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 ...
don’t blame you- We owned a few old cars i wish we still had today- old T-Bird, old Caddy, (What a boat that car was lol- but comfortable as all get out) older ford rangers- We still have a 47 power wagon- but it’s getting long in the tooth- still runs though- but it’s a work truck only now- course we had old VW bugs too- fun little cars- old volvos- old chevys- etc- too many to list-
always wanted a GTO- Had a chance to buy a road runner in high school- good thing i lost out on it- i wouldn’t be here today very likely if i had bought it-
couple of highschool buddies had some great old classic muscle cars- hope they hung on to them as they are probably worth a fortune today-
When I bought my low end Honda from them, I actually checked around. I could only save about $80 by going to a distant dealership. That would barely cover my trip there and back.
True, but interesting that you picked the Toyota Camry as an example. I believe it is the best selling car model in America.
Have you ever watched Scotty Kilmer youtube videos? If not, I recommend it. He confirms what I finally realized about two years ago: Until something changes, all of my future cars will be Toyotas.
it could be better if it came with a 6 speed manual ... i would have bought one over my 6 speed Honda Accord.
We got both the SUV and the house paid off this year!
What’ll we do with all the money?!?!
Chevy truck instrument panels go bad.
One had have them fixed for aroiund $200 or doit yourselve for around $30.
One word: Rat Rod
Our old 99 Grand Cherokkee died at over 200,000k on it.
Had the motor rebuilt at 103,000. Wife wanted to trade but I convinced her the cost of engine repair would be about the same as 4 months of car payments.
We downsized and got a 2011 Compass. It’s now got 163, 000 on it.
The radio has gone south; as the AM/FM section manages to disconnect and reconnect when it wants to.
The disk and aux works just fine.
I retired from electronics repair and thought, “I can fix this!”
Popped the thing open and all I saw inside were some (a LOT!) of tiny little squares soldered (somehow) on these incredibly tiny pads. I saw NOTHING in there that even resemble radio parts as I once knew them.
I now run a portable radio into the AUX jack if I wanna listen to Rush.
It came down to the fact that the local Honda dealer was comfortable with me taking the car out for an entire afternoon to do our normal Saturday errands.
The Toyota dealer would not allow more than a test drive with the sales guy in the car.
I could understand that level of distrust in a big city, but it was only 1/4 mile down the same road as the Honda dealer and on the side toward the more rural part of the pleasant Pittsburgh suburb where I live at that.
Well, I have a 2016 Honda Accord with 6-speed manual. it only comes in the lowest trim level ‘LE’ which is fine with me. I do not want all the nonsense gadgets and socalled “safety” crap they put in cars now.
But in the 50k miles I have on it so far it has had: seized caliper (replaced under warranty), a blown coolant line to the thermostat housing (car overheated for a moment till I pulled it over) fixed at my expense; an almost rusted through thermostat housing that I had replaced at my expense; and now I think I might have front right wheel bearing starting to get worn.
My wife has a Rav4 with over 55K and not a problem.
My 1999 Grand Marquis (185+ K) is a damn better car then my Accord.
I’ll take a Camry over an Accord any time if it had a manual.
One word: Rat Rod
I did it myself for free with a low power soldering iron.:)
Ck out the https://www.facebook.com/ClearLidz/
“Dang, you’re a strapping lad. Hope you never went combat arms. “
Lost my student deferment in ‘63. Enlisted, closed out everything, headed out to induction office. Doc told me I was to tall to enlist, to tall to be drafted. Shoes won’t fit, first one to hit, only asset was fording rivers I would keep all the fags dry.....one ‘Y”
All that changed a few years later
I wish I had your skill. And tools.
Would you believe a small 3-bedroom house in Denver can now go for $425,000? It is stunning the cost of housing in Denver. Even apartments are going for over $2,000/month.
Cars are lasting much longer these days. I’ve had my Nissan Murano for six years now and it still looks (and runs) like brand new. It has over 120,000 miles as well.
They raised the average prices of cars in the past 5 years faster than people could absorb or beyond what people wanted to pay. 18 grand for a Hyundai accent subcompact without a lot of frills...! Some carmakers’ base model prices(no power windows or premium stuff) aren’t so bad but you can’t get them from the local dealers because they don’t want to go thru the hassle of having to order them from the manufacturers that way. They sell the cars with premium puff up the profits gizmo’s and insist that is the only way you can get them. Thus customers are saying.....Nope.
Also the High price/spread the payments out 10 years type deals going on hurts. People can’t get lower prices but some like families and people in small construction or other businesses still need a car. The used premium car businesses aren’t that much help in that the model prices stay very high up to 5 years from their manufacture. So they have these 7 to 10 year payment plans which lock people in so that the market falls off for new cars because people are locked into a payment cycle when they bought during the bubble.
Average people can’t pay 25 or 30 thousand for even a basic trim SUV...they could pay about 14k to 20k on average. The dealers’ base trim prices have risen 7 to 12k beyond the prices that would cause even a single person making about 40 to 60 k to balk at taking on such a monthly payment.
There are deals to made if someone can drive clunkers until they have saved enough to buy outright but many are stuck in the “can’t afford a car but need one just to get to my job” racket double bind. Used clunkers just aren’t plentiful and are more expensive to get and keep running; one is stuck considering a new car or leasing just for the protections the warrantees afford.(One pays the higher price but major car repairs which would cost mucho bucks are one thing one doesn’t have to worry about).
Yeah and they use smaller engines to boot with the turbo charger not even kicking in unless the engine revs beyond 4k so you have a premium priced vehicle with a smaller engine with a turbo that does nothing for you most of the time. That’s why I went with a Tuscon with the 2.4 liter vs the 1.6 liter turbo charged. The gas mileage was better and power smoother and the price was 5000 less with similar trim. The 1.6 liter is what is in Huyndai’s aAccents! So most of the time you are overworking a dinky engine to shove a bigger SUV body around with the Turbo only kicking in on passing or hill climbs.
The 2.4 can give good torgue when one engages it’s hybrid manual shift mode....it’s rather shocking what that engine and 6 speed hybrid manual can do during a ramp entrance to the highway.
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