Posted on 04/20/2020 9:54:28 AM PDT by SunkenCiv
Adam Jonas covers the auto industry for Morgan Stanley. Barron's spoke with Jonas recently about how the car industry can survive the shutdown, and how it might be left changed. His edited comments follow...
We don't think the [car makers] are going to fail the way some did back in 2008 and 2009. But the industry is going to need support. We expect a cash for clunkers program to be much larger in scope and longer in duration than what we saw. In 2008 and 2009, we saw a $3 billion package that stimulated about $14 billion of purchases...
These are numbers more for discussion: a $5,000 coupon to scrap a car subject to a variety of criteria, including U.S. local content percentages, call it 60% U.S. content. So there's an American domestic angle that will of course include Japanese and Korean cars produced in the U.S. There may be some household income limitations and then limitations on the kind of vehicle you can scrap, and then how much you can buy. It might have a $60,000 maximum price limitation. It's going to be designed, we think, to support lower and middle income classes to get bipartisan support.
Also, there will be a fuel economy and a sustainability angle to it. The fuel economy of the car bought, we suspect, will be 50% better than the fuel economy of the car scrapped. By getting rid of those old clunkers, you're getting rid of the least efficient cars on the road, too. And then there's a safety element to it -- some level of minimum driving assistance technology -- so the car you're scrapping versus the car you're buying has a lifesaving element to it, which would get some support...
(Excerpt) Read more at barrons.com ...
Karma has visited the Democrats, unfortunately they were voted in.
On a semi related note I was headed to a grocery store Saturday morning, all business are closed or take out and passed a strip center that the parking lot was PACKED.
I was looking to see what was open, it was a TitleMax and there must have been close to 600-700 cars parked around it.
It completely filled the parking lot.
.
Who buys used cars? Poorer people, students, people just starting out. This became a HUGE tax on the poor because the SUPPLY of used cars they purchase dried up.
One of my current builds is one of these, https://diocars.com/wp-content/uploads/2016/06/diotipo60.png
No cup holders, just fun.
Bad idea. Very bad idea.
At some point, that argument becomes false. If the average "clunker" is ten years old, that means it was made in 2010. Emissions standards were really tough in 2010; I doubt they are much different than today's emissions standards. So a 2020 car is hardly any cleaner than a 2010 car.
That argument worked from 1980 to 2000 because the older fleet of cars was REALLY dirty.
My ‘68 El Camino has a 327 with FOUR Weber carbs, Muncie, and no cup holders. ;-)
Nope, I am not a sheep following the Madison Ave. led crowd.
It’s not freedom if you are not free to make your own choices.
Awww, that’s not fair!
Beautiful!
I almost bought a Caterham 7 kit for £2,500 back when the exchange rate was $1.08 to the Pound.
And I looked at a Lotus Elan for $1,600 in 1968. Alas, I ended up with a $300 ‘59 Beetle.
/bingo
The main junk mail I get now is debt consolidation offers. Lots of 'em. I have a lifetime of good credit behind me (and relatively few years before my working life ends, if I mind my p's and q's), and the strategy when banks get in too deep (as they did around here when that fraudster basically ponzi'ed their asses with loans for fake boats and cars and such) right about the time the McMansion trend in this part of Michigan leveled off and trended down (a couple, both working, builds a grand house on some kind of waterfront, lives there a few years, then gets divorced, or one loses a job) is to write a lot of small loans to people like me. I went to a branch to get a roll of quarters during that period, got pulled into a loan office, and walked out with a home equity loan.
Hey, it'll only run about $40 billion... /s
They should have named it Corollavirus, no one would ever go for a new car stimulus...
My first vehicle was a '65 Econoline van that I bought used for $350 in 1976. It was a real clunker. But it got 100 miles per gallon.
I kid you not.
Oh, hold on there ... you didn't think I was referring to *gasoline* did you? Of course not, silly! I was referring to *oil*. Yup. 1 quart every 25 miles works out to 100 miles per gallon.
Oh that’s nothing, it also has an English Jag IRS.
Not a drag car, corner carving sleeper.
:^D
-—Who buys used cars?——
Actually used car buyers seem to be women.
Carvana is apparently a success where a young, tech savy woman can lounge in bed eating bon bons and buy and finance a car on their phone. If they don’t like it it can be returned in 7 days.
The obsolete company Car Fax has started their own similar business I believe called zoom. Car Fax seems to have aged badly
Both come to your door to pick up the old car and deliver the new one...... all accomplished on the phone.
If the clunker reimbursement can’t be done on the phone, forget a bout it
Ford’s under $5 a share, in case anyone cares. No earnings, Coronashutdown loss on the quarter, dividend is suspended.
Ford’s CEO Says Its Cars Will Be Built to Kill Viruses - Barron’s
https://www.barrons.com/articles/fords-ceo-says-its-cars-will-be-built-to-kill-viruses-51587119401
My ‘65 Chrysler (which I have since sold, but I keep tabs on it) had the base 383 with a 4 barrel Carter. Not much on cornering, but you can move a lot of car real fast on those straightways. The single reservoir master cylinder was always a concern with the undersized 10” drums, though. You certainly picked the right era.
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