David Silver

February Auto Sales Hit Another Pothole

GhostWriter, Yes I do think there is light at the end of the tunnel. The US auto industry is no doubt struggling and they do have years of negative feelings to overcome. For a while, American cars were not on the same level as some European and Asian automakers, but it appears that gap is shrinking. Now GM, Ford, and Chrysler need to build cars that people want to drive, plain and simple. The era of the cash cows of light trucks and SUVs appear to be coming to end with oil prices that are above $100 and gasoline prices that promise to rise even more.

There are all those headwinds in the industry such as higher food and gas and energy prices, and as long as the push continues to be into ethanol nothing will change. The surge in ethanol demand from corn has caused food prices around the world (and other commodities) to skyrocket. I do think that economy will begin to improve but that we are currently stuck in a self fulfilling prophecy. Everyone is scared we are already in a recession so people are spending and causing us to slip towards a recession.

The Company could do everything under the sun to improve its financial standing, but none of it will matter if sales continue in the negative way they have been trending. When sales begin to improve, we will see if the actions have had the desired effect or if the company will again slip back into its old ways.