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US Automakers' Worst Nightmare (In 2 Charts)
With the second half of 2015 "grim" for Chinese auto sales, US automakers - who have field-of-dreams-like built inventories to record levels - have turned domestic for growth by extending credit for decades to anyone who can fog a mirror. That was all well and good until we discover this morning that the government's consumer confidence survey shows Americans auto-buying attitude is the lowest since Jan 2013.
1. Inventories are at record (absolute) highs and at recession-signalling ratios to current sales...
2. And that is a problem because the much-hyped and hoped-for future sales to soak all this excess inventory up is not coming soon... As the consumer confidence survey shows the lowest level of "plans to buy an auto" since January 2013...
Probably a good time to hike rates then...
Automakers appear to have two options, offer buy-one-get-one-free to all new
Syrian refugees or cut production dramatically in hopes of easing
inventory excess. Good luck.
Charts: Bloomberg
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Needs more satellite photos of all the excess inventory fields
Just drive by your local dealer's lots...every one I've seen is filled to the brim and overflowing with channel stuffing product.
Don't worry .gov will buy all those cars with freshly printed money!
Around my area they're warehousing them in the parking lots of now-defunct malls and other businesses. An old pitch-and-putt out on Rt 202 and the now-dead Granite Run Mall on Rt 1.
I want to check that out, ND.
What a desecretion of a mini golf course (its memory)...the nerve of some people!
(I have heard that the Granite Run Mall is slated for closure, but I haven't driven by in a while. I'd like to check that out, too. Hopefully someone sends a "Head's Up" to, DeadMalls.com).
Only things left operational at the Granite Run Mall are the "anchor" stores at the ends of each of the 3 "branches" of the mall. Plus the McDonalds that is separate out front in the parking lot with it's own access to Rt. 1. Frankly, it's a creepy scene. It's being torn down to put up high end condos with their own "town center" style shopping area, or so goes the rumor.
(Across the street, the government-mandated Riddle Memorial Hospital is expanding like crazy with new buildings taking up almost the entire campus.)
The old pitch and putt on Rt 202 has been closed for so long I don't remember what it was even called any more. The main building is gone, the mini golf course is gone but you can still kind of make out the pitch-and-putt part of it because of the odd shape of the ground with elevated flat areas and what's left of the bunkers.
One of the last, real drive-in movie theatres in the country was just a few miles up the road on Rt 202 as well. Long gone (except in my memory), it's now a nursery.
Oh yeah....the 202 Drive In.
Remember that one well, wink, wink.......;-)
Can't wait great buying oppertunities are around the corner.. 2015 inventory must make way for 2016. Should be some great deals coming.
I'm holding out for NIRP, and Danish style loans where they pay me to "buy" a car. SSsswwwweeeeeeet!
Then I'll gets me a loaded Caddy and be stylin'-n-profilin", like a ZZtop tune!!!
I be n!&&@ rich bitchez! https://youtu.be/JIrhcOIYfA8
from wiki: On April 1, 2011, Simon Property Group gave the mall back to its lender...
salt of the earth that bunch. gave it back as simple as you please.
"It's being torn down to put up high end condos with their own "town center" style shopping area, or so goes the rumor".
Developers have tried that shit here in central South Carolina twice that I know of in the last 5 years.
Both were complete bankrupt failures. So I am certain they will try it again soon, because this time it's different!
Yup.
I Up Arrowed you because what you say is true of the Big Picture.
BUT, the economies of real estate are local and developers HAVE been getting away with these sorts of plans here in SE PA because this is still a very affluent area.
And it looks like this will continue here.......until it no longer does. This area will continue to be affluent.......until it no longer is.......
stay tuned
Yup spilling over into fields and empty lots around the dealerships. The Chevy lot is so full you would have a hard time getting in and parking lot to buy one.
GM needs to start sponsoring demolition derbies.
There really is no need. High inventories would be bad only if we were still allowed to use the "R" word. Thank goodness we banned its use after 2008.
GM needs to go BK like it should have back in 2009. All our idiot, war criminal government has done is expand the pain.
GA,
Same in my area, stopped in a local Ford dealer to see when would get first 350/350R and could hardly drive down the isles so many new cars. Used lot jammed with new product too. Scary.
This time, when I buy 5000 shares of Ford for $1.25 per share, I'll definitely hold it long term.
@Iconoc
The real winners will be whoever can convert current production into armored vehicles for the inevitable apocolyptic future.
Just spent about $3k on repairs to a 15 year old car. #winning
I do most maintenance/repairs on my 20yr old Honda. 108K miles.
I gotta drop a grand on my mid-90's Jeep, soon. We're relocating, I don't plan on returning to NY, except maybe for funerals and wakes.
Learn to do basic repairs/maintenance. Find a Jeep user's group and find out if there
is a free factory service manny available to download. I got the service manny
for my Honda online. Also have Chilton's. Have changed out two CV half shafts so far +
little stuff (hoses, tranny fluid flush, disc brake job, fuel filter change, muffler/mid-pipe change, etc).
Even rebuilt the CV half shafts. Rock Auto has all the parts your car will ever need.
Plus, you get to play w/ a hydraulic jack, jackstands, creepers, chocks, torque wrenches, etc.
Paul Eberhart wants a Dodge 700, but sadly, the budget car/truck that gets awesome MPG is not sold here. Screwed again by what I want in a car by American manufacturers
@Don Pancho
What's wrong with you! Everybody else wants bluetooth, NSA/FBI/LEO trackers and a glaring TV screen of crap staring at them. I'm ready for manual windows and locks and real bumpers that don't have to be repaired after a 3 MPH nudge.
