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The auto industry could take the some of the sharpest blows if the fiscal cliff is as...

The auto industry could take the some of the sharpest blows if the fiscal cliff is as devastating as the most dire forecasts make it out to be. Analysts note a higher tax rate on the rich will do little to curb the purchases of Mercedes-Benz, BMW, and Lexus cars - but even just the scare of a budget deal impasse could decelerate broad auto sales in December. Edmunds Chief Economist Dr. Lacey Plaches puts a number out amid all the conjecture, calling out a 3% dip in auto sales if cliff jumping is the plan.
Comments (4)
  • PatPatterson
    , contributor
    Comments (37) | Send Message
     
    That's insanity! There is no way the so-called fiscal cliff is going to do anything at all to consumer plans in general much less with regard to autosales at a 3% level. Any impact of the 'cliff', which isn't going to happen and, if it does, won't have a negative effect on the economy long term, will take some time to be felt in the consumer pocket and thus impact their actions.
    20 Nov 2012, 01:05 PM Reply Like
  • MgtGuru
    , contributor
    Comments (9) | Send Message
     
    I think not....people are buying vehicles now because their current vehicles are so old they are threatening their ability to get to work...vehicles are no longer a luxury except for all but hardcore city dwellers and those who can afford multiple vehicles for specialized uses. Vehicles have become tools for getting to work, getting the kids to where they need to be (safely), and helping the DIYers "git er done"
    20 Nov 2012, 02:30 PM Reply Like
  • TwistTie
    , contributor
    Comments (2476) | Send Message
     
    I just got an oil change and a tune-up, so my eight year old Grand Marquis will be purring as I drive off the cliff.
    20 Nov 2012, 04:11 PM Reply Like
  • Tdot
    , contributor
    Comments (3721) | Send Message
     
    Automotive sales are tied more closely to consumer sentiment than just about any other economic segment after home sales and vacations / flying.

     

    If enough folks come to believe the Fiscal Cliff is going to harm their economic status (higher taxes, lower entitlements, rising unemployment, chance of becoming unemployed or cut off), then they will certainly hold out another year with the old car(s) rather than going deeper into debt. The banks and credit corporations will follow suit, and deny credit to folks that are statistically more likely to default in a downturn. It has always been that way, and always will be.
    21 Nov 2012, 06:03 AM Reply Like
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