Everyone knew vehicle sales would plunge, we now know by how much.
The BEA reported light vehicle sales of 8.58 million units at a Seasonally Adjusted Annualized Rate.
Unadjusted sales were 707,840 units.
Sales have not been this low for 50 years. On a population-adjusted basis, these numbers are a disaster.
Percent Change From Year Ago
On a unadjusted basis, sales are down 46.6%. That exceeds the Great Recession plunge of 41.35% in February of 2009.
Don’t Expect a Return to Normal This Year
Expect a very slow recovery. Consumers will need to rebuild balance sheets, not buy new cars.
The same applies to home buying given the Massive Drop in Homebuyer Interest
For further discussion, please see Don’t Expect a Return to Normal This Year
Mish
There’s no such thing as price discovery in this keep-the-bubble-inflated-at-all-costs world. They would gladly toss ALL the brand new cars into the ocean before agreeing to adjust prices down to a rational level…(IMO 25-45% off, depending on vehicle category.) At the very least, some Mitt Romney style vulture corporation could agree to buy the shiploads of cars at an extremely severe discount, with the stipulation that they only be sold in Vietnam or Indonesia, or wherever.
Just 1’s and 0’s on a computer…Fed to the rescue. They can buy everything because it costs them nothing. All hail the Fed! Hopefully they will be benevolent…
Airlines: DEAD
Boeng/Airbus: DEAD
Oil: DEAD
Food Service:DEAD
Automobiles:DEAD
Tourism:DEAD
Movie Theaters:DEAD
Tires:Dead
AutoRepair:Dead
Hotels:Dead
Home Sales :Dead
Construction: Dead
Retail/clothing: DEAD
debt Service: ALIVE
taxes:ALIVE
here in the midwest older cars far out number newer cars in all but the wealthiest neighborhoods
I would imagine the rent on a mid sized dealership would be around 50K to 70K mo.
That kind of overhead starts adding up fast when no sales are occurring.
How many dealers will close? Who picks up the tab for defaults on the inventory loans?
“How many dealers will close?”
If we’re lucky, enough to finally break the undifferentiated theft racket referred to as “franchise laws.”
” Who picks up the tab for defaults on the inventory loans?”
The usual patsies: Those whom The Fed robs by debasement, in order to keep its favored class of incompetents flush.
True and it will happens again,and,and again!
Is this for April?
Edmunds with April Insanity:
0% Finance Deals Surge to All-Time Record Level in April, According to Edmunds
The average interest rate for a new vehicle dropped 25% month over month to 4.3% in April as automakers extend landmark incentives during the coronavirus pandemic
SANTA MONICA, CA — May 1, 2020 — Zero percent finance deals surged to a record level in April as automakers pulled out all the stops to encourage new vehicle purchases during the coronavirus crisis. According to the car shopping experts at Edmunds, 0% finance deals accounted for 25.8% of financed purchases in April, compared to 4.7% in March and 3.6% in February. This is the highest level of 0% finance deals that Edmunds has on record dating back to 2004.
…
Edmunds experts warn that some consumers might be making riskier purchasing decisions due to the greater availability of 0%, 84-month loan term deals. According to Edmunds data, the average loan term length hit a record high of 73 months in April, and 81% of car buyers who financed their vehicle agreed to a loan term between 67 and 84 months. Edmunds data also reveals that consumers are stretching their budgets for more expensive vehicle purchases — the average amount financed for a new vehicle climbed to a record high of $37,681 in April, while the average down payment dropped to $3,159 in April, a 21% decline compared to March and the lowest on record since July 2011.
Setting the stage for an even nastier subprime surprise in the not too distant future! They must be so certain of their future bailouts.
who’s surprised by this?In this ridiculously weak (dead) economy for such a ridiculously long time there’s so much you can do before it takes you under.Next exit complete govt collapse!
“Next exit complete govt collapse!”
If only!
No kidding? Duh.