Here's Why Automaker Stocks Are Falling (Despite The Media's Exuberance)

How can it be that automaker stock prices are tumbling given that auto sales (if one listens to CNBC) are surging, that (if one listens to the CEOs) everything is awesome for automakers, and (if one listens to Phil LeBeau) there is no bubble in auto credit? The answer is simple... (you just don't want to admit it)

Two words - channel-stuffing!

In fact, as IceFarm Capital's Michael Green details, the credit-fueled over-productiuon has historically been disastrous for the global auto sector...

So once again - a mal-investment boom has pulled forward demand (from who knows where) and signalled entirely incorrect production expectations to executives who can only see 1 quarter ahead and the amount of buybacks they must do in order to maintain their own personal wealth.

Comments

[Seek_Truth]

Last 5 cars I bought cost $3,500 or less- all Hondas, all off of Craigslist..

One got T-Boned after driving it ~60,000 miles over ~2 years- the insurance paid $4,000 to settle.

Before those 5 vehicles, I bought a Ford F-150 with ~30,000 miles at an auto auction, for $7,500, sold 4 years later, with ~80,000 miles, for $7,500.

Paid cash for every one of them.

P. T. Barnum knew what he was talking about.

[fredquimby]

I will posit that "auto stocks" are screwed. Royally screwed. And will be heading to zero very soon....If you have some, get rid ASAP imo.

You may not have heard, but in the last days, TESLA have just released another "over the air" auto-software update to their cars. You can now summon your car out of the garage right to your front door. Also works in reverse, i.e get out in front of your door and it drives off and parks itself and then plugs itself in inside your garage. Musk reckons it will be fully autonomous within 2 years.

This should be headline news everywhere, but lo and behold, not a bleep out of anyone except......RT ! haha here it is

Did you hear that Musk also gave up all of his patents related to electric cars? This means that ANYONE on the planet can now contract or simply make an electric car. Easily. No R&D, no guess work, just build it and sell it. After all, an electric car is a piece of piss to make compared to a petrol burner, if you know how to deal with setting up the batteries etc.

Traditional petrol car makers are so screwed. I guarantee I will have an app on my phone within 2 years that will summon a driverless car to come and pick me up on demand. Electro-self-driving car pools or something similar will be the way forward. Who needs to own a car anymore? The Swiss are already getting used to this through the mobility.ch car sharing scheme, but you still have to book one in advance and then go out and find it. Not for long.....

Taxi drivers, truckers, delivery people (easily 5 million peeps in the US alone?) ....... see ya bitchez!