they should have).

disabledvet's picture

the ugly world of the oil powered piece of shit is more like it. The Solution is coming! Invest accordingly!

Are you kidding's picture

What?  NG?  We couldn't pomp it out of the ground fast enough to replace oil.  Oil is fucking awesome stuff!  Very energy dense and it's chock full of goodies.

CrazyCooter's picture

Totally anecdotal, but I sold my paid for 2007 300c to buy a Subaru Outback in August. Part of the price of moving to Juneau, AK. I love my baby, but I had to let go. I desperately wanted to buy a 2012 Jeep Wrangler, but the factory back orders were so bad and the finance markets so messy, both the local Jeep dealer and myself were not comfortable ordering a custom vehicle to wait several months for delivery (no financing guarantee - its re-finance after 30 days).

The Subaru is the consummate vehicle here in addition to their resale value, but I just don't like it that much. I look forward to getting into a Rubicon in a few years, as much as it pains me to shuffle vehicles like this ... but I take good care of my vehicles and drive em 10 years so ... all part of starting over I guess.

Anyway, don't make a difference to traders, but for what its worth ...



DoChenRollingBearing's picture

Watch Hyundai!  They are kicking ass down there in Peru.  Price and quality.

About a year ago, I think it was Fortune that had a great article on Hyundai, how they were Toyota's nightmare...

Our company there in Peru is proud to serve the Korean fleets.  Hyundai...  You will see and hear lots more from them.

Gmail me at my name if you would like a link to my blog.  Reassure me you will behave...

bigwavedave's picture

I am curious to see if there is anyone doing data analysis on NEW vs USED car sales. My guess is that most NEW buyers cannot afford a USED car.... 

brown_hornet's picture

"Particularly Toyota is vulnerable; numerous recalls and safety scandals have wiped out its previously untouchable aura of quality that (once upon a time) had propelled it to the top of the heap."

Thank you MSM and guvmint for this bunch of lies. Toyota quality will reassert itself in the coming years. Go buy an American "Fix It Again Tony" or one from the GM collective. Camry has more American content than a Focus. And non-union at that.

Smiddywesson's picture

I have never owned a "foreign" car in my life.  After the bailouts, I will never buy a vehicle from a bailed out company, never.  I don't have a political party anymore, because TPTB control both sides of the aisle, but using taxpayer money to bail out the unions because they support your party will never be forgiven.

atomicwasted's picture

I bumped you and I hate fucking flimsy Toyotas.

Scritchy's picture

Rental car agencies buy vehicles by the millions, as do local, state and federal governments. Would be interesting to see how those numbers figure into this.

testosteronepit's picture

"Fleet sales" are included in these numbers. They can vary dramatically from month to month, but nothing unusual was going on September.

Scritchy's picture

Thanks TP.  This whole gov't motors thing had me wondering if they were up to their usual tricks.

Titan Uranus's picture

Americans use automobiles more inefficiently than people anywhere else.  The next time you are in heavy traffic, count the number of people in each car - 8 or 9 cars out of 10 will have one human on board.  I suspect that as things get tighter economically and people start pooling their automotive resources, we'll see decreasing sales figures become the norm for more than just a quarter or two. 

Smiddywesson's picture

I suspect that as things get tighter economically and people start pooling their automotive resources, we'll see decreasing sales figures become the norm for more than just a quarter or two. 

10K baby boomers are retiring each day.  They won't be buying new cars all the time anymore.  They don't need a new stereo, or skies, or that large home they live in now.  ALL markets and industries are going to shrink.  There's just no way around it.

Seer's picture

Yup!  Things will become as they should, tools.

When people discuss mpg I point out that it should be Pmpg- People Miles Per Gallon.  That Hummer, IF loaded, could be getting more pmpg than an SOV Prius; but, it's pretty much the norm that people in Hummers don't pack them full of people.

I've got a farm and I don't have a truck!  On-farm I use my tractor.  I cannot afford to have an additional vehicle, and my commuting expenses dictate that my vehicle gets high fuel mileage (my 21 year-old econo car gets nearly 40 [P (SOV)]mpg).  If I need to really haul stuff on/off farm I RENT a truck; this requires a bit of planning, but that's what it's all about anyway, doing things smarter.

