Bursting of Car Bubble

[patb]

Oh No, the Washington Post has finally figured out the trouble
in the car market.

http://www.washingtonpost.com/wp-dyn/content/article/2009/04/02/AR2009040204184.html?hpid=topnews

There was a car bubble,” Steven Rattner, who President Obama recruited to head a Treasury Department group charged with finding solutions to the mountain of problems facing the American auto industry, said in an interview last month. “We had this artificially high sales rate.”

During the boom years of the early and mid-2000s, automakers were selling more than 16 million cars a year in the United States. They are on pace to sell fewer than 10 million this year. General Motors posted a 44.5 percent drop in March compared with the same month a year ago. Ford’s sales tumbled 41.3 percent. Chrysler’s fell 39.3 percent. Toyota’s sales fell 39 percent, and Honda’s dropped 36.3 percent.

One of the key questions the auto task force must answer is figuring out a sustainable number of annual auto sales. Only then can it determine the best way forward for U.S. automakers. “You had a huge number of cars being sold,” Rattner said, “so I don’t think it is prudent to assume the sale levels are going to back to those levels.”

What drove sales so high in the first place?

In short, the same confluence of confidence and easy cash that fueled the housing boom.

…..

“There’s a tremendous correlation between people who work and own automobiles,” Pisarski said. “If you look at where the cars are, that’s where the workers are. If employment doesn’t grow, car ownership doesn’t grow.”

The shaky economy has kept consumers at bay. Nine hundred car dealers closed in 2008. The National Automobile Dealers Association calculates that another 1,200 will shutter this year.

While it lasted, the car bubble effectively masked significant structural problems at GM, Ford and Chrysler, as well as at foreign automakers like Toyota, which ramped up production in the United States in recent years but suddenly found itself burdened with inventory it couldn’t sell. The bursting of the bubble has exposed the precarious nature of the industry and made clear that bankruptcy might be the most feasible option for U.S. carmakers.

In the meantime, new cars nobody wants to buy continue to pile up in Baltimore and at ports around the globe. Last month, when space filled up at one Swedish port, Toyota was forced to lease a cargo ship as a sort of floating parking garage for 2,500 unsold cars.

i do like the idea of floating cargo ships full of cars.

maybe they should discount them until they move out.

idiots.

I’d buy a GM car for 5K

[jpinpb]

Our economy for the past several years was based directly on real estate. Just about everything was connected to the real estate bubble and the loose credit inflated everything associated w/it. They’re still trying to inflate the balloon. The only problem is there’s a hole in the balloon so any air pumped into it quickly escapes.

[jpinpb]

Our economy for the past several years was based directly on real estate. Just about everything was connected to the real estate bubble and the loose credit inflated everything associated w/it. They’re still trying to inflate the balloon. The only problem is there’s a hole in the balloon so any air pumped into it quickly escapes.

[jpinpb]

Our economy for the past several years was based directly on real estate. Just about everything was connected to the real estate bubble and the loose credit inflated everything associated w/it. They’re still trying to inflate the balloon. The only problem is there’s a hole in the balloon so any air pumped into it quickly escapes.

[jpinpb]

Our economy for the past several years was based directly on real estate. Just about everything was connected to the real estate bubble and the loose credit inflated everything associated w/it. They’re still trying to inflate the balloon. The only problem is there’s a hole in the balloon so any air pumped into it quickly escapes.

[jpinpb]

Our economy for the past several years was based directly on real estate. Just about everything was connected to the real estate bubble and the loose credit inflated everything associated w/it. They’re still trying to inflate the balloon. The only problem is there’s a hole in the balloon so any air pumped into it quickly escapes.

[paramount]

Not so fast – it was announced today that GMAC was making auto loans to subprime buyers again. Probably using tax payer money.

Even during tough times there weren’t that many deals anyway.

Personally I’ll drive my current car straight into the ground.

[paramount]

Not so fast – it was announced today that GMAC was making auto loans to subprime buyers again. Probably using tax payer money.

Even during tough times there weren’t that many deals anyway.

Personally I’ll drive my current car straight into the ground.

[paramount]

Not so fast – it was announced today that GMAC was making auto loans to subprime buyers again. Probably using tax payer money.

Even during tough times there weren’t that many deals anyway.

Personally I’ll drive my current car straight into the ground.

[paramount]

Not so fast – it was announced today that GMAC was making auto loans to subprime buyers again. Probably using tax payer money.

Even during tough times there weren’t that many deals anyway.

Personally I’ll drive my current car straight into the ground.

[paramount]

Not so fast – it was announced today that GMAC was making auto loans to subprime buyers again. Probably using tax payer money.

Even during tough times there weren’t that many deals anyway.

Personally I’ll drive my current car straight into the ground.

[Nor-LA-SD-guy]

[quote=patb]i do like the idea of floating cargo ships full of cars.

maybe they should discount them until they move out.

idiots.

I’d buy a GM car for 5K[/quote]

Yea I might go for a 5K new GM or Ford truck,

Really I am still waiting for a viable electric car, unfortunately if will probably be made in China, talk about a squandered opportunity.

[Nor-LA-SD-guy]

[quote=patb]i do like the idea of floating cargo ships full of cars.

maybe they should discount them until they move out.

idiots.

I’d buy a GM car for 5K[/quote]

Yea I might go for a 5K new GM or Ford truck,

Really I am still waiting for a viable electric car, unfortunately if will probably be made in China, talk about a squandered opportunity.

[Nor-LA-SD-guy]

[quote=patb]i do like the idea of floating cargo ships full of cars.

maybe they should discount them until they move out.

idiots.

I’d buy a GM car for 5K[/quote]

Yea I might go for a 5K new GM or Ford truck,

Really I am still waiting for a viable electric car, unfortunately if will probably be made in China, talk about a squandered opportunity.

[Nor-LA-SD-guy]

[quote=patb]i do like the idea of floating cargo ships full of cars.

maybe they should discount them until they move out.

idiots.

I’d buy a GM car for 5K[/quote]

Yea I might go for a 5K new GM or Ford truck,

Really I am still waiting for a viable electric car, unfortunately if will probably be made in China, talk about a squandered opportunity.

[Author]

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