Jalopnik: The Collapse Might Finally Be Here

[mahatmakanejeeves]

Last edited Wed Oct 2, 2019, 05:41 PM - Edit history (1)

THE MORNING SHIFT
The Collapse Might Finally Be Here

Patrick George
Today 10:00am

September was an absolute disaster for new car sales, more bad news may lay ahead for the car industry as a whole, General Motors’ striking workforce digs in, Tesla’s going to China and more for The Morning Shift of Wednesday, Oct. 2, 2019.

1st Gear: The ‘Oh Shit’ Moment Has Arrived

For the past two years or so, we’ve seen a general flattening or outright decline in new car sales after nearly a decade of unfettered growth. Some segments and brands have fared better than others, of course. In general, this hasn’t been a stellar time to be selling sedans and small cars. But fears of a saturated new car market have always loomed large, compounded by concerns over a larger economic downturn lurking around the corner.

Well, September’s new car sales figures won’t do anything to assuage those fears. Very much the opposite. Things seem bad across the board.

Here’s Bloomberg:

Results were disastrous for leading Asian automakers Toyota Motor Corp. and Honda Motor Co., which both suffered double-digit declines that were worse than analysts anticipated. While a fuller picture will emerge Wednesday when General Motors Co. and Ford Motor Co. are due to report, the poor performance suggests that overall deliveries of cars and light trucks could come in worse than the 12% drop anticipated by analysts, based on six estimates.

The severity of the slide stokes fears that a long-anticipated car sales collapse may be arriving. The slowdown puts auto dealers already struggling with shrinking profit margins in an even more precarious position. With outgoing model-year vehicles clogging their lots, automakers had to pony up record incentives of more than $4,100 a vehicle in the third quarter, according to researchers at J.D. Power and LMC Automotive.

I won’t go into all the details here but there’s a ton more at Automotive News explaining how bad it was, brand by brand. Just read the headlines:

{snip}

Update 1:30 p.m.: Since a lot of people are reading this story, I’ll go ahead and add the newly released numbers from the American automakers.

According to Automotive News, Fiat Chrysler posted a 10 percent year-over-year sales decline, as did GM, while Ford was down a whole 12 percent. So it’s pretty not-great news all around.
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This comment showed up:

ClayHawk > Patrick George
10/02/19 12:52pm

Patrick you should read this article if you have not already -

https://www.wsj.com/articles/the-seven-year-auto-loan-americas-middle-class-cant-afford-their-cars-11569941215

This shows the problem form a different angle as well.

[virgogal]

1. Good for the environment,bad for the economy-----Too many HUGE cars on the road.

[VMA131Marine]

2. Young people in particular

are moving to urban areas with good public transport and not buying cars.

[Wellstone ruled]

3. Fiat Chrysler along with Nissan are in the weakest position

it appears as of now. Looks like they are getting ready to unload most of their inventory and hunker down and hope they don't go bankrupt. Ford should be okay,they have several hundred billion in cash and cash equivalents. GM is totally messed up,jokingly know as China Motors by many of the Iron peddlers.