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Discussion: (7 comments)

  1. MacDaddyWatch

    1-BY FAR THE OLDEST AUTO FLEET IN AMERICAN HISTORY–THE AVERAGE CAR ON THE ROAD IS NOW AN OLD CLUNKER

    2-SANDY KOd THOUSAND OF VEHICLES THAT NEEDED REPLACEMENT

    3-LOWEST FINANCE COSTS ON RECORD

    4-NEARLY 4-YEARS INTO AN ECONOMIC RECOVERY

    Combine all of that and the pop in unit sales is no BFD at all.

  2. I have to agree with our friend above. And old fleet. A bigger population. The availability of cheap loans to subprime borrowers at more than 100% of the vehicle value. All of these factors lead to a pop in sales. The trouble is what happens when demand is satisfied among the most desperate and companies like GM have to figure out how to dump all of that inventory on the market. Eventually profits will collapse and the auto industry will be in the same place as it was last year. The cure is the liquidation of the bad companies but given the trend towards bailing out the incompetent I doubt that we see such an event until the bond market speaks.

  3. The Unknown One
    1. Jon Murphy

      Yeah, I would generally agree with that analysis. Maybe not quite as optimistically in the short term as he, but in general, yes.

  4. Jon Murphy

    Finally had some time to analyze the numbers.

    Retail Sales in November did grow at an unusually fast pace from October (it was the 12th strongest October to November rise on record). I suspect Hurricane Sandy had a lot to do with this.

    Even when correcting for Sandy, the long-term trend in this market remains overtly positive: annual Sales (non-seasonally adjusted) total 14.4 million units, a gain of 13.4% above last year. The pace of rise appears to have reached a peak, and will begin diminishing in early 2013. Given this market’s relationship to leading indicators, it should have at least another 2-3 quarters of growth.

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