Posted on 10/30/2019 10:03:12 AM PDT by Vigilanteman
Key Points
•Auto sales have crashed, the unsold inventory and delinquent debt may worsen well into 2020.
•This auto-led downturn may be less damaging to the global economy than the housing bust was 10 years ago, but automobile manufacturing still accounts for a sizable amount of production, debt, and jobs.
In 2009, the world economy was starting to climb out of a housing-led downturn. Ten years later, a downturn in auto production following tumbling car sales is driving a bust in manufacturing and threatening a recession for the global economy. This auto-led downturn may be significantly less damaging to the overall economy than the housing bust, but is no minor threat considering the amount of production, debt, trade, commodities, and even jobs tied to the making of automobiles. The auto inventory and debt hangover may last well into 2020.
Manufacturing-led downturn
Manufacturing output has slowed sharply around the world, slowing overall economic growth. This can best be seen in the resulting drawdown of excess inventories acting as a drag on economic growth.
(Excerpt) Read more at schwab.com ...
In general, fairly well balanced and informative.
By hook or by crook, the left will get that economic turn-down in 2020 to take out Trump.
Maybe if they drop the price to something more reasonable, things will work out fine.
I’d buy a loaded new Camry for $21k.
I’ve wondered what would happen if the market were to get saturated. I always assumed it could never happen, but maybe it can. I think it’s also possible that the prices have just gotten so high that people simply can’t justify the price. And I’ve heard that people are getting 7+ year auto loans. That also shouts that the zenith of auto sales may be behind us for some time.
I’m dumbfounded by how much pickups cost these days. And they are simply too big for most peoples’ needs. They need to bring back those 80’s mini trucks.
Doubtful.
Even if I could afford a new car I would still fix my current vehicle.
I’m about to rebuild the engine. Timing belt, water pump, head gasket. Total parts like $120. Not bad for a new engine.
VW warns that there's been a slowdown, yet while sedan sales have stalled, SUV and truck sales appear to be using nitro. Just continuing the wordplay.
Try finding a good, quality sedan without a turbocharger for under 25k.
The hard truth is that the automakers have made new cars too expensive. Even adjusting for inflation, the average price of a new car today is twice that of a car in the 1970s and 1980s. The used car market is now very competitive, and people are holding onto their vehicles for much longer. Less people want new cars, and their high price tags.
Definitely if you’re setup for it and know what you’re doing :)
A turbo charger is a deal breaker for me anyway. I put a lot of miles on cars and it’s all about reliability.
I bought a 2013 Scion FR-S for my commute in 2013. It now has 180k miles on it and is going strong. My 2006 Scion xB 5 speed manual has 220k miles on it. I’m putting in a new radiator ($38). Other than that, it STILL drives like a new car, though It could use new shocks. Smooth like puddin’.
The former cost $25k and the latter cost $17k new. I also own a 2017 Scion xA and a 2004 Chevy Silverado Z71. That last one is an utter piece of crap. The only thing that HASN’T broken on that car is the drive train. But at 112k miles it should just be getting broken in...
And drop financing rates to 0-1% where they should be.
Very very smart of you to do that.
The skill set that it takes to pull this off is sadly disappearing.
I miss the Chevy LUV. Learned manual transmission on it.
The auto industry only represents 3-5% of the GDP. What it does mean is if you need a car, it about time to buy. Used cars will be pushed lower as well.
And drop financing rates to 0-1% where they should be.
Of course, it’s really a Mazda II with a bass mouth.
That’s why I bother to keep my crappy 2004 Silverado 4x4 running. I still can do most of the work myself, and with the terrible gas mileage, I’ve only put six thousand miles on it in the 7 years I’ve owned it. I either use it on the property or to take me to Lowes for lumber. That’s it. Sometimes I drive it to church to keep the seals alive.
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