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Auto-Industry Over-Production Sends US Inventory-To-Sales To Post-2009 Highs

Tyler Durden's picture




 

The 'field-of-dreams' recovery is dismally missing in action. This morning's inventory-to-sales data shows the US total at 1.32x - its highest since the financial crisis and highest in a decade aside from that. The worst sector - or more over-produced or mal-invested - drum roll please... Autos. As the following stunning chart shows, over the last 22 years, the auto-industry has only had a higher inventory-to-sales in the midst of the crisis. If we build it, they might not come... (and aparently they didn't).

Total inventory-to-sales back near ex-crisis highs...

 

led by a total mess in Autos - which aside from the middle of the biggest financial crisis in 100 years, has never been higher...

 

We assume this is great for parking lot sellers and that we will soon see 30-year auto loans to ensure this excess inventory is sold to the lowest common denominator... A Maserati in every garage - remember

 

Charts: Bloomberg

 

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Thu, 03/13/2014 - 10:21 | 4542699 post turtle saver
post turtle saver's picture

good... I cannot wait to screw over the dealers on a new truck at end-of-month / end-of-quarter... that should get the price down to where it should have been to begin with... $30-50k for half ton pickup trucks, getouttaheah...

Thu, 03/13/2014 - 10:37 | 4542762 TruthInSunshine
TruthInSunshine's picture

$89 per month leases with $0 down regardless of credit on no income stated loan docs, bitchez ...

... That ought to move some metal in New Normal 'Murica.

Drive out to your local area mass volume auto dealerships to get some real time intelligence on the dealer lots that have only begun to overflow-eth.

I'll bet a dollar to anyone's ten that it will be MOAR overflow-eth next year, same month (regardless of weather).

Bernanke-nomics for the HISTORICAL FAIL.

Thu, 03/13/2014 - 11:06 | 4542939 TheFourthStooge-ing
TheFourthStooge-ing's picture

Fucken A. Here's your recovery:

$89 per month leases with $0 down regardless of credit on no income stated loan docs, bitchez ...

It has a cheap-ass fucking payment, no money down so no skin in the game, and no credit denied despite a string of defaults longer than a train of tar sand extracts from Alberta. The only thing missing is automatic monthly payments via EBT.

The best opportunity for groath would be to open dealerships at airports. Why go through the hassle of renting a car when you can lease one so cheaply? Just drop it off at the airport (or wherever you want) before you fly home. When you return from your trip, lease one from the airport to drive home. Everyone qualifies. Think how much frequent flyers would save on airport parking.

Thu, 03/13/2014 - 11:40 | 4543088 TruthInSunshine
TruthInSunshine's picture

If the government would just enact the ObamaCar Act, which would consist of having the government borrow trillions more from the Fed in order to allow every American to lease any car they wished from GM, Ford or Chrysler (ie. More direct subsidization of the auto industry) for any period of time (by the day, even) for $1 a day, fuel included - EVEN ALLOWING HOLDERS OF EBT/SNAP Cards to use them to pay the $1 per day, auto sales would ROAR MOAR.

Thu, 03/13/2014 - 13:35 | 4543809 madcows
madcows's picture

naw, just send out the brownshirts to put sugar in every american's gas tank, and Voila, we'd all have to buy new vehicles.  Shazzam. problem fixed.

Thu, 03/13/2014 - 10:26 | 4542701 Dr. Engali
Dr. Engali's picture

It looks like it's time to extend loans out to ten year. Problem solved. Paying $50,000 for an over priced $30,000 car is a good deal right?

Thu, 03/13/2014 - 10:28 | 4542735 yogibear
yogibear's picture

Why not 20 or 30 years? The automakers and the banksters would love having a steadily increasing perpetual auto loans. Where Americans are all debt slaves.

Thu, 03/13/2014 - 10:41 | 4542803 Spastica Rex
Spastica Rex's picture

Take out the loan, default after five years.

Slave problem solved.

Thu, 03/13/2014 - 10:22 | 4542705 DavidC
DavidC's picture

How is this fucking market holding up?!

DavidC

Thu, 03/13/2014 - 10:36 | 4542778 JPM Hater001
JPM Hater001's picture

I know this one

Greed

Thu, 03/13/2014 - 10:46 | 4542831 nightshiftsucks
nightshiftsucks's picture

Manipulation pure and simple,the Feds will not let it collapse.

Thu, 03/13/2014 - 10:55 | 4542876 Cursive
Cursive's picture

@DavidC

Tactically, HFT is the glue at the moment.  Strategically, it's a "seller's strike" because the generals can't find any slaves to offload their shit bucket of equities.

Thu, 03/13/2014 - 10:22 | 4542706 Last of the Mid...
Last of the Middle Class's picture

Mark it as sold as soon as you manufacture it and send it to the dealers. What could possibly go wrong?

Thu, 03/13/2014 - 10:26 | 4542727 yogibear
yogibear's picture

Now that Barry successfully removed the debt limit he can blow money on Cash-For-Clunkers #2.

 

Thu, 03/13/2014 - 10:28 | 4542732 Itchy and Scratchy
Itchy and Scratchy's picture

Car go beep beep!

Thu, 03/13/2014 - 10:29 | 4542739 youngman
youngman's picture

They have 7 year car loans down here in Colombia....at a high interest rate too...

Thu, 03/13/2014 - 10:33 | 4542746 Rainman
Rainman's picture

As usual, the solution is simply to dig much, much deeeeeper down into the subprime rathole.

Thu, 03/13/2014 - 10:32 | 4542753 Savvy
Savvy's picture

In 2003 I bought a F-150 supercrew for $42k (stupid move I know I know) today that same truck is $28k.

