Friday, August 01, 2008

Auto Sales Plunge

Edit: Auto Sales are at a meager 12.5M annualized rate! Normally, you would expect the drop to be from the 16.4 to 16.8million autos down to say 14 Million. This is BEFORE almost everyone exited the Lease market.

Any predictions for next month? How about September (by then there will be little auto leasing occurring)? The average American has been taking on loan terms for more than the new vehicles value (due to being 'underwater' on their trade ins). Now with fast depreciation and the sell off of the auto companies' own finance arms... I'm thinking we'll see a very unusual credit contraction for auto purchases too.

One of many links (CNN)

The traditional Big Three Detroit automakers saw their share of sales in their home market plunge to a record low of 43%, well behind the 49% share of Asian brands. But even the Asian automakers had trouble providing U.S. consumers with the fuel efficient vehicles there were looking for, as most of those overseas brands also saw sales drop from year-earlier levels.

A traditionally strong sales month... sucked.

Why didn't Honda's sales spike? Seriously, their drop was puny but when compared to an expected 13% pop, what's going on?

A few luxury brands, such as Mercedes and BMW, also weathered the storm to post modest gains. But sales fell for makers of low-priced cars, such as Mitsubishi and Hyundai.
I'm shocked. With so many poseurs making up their buying base, I'm surprised how the sub $100k luxury brands are holding up.

Oh, by plunge, look at the YOY numbers and annualized sales rates... Until new product lines can be developed, I expect people to just 'make do' with their current vehicle. The trend seems to be that people want either a vehicle that gets 2X their current vehicles fuel economy or 40+mpg. Why the later? I'm not yet seeing vehicles that get 60mpg (2X my vehicles gas mileage). ;)

Got Diesel? Seriously, I have a friend who is hanging on in Detroit only due to Diesel engine development (Toyota, GM, and possibly other clients). With China and India's freeway network expansion... that will mean less foreign oil for the US. I could only dream that the West Coast cities actually get mass transit NETWORKS!

Got Popcorn?
Neil

7 comments:

Chazu said...

You live in the most car-dependent city in the most car-dependent nation on Earth. LA could very well choke to death under the weight of its own dependence upon automobiles.

bodrie said...

LA is car-dependent because mass transit is so limited. Try getting from home to work without having to walk five miles to get to the bus or train. I know I can't.

Bodrie
FlipThatHouseWebsite.com

wannabuy said...

LA is the most car dependent city and thus is being whacked to the extreme by the jump in gas prices. Its typical for a teen to receive a car as a gift. But 'due to the economy,' now the parents are only making the payments and making their kids pay insurance and gas.

But this isn't just LA. BMW is lowering guidance. Oh wait, it seems like they sell half their US product to LA. ;)

I agree with Blondie, LA mass transit is non-functional. My wife takes mass transit, but there is no functional line (bus or train) for my work. :(

Those lower car sales mean quite a few car salesmen/dealers won't be consuming like they were.

This is another bit of proof, we're in a national recession.

Got Popcorn?
Neil

Rob Dawg said...

LA has one of the best transit systems in the nation with much higher than average transit usage. OYOH LA is dead last with a bullet for roads per capita. Miles driven exactly average. That LA is car centric is a myth that won't die.

wannabuy said...

I've tried to get around LA via Mass transit. Its tough going point to point unless its into/out of downtown or LAX with the flow of the rush hour traffic.

I've done the same in NYC, Boston, and DC; it was far easier and faster in those cities. (Out to the exurbs too.)

Do we lack roads? Yea... But we also lack rail, dedicated busways, bus hubs (a la the 'Port Authority bus terminal' in mid-town NYC), etc.

I cannot confirm miles driven being average, but I did a quick google search and LA drivers spend more time driving than any other city (due to congestion and hours sitting in traffic).

Got Popcorn?
Neil

Rob Dawg said...

cannot confirm miles driven being average, but I did a quick google search and LA drivers spend more time driving than any other city (due to congestion and hours sitting in traffic).

That's not really true either. The Texas Transportation Institute (TTI) calcualtes something they call Roadway Congestion Index (RCI) but that doesn't say what they want it to say so they invented the Travel Time Index. For but one instance of the silliness, transit riders have zero travel time. Pisarski has been modifying his model for years to AVOID my criticisms. The worst was 2004 when the TTI RCI was changed and the formula hidden to conceal the truth. LA is one of the victims of that manipulation. Prior to him was Little timmy Lomax. But not really. The RCI has been replaced by the TTI (Travel Time Index) no
doubt because of all the problems with the RCI. Well look at the results,
LA has an index of 1.77 in 2002. NEARLY THE SAME AS IN 1992. Anybody who
puts that out in public has little credibility. It doesn't even pass the
sniff test.

I can guess. The traffic in the last 10 years got a lot worse but by adding
light rail and subways and more ramp metering and HOV lanes the score was
adjusted far out of proportion to their actual impacts.

Lomax set it up so that he could propose "solutions." His formula says
that rail relieves congestion.

Then there's the APTA connection. They cannot be trusted any longer. Ever
since their reports showed transit buses getting lower passenger mile fuel
efficiency their data has reversed a 19 year trend and suddenly transit
buses have started getting 24% better fuel economy than three years ago.
That's replacing half the fleet with twice as efficient technology. Yeah
right. It's the same with Lomax.

Every year I critique the TTI RCI and every year they "correct" for
my observations by hiding the identified issue. The RCI formula was found
to be flawed and the formula is no longer available. The APTA funding was
found to be suspect and the sources of funding are no longer listed. The
issue of "adding" lane miles was disproven and is no longer calculated. The
baseline unmet demand was exploded as myth and the baseline was sent back to
a theoretical 1982 to avoid the issue.
Gross urban area size is highly correlated with congestion. Rather than
incorporate TTI breaks the study areas into 3 or 4 groups based on size to
mask the phenomena.

Peak capacity (approx 45mph) is already 15mph below the TTIs start of
congestion at 60mph. They just redefine their higher speed lower capacity
number as "free-flow travel speed capacity." Change the wording just enough
that that issue is rendered moot rather than reveal that congestion is not
as bad as they claim with an index.

TTI claims there isn't enough data to calibrate their index to actual
measured congestion. The real reason is because where there is data, they
don't agree.

2004 TTI added; "...travel and roadways that previously existed in
rural areas are added to the urban area statistics. It is important to
recognize that newly constructed roads are only a portion of the “added”
roads." This in response to my pointing out the error of their added roads,
no new roads congestion comparison was bogus.

Yeah, I've been doing this for a while. I've stopped because they no longer do anything useful except pander to their paying clients.

wannabuy said...

can guess. The traffic in the last 10 years got a lot worse but by adding
light rail and subways and more ramp metering and HOV lanes the score was
adjusted far out of proportion to their actual impacts.

Yep. "pander to clients" sounds accurate. Interesting read.


Got Popcorn?
Neil