Very bullish, indeed!
Looks like " Liftoff! "
This can be fixed easy by a no money down 15 year car mortgage.
Car mortgage. Lol. On second thought...
i've been getting ads from wells fargo to refinance my car loan.
I've got a honda with 100k miles on it. It will go another 7 to 10 years easy. Cars nowadays are absurdly over priced.
What yr Honda?
I can do much better than that. 92 Lexus with 284k. I bought the Lexus used at 225k for $2,500, have had no repairs, so I have paid less than a nickle a mile to ride in a luxury car, albeit a 1992 standard of luxury. In comparison, a new car buyer today will spend over a $1 a mile in depreciation expense buying a similar but new luxury car --- only to arrive at the same place and at the same time as I do in my old Lexus.
I've got a 48 Ford F-3, not sure of the mileage since the odometer stopped working back in the 60's. Tried fixing it, but the interior gear chipped a tooth and will not allow a new odometer to function. So speed is registered by the sound of the engine (not that speed is any thing to worry about).
Sounds awesome on the road, kinda like a locomotive.
Is it an LS400? The LS400 was probably the best car ever built in terms of reliaibility.
My good buddy has 99 super duty with the 7.3.
678,000 miles, that's right 678k, and has never touched the engine other than filter and lubricant changes. Only one transmission re-build. Works it like a dog too. All about maintenance.
New way to improve investment skills
http://www.decisiveinvesting.com/blog/emotional-control/new-way-to-become-a-confident-investor-or-trader
Well, the TPP will fix it. You'll see.
/s
2002 F150 ... 225,000 miles ... original owner and runs like new. Total unexpected repairs over almost 14 years = $1300. Hopefully will get 400k miles out of it.
With any luck I will never waste money on a new vehicle in the USA again, but I will need a another car in whatever south american country I escape to.
how often do you change oil?
I'm at 236,000 on my 93 Chev work truck six stick. Let's check in with each other around 400,000.
A friend of mine just bought a brand new GMC Sierra with all the options for $55k Canadian. He paid cash so he would not be paying outrageous interest on the purchase. He got $3k on a trade in on his seven year old GMC Sierra with a blown engine. I suspect that he will buy another new one for cash in seven years from now. Frankly, I don'y know anyone that can afford to buy new on credit.
The BIG Three are flying towards Chapter 11 faster than you can say interest rates.
They will never go into Chapter 11 because .gov will not allow it. We have already seen this play out once.
Twice.
https://en.wikipedia.org/wiki/History_of_Chrysler#1980s
Twice.
https://en.wikipedia.org/wiki/History_of_Chrysler#1980s
The MSM made Iacocca out to be a hero/genius.
Sounds like its time to extend credit to illegals in the name of "fairness" - Chuey needs a new Escalade, Si Se Puede!
Hey C'mon now... Let's not speak (too) ill of the Dead-Kennedy's...
I ran a 1984 Ford E-250 for 1 million miles; I allocated $1000 a year in expenses, but rarely met that. Kept it for 15 years. Now have a 2002 Honda that I've had for 9 years; new tires,basic maintenance. My total costs so far are less than $2600. Average cost per year should be the standard metric for anyone with a car, but never, ever, ever buy a new one.
That's what I'm talking about. Buy a good quality used car/truck and drive it 'til the wheels fall off...then put some new wheels on it, rinse and repeat. People who think it's hard to stay debt free don't know this secret.
Was that the 300 CID in-line 6...? Fuckers would run forever. Slurpers though...
People aren't buying cars because of the weather. It's just too, weathery.
LMAO. Thanks.
The 1996 Volvo is doing just fine. My operating cost per mile over the last 5 years since I bought it, including repairs, is minuscule. It allows me to travel and do a lot of other things with the cash saved.
ANd to think a US auto maker just caved in during labor negotiations and gave back all the concessions they got from the labor unions the last time they collapse. Are there any bondholders in GM and/or ChryslerFiat to screw over again?
Needs a "new" cash for clunkers program. Fixed it!
Either that, or a 'crash for insurance' program. Or they start using the housing financing contracts for 30 year car loans.
Fuck you UAW.
Some of y'all bitchez weren't even born yet the last time I purchased a new car (1993). I did it once, but never again.
bought a car a few years back. had a note on it but the 1.99% interest rate chapped my ass so i paid it off. I only put about 5K miles per year on it so I will probably die before I need another car.
I’ve got a Caravan with over 300,000 silk road miles, even-toed so great hauling capacity. nothing beats a ’95 bactrian with a Holly Double Humper… ;)
Bought two new front rotors .... for my KIA Soul 2011 .... (not needed yet) .... 26 pounds of steel .... shipped to my Post Office physical address by Fed Ex .... $21 each plus $9 shipping = $51 .... Rock Auto ?
For shits and giggles I went to a local Autoland and checked out some 3-5 year old used cars. They tried to get me to sign a 84 month note.
Not even kidding
Best part was when I showed the sales guy the rate was 9.5%. He said "oh no it's 5.5%" I said really, let me show you on my auto-finance calculator.
I countered with a 3 year note at 5% and asked for them to knock 2K off the price. Car had been on the lot fo 71 days.
Needless to say, no deal was made that day. I guess since I do not have subprime credit and am not desparate for a new ride, I am not a good option to buy a newer car.
I plan to kill someone with my auto. Does that count?