Thu, 03/13/2014 - 10:36 | 4542779 madcows
madcows's picture

28k for a used pickup.... and $50k for the new version.  the dealers can keep them until the new ones cost $28k, and the used ones cost half that.

Thu, 03/13/2014 - 11:23 | 4543031 General Decline
General Decline's picture

I've never owned a brand new car I'm proud to say.

Thu, 03/13/2014 - 12:03 | 4543180 Itchy and Scratchy
Itchy and Scratchy's picture

Pride is one of the seven deadly sins!

Thu, 03/13/2014 - 10:38 | 4542768 madcows
madcows's picture

I refuse to spend nearly a year's salary for an asset that depreciates the second I drive it off the lot.  WAY too much money for means of getting to work.  The retarded auto producers keep loading these things up with wifi, phones, talking GPS, autobrake, autopark, backup cameras, etc... and the retarded gadget collectors keep taking out 7 yar loans to buy them.  No thanks, except the government destroyed all the used vehicles, so there's no alternative.  FU OBAMAO, clunkertard.

 

Thu, 03/13/2014 - 10:41 | 4542790 29.5 hours
29.5 hours's picture

 

 

Auto industry over-production is part of the classical model of the business cycle. Keynesian policies would normally "get right on it." What makes the current inventory build-up so dangerous this time is that QE and Keynesianism has pretty much shot its wad. No bullets left in the arsenal except more of the same printing.

Combine a normal cyclical downturn with this phase of the overall monetary/financial problems--and we may have another critical downturn phase in this ongoing mess.

 

 

Thu, 03/13/2014 - 10:44 | 4542824 Itchy and Scratchy
Itchy and Scratchy's picture

Maybe they should fix the pot holes first?

Thu, 03/13/2014 - 10:46 | 4542830 ClowardPiven2016
ClowardPiven2016's picture

how can this be???  don't car buyers know that "Detroit is alive and Al Queda is on the run" and that the economic recovery is real. 

Thu, 03/13/2014 - 13:18 | 4543692 drendebe10
drendebe10's picture

Yea, all you gotta do is ask the arrogant, narcisstic, pathological lying illegal kenyan muslim sociopath in chief. Wutz not to believe from that thing?

Thu, 03/13/2014 - 10:51 | 4542856 bagehot99
bagehot99's picture

Meanwhile, Tesla is worth 80% of GM. 

LOL, the people in this country are being led like lambs to the fucking slaughter. And they don't care, because they can watch the new Beyonce video on their iPhone 9SC, which T Mobile sold to them on credit.

It'd be depressing if it weren't so utterly hilarious.

Thu, 03/13/2014 - 11:50 | 4542868 Itchy and Scratchy
Itchy and Scratchy's picture

Younce has got a new vid???? Like, so totally kewl!

Thu, 03/13/2014 - 10:52 | 4542861 Itchy and Scratchy
Itchy and Scratchy's picture

Much need autos to drive onto the 'bridge to nowhere!'

Thu, 03/13/2014 - 11:02 | 4542913 damicol
damicol's picture

30 year sub sub prime ,     with a 99 % end of loan ballon payment,  ZIRP interest and rolled into a synthetic CDO and sold to the Fed.

Special offer limited only to  17 to 30 year olds with no assets living in a basement and unlimited  access to dope.

Minimum loans start at $100,000 and backed by GS

Free  macdo and a gallon of booze for all takers

roll up roll up

Problem solved and all the malls can stay open late again

Thu, 03/13/2014 - 13:10 | 4543650 Iam_Silverman
Iam_Silverman's picture

"Special offer limited only to  17 to 30 year olds with no assets living in a basement"

Hmmm, if the dealers take BitCoin, I think I know someone who instantly qualifies!

Any guesses as to whom?

Thu, 03/13/2014 - 11:03 | 4542925 Puncher75
Puncher75's picture

And the good news is.......we ain't seen nothing yet compared to what's coming. 

Thu, 03/13/2014 - 11:29 | 4543061 shovelhead
shovelhead's picture

 A rich guy once told me that poor people are the only ones who can 'afford' a new car.

Every year or two he pays a wholesaler a percentage cut to go with him to use his license at dealer auctions to buy a year old or less repo and then retail his existing ride for more than he paid for it.

Cars, boats, motorhomes, bikes and ATV's. He's got em all and in the end they don't cost him a dime as he rotates them out for newer, bigger, better models.

A benefit of having cash in a uber-financed debt world.

Thu, 03/13/2014 - 11:57 | 4543228 wmbz
wmbz's picture

If 20 - 30 year auto loans were availble, sales would soar to the moon! The how-much-a-month crowd would be camping out on car lots to "buy" a new car/truck.

At one time in my life many,many years ago I thought most people had common sense. That is simply not the case, and it is getting much worse.

Roar on sheeple! Debt is freedom...Right?

Thu, 03/13/2014 - 12:31 | 4543437 Itchy and Scratchy
Itchy and Scratchy's picture

Car go honk honk!

Thu, 03/13/2014 - 13:15 | 4543675 drendebe10
drendebe10's picture

Govt Motors makes nothing I want to buy or drive...  same goes for Chrysler....  Since Ford didn't take any govt dole, I drive a Ford truck...

Thu, 03/13/2014 - 18:39 | 4545430 Da...Bears
Da...Bears's picture

Not to worry, they will just "sell their way out," right?  Just today I heard a KIA commercial on the radio that guaranteed approval no matter what the credit score.  Not just for one car, but for two cars!  The actual slogan was, "Why buy one when you could buy TWO!!"

But this time it's different.

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