Skip to comments.Next victim of mortgage mess: Auto sales
Posted on 08/22/2007 5:10:05 AM PDT by Hydroshock
NEW YORK (CNNMoney.com) -- Already-battered U.S. auto sales could be the next victim of the problems with mortgages, declining home and stock prices as potential car buyers delay purchases due to uncertainty.
Industrywide U.S. auto sales in August could be off 10 percent from a year ago, according to an early read from sales tracker Edmunds.com. That follows July sales that were 19 percent below year-earlier levels.
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Jesse Toprak, executive director of industry analysis for Edmunds.com, said that the downturn in home values and credit issues that were seen in the July numbers could be an even bigger factor this month.
"I think the issue is becoming more pronounced," he said.
Sales weren't just weak at domestic automakers, such as General Motors (Charts, Fortune 500), Ford Motor (Charts, Fortune 500) and Chrysler Group. Year-over-year sales fell in July at Toyota Motor (Charts) and Honda Motor (Charts) as well. Many forecasters are cutting full-year auto sales targets in the face of these weak summer sales. And some experts say the turmoil in housing could throw even more dirt in the gears.
(Excerpt) Read more at money.cnn.com ...
It’s time for Paulson and W to come out once again and tell us that subprime is contained.
You an I disagree on many things,but we both know that this will affect every part of the economy. If Joe Lunchbucket does not think his house is secure he is not going out to spend on stuff he does nto have to.
The media elites are going to keep yapping and drive consumer confidence down and the next chapter is recession.....
” The media elites are going to keep yapping and drive consumer confidence down “
That’s right — there’s nothing wrong here..
Money will keep falling from the sky (or from the Fed - same thing) forever....
However, that is not the case today. Since most of the easy jobs has gone to franchises (i.e. oil changes to Jiffy Lube and tires to NTW), an auto mechanic today really needs to know his (or her) stuff. It is now a highly skilled position that requires some degree of computer literacy as well as mechanical know-how.
Therefore, a good mechanic often commands salaries that are equivalent to a professional position and is a very good career option for those inclined. Especially since it appears that people are hanging on to their older cars for more years.
Good thing the video market isn't effected...
PULEEZE! I never said there was nothing wrong. There clearly are problems in the financial world, but not nearly what is being portrayed in the media. When when a financial institution loans 110% of the value of a property with little or no money down to a deadbeat who has nothing to loose you are going to have problems. That is a fact and that is what bankruptcy is for. If you mismanage your assets, particularly those financed by others, you forfeit. As my grandmother used to day "you play in the creek and your feet get wet." It's really not complicated and there are provisions in the system to take care of it. No bailouts, no way. Get it?
” No bailouts, no way. Get it? “
Of course I ‘get it’... From the “it’s all the media’s fault” tone of your initial post, I didn’t have the impression that you do....
I stand corrected....
The counter-media-hype ( ‘nothing to see here’) is just as, if not more, destructive to clear thinking as the ‘sky is falling’ side.
There are, indeed, serious structural cracks starting to show, and the obfuscation from either side isn’t conducive to adressing the problems.....
Yup, I have no intention of buying a new vehicle. I plan on driving my truck until the engine falls out.
The Fed Chairman started it, though....
A mechanic can field test (drive) a vehicle and all the information from that vehicle shows up right here on my monitor.
You are absolutely correct....I have done years of grimy mechanics but its not like that any more. There are still “wrench turners” that switch out parts in the garage....they make an honorable living doing that. Still, its not shadetree mechanics anymore.
If I assume that 50% of the 300M Americans are of legal driving age, then that leaves a potential of 150M customers. Assume the average life of cars/trucks to be 7.5 years, then there is a natural need of nearly 21M cars/trucks per year. Yet the current annual market is significantly less than that at $16.4ish million.
I don’t see the auto market declining with any signifigance. In the industry, we hear this claim every year and then we hear those forecasters sound shocked when there is slight year over year growth.
I agree completely with you. I have a couple of friends that are mechanics and they make a great living. They work hard and earn every penny of it too!
We need Inigo Montoya to pop up in the background at one of these news conferences:
“You keep using that word. I do not think it means what you think it means.”
Bernanke seems to have stopped saying that. He seems to be slowly acknowledging reality.
Sorry you took my initial post that way, but that wasn't what I meant. The media circus didn't cause the subprime mess, but they certainly can fuel fear by constantly running doom and gloom pieces, sorta like blowing on coals to stoke up a fire. I saw it happen in the '70's, i.e., the "misery index", "stagflation", etc., and again preceding every recession since, particularly when the 'Pubbies occupy the Whitehouse. Folks that are paying attention, like you and me, know better, but the casual observer is who they are aiming at. I, for one, am convinced that the Dims, with the help of their laimstream media buddies, would drive this country into depression if it meant it would hurt GWB and bring victory to the Socialist Democrats. I believe they are that obsessed with his downfall.
There will always be some impending crisis in the financial world. There will always be people offering bad loans and people lining up to screw themselves. You have the right to be an idiot in this country, but you do not have the right to use my tax dollars to fix your screwup. (yet)
Young men out here in the rural areas keep asking me if it is worth getting an engineering degree, because a) it is useful and b) engineering pays well.
I tell them that engineering does pay well, but you’d better not step off the treadmill of learning the “latest thing” or otherwise your job will be outsourced in a hot second over to India.
Then I tell them that if they get into something like diesel repair... oh, can they make some nice money. Good diesel mechanics are pulling down some serious money, have good job security (because the engines are right here, and they need to be repaired right here, so they can get going right now) and it certainly isn’t boring: engine techs have to have quite a bit of training now, and it takes brains as well as attention to detail to make it as a diesel tech.
You oughta see what diesel techs make at some of these gold mines around here. And well equipped shops? Farmers dream of having a shop 1/10th as nice.
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