Speaking of the affects of "pooling" on markets, I believe that the same thing has been happening in the housing market: household size is increasing.

hardcleareye's picture

Hmm...  you live on a "farm" and you don't  have a truck,,, you rent one when you have to haul stuff!

What kind of "farmin" do you do and how big is you farm?  Are you one of those all hat and no cattle kinda farmer?

CrazyCooter's picture

Good call.

When I bought my house in Dallas, south east of white rock lake, I bought with this in mind; an older house, well built, working class but near estate properties and close to downtown. I figured in 10 years the suburbs would collapse back into the inner city areas desperate to save on fuel costs. Folks will try to move near "nicer" areas first so I should catch that wind sooner than most.

Still got that place ... as a rent house ... will see how that works out!



Seer's picture

"Fuel costs" aren't only for one's transportation.  There's also home use, which is a bit less elastic.

Vehicle fuel costs might not be as significant when unemployment rises.

I've done a complete reverse, I've moved from an urban environment and commuted by bicycle, to a rural one in which I have a fairly long commute.  My urban home I sold in 2005: it was attractive in that it was smaller (energy efficient) and had a water view.  My rural home is only slightly bigger (also pretty energy efficient- esp with good southern exposure [passive solar]), and my view is now of chickens (and other stuff) in my front yard :-)

I'm thinking that as things get worse employment will decline.  Also thinking that folks out in the country tend to (if they're willing to face hard, physical work) manage big economic downturns better than those in urban settings.

CrazyCooter's picture

I agree 100%. I am too young to have enough capital to take my "know whats coming" and park it some where safe, so my challenge was to get a place I can ride it out working with the best odds of a good outcome.

Oh, and I totally want a chicken coop. Can't happen here (I have landlords - rent a basement), but chickens are the first thing I do when I get a piece of dirt all my own.



jmoney's picture

Two thoughts: I really don't think sept was any less traumatic from a consumer confidence standpoint than august. It is impressive that the industry can sell this many cars given all the negative headlines.

Gm and ford are printing cash at these levels. Stocks are dirt cheap on an ev/ebitda. Look for blowout quarters and solid guidance since incentives have been low, demand about as expected, and commodity costs lower........

Maos Dog's picture

Excatly what I was thinking adr, hom much "rubber is hitting the road" and how much is just channel stuffing? How much leverage does GM have over the local dealers to force them to buy cars that just sit on the lots? I would bet that 90% of those 400 volts "sold" last quarter are decorating lots somewhere.

Also, the local Ford dealers outside the great swamp here ALL have little signs with American flags on them saying "bailout free" or some such saying. The local dealers are continuing the anti-bailout advertising even if it stopped at the national level.

adr's picture

The numbrs reported are autos sold to dealerships. Go drive by a GM dealer, the lots are overflowing with cars and every weekend paper is filled with GM ads offering insane incentives and $99 leases on $20k cars. Is that the sign of a healthy market?

When I bought my car the best interest rate youcould get was 6.5% and I had to wait three weeks to get my car. Right now I can pick from five of the exact same car six years later on any dealer's lot. Sucks for me since a year and a half later I could have got 0% financing and $1500 cash on the hood.

The incentives are even crazier now. GM is selling cars by the truckload tosubprime people on welfare, "Obama gonna buy me a car". Truck sales? Well if you can justify a truck as a capital expense you can write off 100% of the cost. If you can why wouldn't you buy a truck for your business.

Just like every other data point auto sales  are just a government stimulus distorted figure. You can't trust any reported number as having any bearing on our true free market system.

kaiserhoff's picture

I was wondering why every damned illegal I see is driving a new car or truck.

Gotta hit those sales quotas, baby.

Quentin Daniels's picture

You can't trust any reported number as having any bearing on our true free market system.

That would be because it has been a great many years since there was last a free market for the numbers to report on.

atomicwasted's picture

GM blew goats even before it was nationalized.

