In recent years, the auto industry has been able to boost sales by aggressively pushing people into auto loans that they cannot afford. In particular, auto loans made to consumers with subprime credit have been accounting for an increasingly larger percentage of the market. Unfortunately, when you make loans to people that should not be getting them, eventually a lot of those loans are going to start to go bad, and that is precisely what is happening now. Meanwhile, automakers and dealers are starting to panic as sales have begun to fall and used car prices have started to crash. If you work in the auto industry, you might remember how horrible the last recession was, and this new downturn could eventually turn out to be even worse. The following are 12 signs that a day of reckoning has arrived for the U.S. auto industry…
#1 Seven out of the eight largest automakers in the United States fell short of their sales projections in March.
#2 Overall, U.S. auto sales so far in 2017 have been described as a “disaster” despite record spending on consumer incentives by automakers.
#3 Dealer inventories are now at the highest level that we have seen since the last financial crisis. Why this is so troubling is because there are a whole lot of unsold vehicles just sitting there doing nothing, and this is becoming a major financial problem for many dealers.
#4 It now takes an average of 74 days before a dealer is able to sell a new vehicle. This number is also the highest that it has been since the last financial crisis.
#5 Not only is Ford projecting that sales will fall this year, they are also projecting that sales will fall in 2018 as well.
#6 Used vehicle prices are already starting to decline dramatically…
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DelMarVa's Premier Source for News, Opinion, Analysis, and Human Interest Contact Publisher Joe Albero at alberobutzo@wmconnect.com or 410-430-5349
6 comments:
Some cars go through three or more owners in their first year, repossessed for non-payment, then sold again to another unwary and unprepared buyer.
Projections are nothing more than a guess and does not mean diminished sales. If they sold more than last year and made a profit then there is no slump.
You answered question #1. What about answering questions 2,3,4,5,6...
Look and spill over lot on Naylor Mill road. These are unsold cars.
Auto Industry "sky is falling" mentality only hurts them. This day/age folks don't want high priced cars...why? THEY CAN'T afford them so they keep their old car longer....why? No car payment, less on insurance and there are some states (like VA) which charge a personal property tax.
Joe will probably hate this sentence but maybe the auto industry needs to LOSE money to MAKE money later??
Kia and Hyundai seem to be doing ok.
Why are Japanese cars sold here, but NO American made cars are allowed to be sold in Japan?
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