Despite the hoopla about the strongest first half in history, domestic auto sales have generally been heading south since September 2015.
Bloomberg Econoday comments on Motor Vehicle Sales.
With nearly all the domestic data in, North American-made vehicle sales are coming in at about a 13.0 million annualized rate in June. This would mark a sizable downturn from May’s 13.7 million rate. Foreign names will be posting their results through the afternoon. Vehicle sales had been, June apparently not included, a strong contributor to retail sales.
Domestic Auto Sales
These are high rates, but things have been trending lower since last September.
Mike “Mish” Shedlock
Monetary stimulus is working! Just like in Japan! If only we can convince people to keep interest rates at zero, or negative, for the next 30 years!
Oh, and raise taxes. Nothing sells cars like out of control red tape and too many corrupt government officials.
We need to immediately accept a few million Syrian/Afghan/Iraqi refugees and pre-approve them for 0% financing/125% LTV sub-prime auto loans as soon as they are on their way here.
In all seriousness, this is not as much of a joke as you might think.
You forgot to mention 0% financing on explosives and IED materials for the disgruntled. Welfare checks while US citizens train the illegals to do their jobs, like Disney does.
And the FBI should endlessly harass small business owners while clearing crazies who later commit terrorism acts — extra points if the FBI also prevents media outlets from showing the attorney general having a closed one on one meeting on a private plane with the subject of an ongoing investigation…. you know, ’cause all grandparents like to talk about their grandkids in secret.
Taxpayers aren’t allowed any privacy on their cell phones, but FBI agents will prevent taxpayers from seeing cute little grandkid pictures. Yeah, right
But doesn’t that only profit Japan? Just last year they showed how the radical islamic terrorists preferred Toyota trucks didn’t they?
If new car sales are not so hot, why are prices still so high?
Used car prices are high for the same reason college tuition is high — ultra cheap financing paid for by someone else.
Interesting you mention that. I was talking to a buddy in the business. His take was, most of his low credit score customers go for the top of the line cars. He figured that was because many had no plan of paying the loan anyway, so why not drive the best.
Ally is the new GMAC,,,so, with a hot secondary market for the junky-ist of junk, sales should hold up for a while yet.
Banks are in trouble because neither college loans, nor used car loans can be repaid.
Remember Jack, that student loan debt is “unforgivable” by law now.
Stuki Moi said:
“Remember Jack, that student loan debt is “unforgivable” by law now.”
And because of that, “iiiits uuunfaaair that Sonny Zerobrain who bought the bonds iiiin goooood faaith” should suffer just because no student ever gets a job and makes a buck. So, the gooooovernmeeeent muuuust maaaake hiiiim whoooole. Or the fiinanciiial syyyyystem wiiiil collaaaaaapse.”
….Which, according the illiterate indoctrinati, is supposed to be some sort of bad thing. Like hobgoblins.
I was going to replace my $13 K 04 Civic with a new one. $22K! And it doesn’t even come with a Harry Potter DVD like the self driving Tesla 😉
Jon Sellers said:
Meh, I bought a Civic last year for $18,300 all in. Of course the new ones are supposed to be turbocharged. Not sure that’s worth $4K. Though I spend a lot of time driving down 2 lane roads and passing in my little non-turbo 4 banger can get hairy some times.
Among the many reasons this country is in the shape it is in is the abject economic illiteracy of the vast majority of its voters.
Minimum wage hikes don’t hurt Starbucks
July 24, 2015
Starbucks accused of slashing employee work hours amid cost cuts
Jun 30, 2016
Rufus T Firefly said:
Walk or bicycle and if you really need a car, buy used
Stuki Moi said:
If you really need more car than a bicycle, get a motorbike. Much less of a well oiled financial machine artificially pumping up used prices, in that market than in the car one.
In unconstrained lynchmobocracies, lenders to generally poorly connected minorities, have less of an expectation of being bailed out, when their luxury item loans to the dead parents of deadbeats, turn sour. So, they end up distorting prices less.
Mish I hope you know that auto manufacturers count a vehicle as “sold” as soon as it ships to the new car dealer – regardless of how many months it takes to move it off the dealer’s lot.
More on those games managers play in this article.
“U.S. automakers used a common accounting practice to justify huge run-ups in inventories, but the downside risks offer lessons for all manufacturers.
It’s no secret that in the years leading up to the Great Recession, the Big Three automakers were producing vehicles in excess of market demand, leading to large inventories on dealers’ lots across the country. Now, some researchers say they know why the automakers acted as they did, and they are warning other manufacturers to avoid the same temptation.
By coupling excess production with absorption costing, managers at GM, Ford, and Chrysler were able to boost profits and meet short-term incentives, according to professors at Michigan State University and Maastricht University in the Netherlands. (Their study on the topic was recognized in January for its contribution to management accounting by the American Institute of Certified Public Accountants and other groups.) Ultimately, however, the practice hurt the automakers, in part by driving up advertising and inventory holding costs and possibly causing a decline in brand image, the researchers say…..”
March 1, 2012 | CFO Magazine