PulauHantu29's picture

Only Wall Street Execs buy a new car every year.....and yacht.....and Cessna.


knukles's picture

Ford yanked the add out of Kindness I'd Suppose.

AGuy's picture

It was pulled because the WH called Ford and told them to pull it.

Seer's picture

I suspect that it might be incest related.  Mulally's probably on the board of the others, might not have known about the ad/campaign when it rolled out the door.

Almost Solvent's picture

Don't forget VW/Audi


VW USA has had a steller YTD - I like their TDI platforms and wish the cost of diesel was closer to regular unleaded (it's almost a quarter a gallon more)

GubbermintWorker's picture

Who cares if the cost of diesel is 5 to 10% more when the mileage you get from a TDI is almost  twice as good as the average gasoline powered car?


Love our Jetta TDI...gets 45 to 50mpg on the highway and a cruising range of 600 miles!

AGuy's picture

Except when something breaks and the repair bill costs a small fortune. VW sell vehicles at a discount and make up the loss with repair costs. Plus Jetta is essentially a womens car. VW markets largely to Women and 8 out of 10 Jetta's are driven by Women.





Freddie's picture

VAG has been growing.  I am not that crazy about Audis but they are selling. BMW, Audi, VW, Mercedes and even Ford of Germany have great diesel thechnology as does Pug/Cit and Fiat.  I think Audis are overpriced and not as reliable or have the build quality of a BMW.  What is interesting is VW supposedly has a stretched Passat for the US market that will be built in Chattanooga, TN.  Supposedly they have the price down to $20,000, which will really pressure Toyo, Honda, Hyundai and Ford. 

I think Toyo and Honda had great quality but everybody caught up including Ford and Hyundai.  Hyundai's 4 cyclinder engine gets the best gas mileage by about 10%. It is insane.

Toyo and Honda's stuff is not cheap at all.  The dealers could sell every vehicle that got but not anymore. The Toyo quality thing was an Obam/UAWW shakedown.  Toyo shut down Nummi in CA - only union operation.  O/UAW attacked Toyo trying to scare the transplants into letting UAW in th plants.  The Germans were smart to go to AL, SC and TN.  The Civil War Part 2 will be fought if the UAW tries to unionize in those states especially SC.

atomicwasted's picture

Honda has great quality for 100K miles.  Then it's a heap of parts in your driveway unless you spend big $ to fix that shit up.

Financial_Guardian_Angel's picture

I've had two Hondas in a row, a '98 Civic and a '04 Pilot. Combined, I have driven these cars over 300K miles and the only repair between both cars was an alternator on the Civic--a $250 repair.

I bought the Civic with 40K for $5900 and sold it at 150K for $3500. I could have sold it for more, seeing I had 60 calls on an ad that ran for 1 week.

I'll keep buying Hondas as long as this epic run continues.

spartan117's picture

I will never buy another Honda.  New or used.

StormShadow's picture

Speaking of German automakers, I had an interesting chance meting with the CEO of Porsche NA a couple weeks back.  He said that while '09 and '10 were slower (mostly due to buyers' image concerns), 2011 has been a great year for them and he expects 2012 to be the best year ever in the history of the company!  And he said it with a straight face.  I'm inclined to believe him, too.  I postulate that the clientele who buy Porsches aren't nearly as affected by all this as the average consumer.  As they say, the rich get richer, esp in times like this.

I live in an affluent area and have noticed a lot of new Ferraris, Astons, and Lambos driving around over the last year.  Makes sense I guess.  However, when SHTF I wouldn't want to be driving around in one.  Angry mobs would likely not treat the drivers well IMO.

AGuy's picture

Not to mention getting them services if Europe goes to hell with long strikes and factory shutdowns. If something breaks and parts can't be obtained, those cars suddenly become expensive lawn ornaments. Best Option is to downsize, with something cheap so if the global supply chain go kuput your not SOL. Plus if your driving a POS, the natives won't neccessary attack you or pelt you with rocks as you drive by.