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Automobile sales for June are coming in above expectations (Ford, GM, Toyota, Chrysler) and are...

Automobile sales for June are coming in above expectations (Ford, GM, Toyota, Chrysler) and are strong enough that analysts are comfortably raising their annual industry-wide sales forecast to over 14M vehicles. For comparison, last year the industry turned over 12.8M vehicles and in the midst of financial chaos in 2009 only 10.4M cars were sold. Despite the solid numbers, economists are wary that sales could be related to a demand shock from an aging U.S. consumer fleet, instead of any general improvement in consumer confidence.
Comments (16)
  • "Despite the solid numbers, economists are wary that sales could be related to a demand shock from an aging U.S. consumer fleet, instead of any general improvement in consumer confidence."


    Who the hell cares what the buyer's supposed motivation was?? Does that make the transaction any less valuable? The fact is that people had enough money/desire to purchase a new car and banks were able to lend to them in order to do so.
    3 Jul 2012, 12:05 PM Reply Like
  • There's always a reason to worry for worriers.
    3 Jul 2012, 12:06 PM Reply Like
  • Not necessarily. In an auto market with a stretched buyer and rising manufacturer incentives you have lower margins for the dealer and the maker. If you're using auto sales as a sign of consumer confidence you may be misled as the buyer has to come into the market to replace a necessity. These buying signs may not translate elsewhere...
    3 Jul 2012, 04:53 PM Reply Like
  • Are they sure it's because Americans aren't stupid and they see the writing on the wall with $5/gal gas prices in coming years? I would be dumping any old gas guzzler right now and trying to find the most fuel-efficient vehicle I can, too.


    Since when were vehicle sales the holy grail indicator of economic health?
    3 Jul 2012, 12:17 PM Reply Like
  • Because the business cycle in largely about fluctuations in durable goods production and construction.


    In other durables goods collapse, you have severe recession and if durable goods are growing strongly, no recession.


    3 Jul 2012, 04:13 PM Reply Like
  • It is a good number, however it is not a leading indicator. 2007 was a pretty good year for car sales compared to 2008 with a sales peak in December 07. Jan 2008 wasn't too shabby either. February 2012 looks to be higher than this month's numbers.


    For those anticipating a recession, it doesn't change that expectation and for those that aren't well it doesn't change that perception either.

    "For the full year of 2008, all of the Big Six automakers reported sales declines. In total, the industry sold 13.2 million vehicles for an 18 percent drop from 2007's 16.1 million."


    Great chart from Calculated Risk on SAAR:

    3 Jul 2012, 12:40 PM Reply Like
  • Auto sales in 2007 were the lowest in a decade at the time, so yes, the presaged negative events. This is completely different from today's behavior.
    3 Jul 2012, 12:50 PM Reply Like
  • You got it Tack. I had purchased a 2007 Toyota and did not put many miles on it. Toyota said they wanted the car and would pay me what I paid for the car. I knew they were not selling many in 2007.
    So I bought another new one (2012) that I didn't really need, but just could not turn down that sweet of a deal.
    3 Jul 2012, 01:20 PM Reply Like
  • It should change expectations. If it is doesn't, it shows you are just being stubborn.


    Strength in durable goods is inconsistent with an imminent recession, and unlike 2007, there are no foreseeable shocks to drive the economy under. Construction is on the upswing. Housing is improving. The US economy has significantly deleveraged.


    3 Jul 2012, 04:13 PM Reply Like
  • I did a lot of buying the last two months. Best way to reduce risk to buy sharply undervalued assets.
    3 Jul 2012, 04:15 PM Reply Like
  • "The US economy has significantly deleveraged. " - no it has not. Consumer debt to personal income has deleveraged by a small amount from 18% to 15% while public debt to GDP has soared from 60% to 90%. We are worse off than before.
    4 Jul 2012, 01:11 AM Reply Like
  • - a chart to show little or no deleveraging overall by the US consumer, after you factor in their government obligations
    4 Jul 2012, 01:40 AM Reply Like
  • Another indicator that destroys doomers dreams....
    3 Jul 2012, 01:11 PM Reply Like


    Spin this guys ! And when the small pool of buyers using the FED's monster historic low mortgage rates drys up the mid 2013 recession might not be shallow.The fact that the average age of US cars is still close to 12 years should be sending sales way higher then the reduced estimates just beaten !


    A doomer I surly am not,but, at 87 i'm still not blind ! Every important stat is sinking and Obama's Health Care Act will take years to work out the horrific effects.Over the next 4.5 years he will surly keep spending an using Ex Orders to disperse stock holders wealth the 55 million who have no stocks.


    Look at all the capital gains taxes coming boys an girls and your healthcare costs will soar..


    Your all welcome down here in LA.. Pull a Reagan and use your feet ~
    3 Jul 2012, 07:28 PM Reply Like
  • 87 eh? How's that social security and medicare working out for you?
    Looks like you've long since drawn your fair share...guess it's time to return the rest of it.
    3 Jul 2012, 11:47 PM Reply Like
  • Edaugh..
    How, I give away more in a year than most will make in there life times. On April 8th I sold my entire portfolio and moved to Latin America ! And,paid to get rid of my US Passport.


    I never filed for Social Security and didn't want it. I did not need it and I think there are millions who should do the same !


    I've also paid tax on millions each year until I retired and was able to make 7 figures in a Roth IRA since I left my firm.Then I set up the scam of all scams. A Foundation ! Just like Warren, Bill, Larry and the rest of the best of breed. You need to use the tools the biggest criminals set up for us ! Congress !


    Thanks for your post ! DL
    4 Jul 2012, 04:49 AM Reply Like
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