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As if anyone who's been semi-conscious for the past six months couldn't see it coming, Bloomberg predicts December's auto sales numbers will close the year on a sour note. Based on their survey of six industry analysts, they estimate deliveries were down by 5.6 percent at GM, 7.8 percent at Ford and 7.9 percent at Chrysler. They expect smaller declines from the transplants. Americans bought an estimated 16.1 million cars and light trucks last year which is the lowest since 1998. Analysts across the board are predicting an even worse year in 2008. We'll see how far off Bloomberg's stats are when the overall sales figures are released tomorrow. Look out for TTAC's wrap-up on 2007 sales via the specific models we've been tracking.
6 Comments on “Bloomberg Offers a Piercing Glimpse into the Blindingly Obvious: December Car Sales Crash...”
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I think it will be worse across the board. There are a lot of folks out there who sold fewer vehicles in November and December combined vs. October.
If gas gets to the $3.50’s, 2008 may end up becoming the leanest year for new car sales since the early 1990’s.
It isn’t just car sales that are suffering; poor home sales are putting the ex in exurbs.
Homeowners like the Kunzes are just the latest victims of the tumbling housing market, which has forced a number of home builders into bankruptcy. In the past year, at least eight home builders have filed for bankruptcy protection, according to the National Association of Home Builders, including Levitt of Fort Lauderdale and regional builders such as New Jersey’s Kara Homes; Elliot Building Group in Pennsylvania; Neumann Homes in Illinois; and Turner-Dunn Homes in Arizona.
http://realestate.msn.com/Buying/Article2.aspx?cp-documentid=5875241&ref=patrick.net
That’s hardly a “crash”. Each of the domestics has seen much worse months various months of 2007 than predicted in the article.
Nothing would surprise me either way when the numbers come out, but IF as indicated in the article the Detroit-3 were to shrink only 5.5 to 8.0 percent for December, then most likely that would mean most of the Asians and Europeans would show modest growth, and on net the month would be down maybe 2.5% — in line with the year. THAT’s not a crash.
Personally I think the industry and analysts are caught up in groupthink and that mostly likely sales in 2008 will grow, not decline. Yes, you read it here first.
With the energy bills we are facing and the rising cost of everything who has money for a brand new car? Or even a 2 year old car that costs what a new one did 4 years ago.
One of my bosses just bought a previously-owned Bimmer (751?). I could probably swing a car purchase, but I’m hesitant about incurring the wrath of the gods of recession.
New cars that are fully loaded — with debt
Gone are the days of the three-year car loan. The length of the average automobile loan hit five years, four months in October, up more than six months from 2002, according to the Federal Reserve. And nearly 45% of loans written today are for longer than six years. Even some staid lenders owned by the carmakers, such as Toyota Financial Services and Ford Credit, are offering seven-year financing. And a few credit unions, particularly in the West, are tinkering with the eight-year note.
At the same time, the amount of money drivers owe on their cars is soaring. In October, the average amount financed hit $30,738, up $3,500 in just a year and nearly 40% in the last decade, according to the Fed. More troubling, today’s average car owner owes $4,221 more than the vehicle is worth at the time it’s sold — up from $3,529 in 2002, according to industry analyst Edmunds.
The longer loans are directly related to the higher balances. By extending the length of loans, lenders keep monthly payments down. But because these loans take longer to pay off, a much larger piece of the principal remains unpaid at the time the car is traded in.
http://www.latimes.com/business/la-fi-autoloans30dec30,0,4058852,full.story?coll=la-home-center