Who could have seen this coming? Oh yeah. Me.
Submitted by Tyler Durden on 03/03/2015 15:31 -0500
A running theme here has been the great rotation of bubble-blowing credit from subprime housing to subprime auto-loans. Amid government probes of underwriting standards and soaring delinquencies, it appears when the least-creditworthy Americans are cut off from debt servitude, bad things happen in car sales…
- *FORD FEB. U.S. LIGHT-VEHICLE SALES FALL 2.0%, EST. UP 5.8% (miss!)
- *GM FEB. U.S. AUTO SALES UP 4.2%, EST. UP 5.9% (miss!)
- *NISSAN FEB. U.S. AUTO SALES UP 2.7%, EST. UP 3.8% (miss!)
- *FIAT CHRYSLER FEB. U.S. AUTO SALES UP 5.6%, EST. UP 8.2% (miss!)
- *HONDA FEB. U.S. AUTO SALES RISE 5%, EST. UP 11% (miss!)
- *TOYOTA FEB. U.S. AUTO SALES RISE 13.3%, EST. UP 15%( miss!)
Of course, the real blame – as we will be told – is the weather… It seems Obama’s new American Dream of a brand new Ford or GM (or Maserati) in every driveway may be another broken promise.
- *FORD SAYS WEAK TEXAS SALES MAY HAVE BEEN WEATHER RELATED
So did the analysts that forecast sales not know that there was weather? not know the seasonals in fleet sales?
This won’t end well…
as the delinquencies are already surging…
The details are even worse:
- *FORD FEB. U.S. F-SERIES SALES DOWN 1.2%
- *FORD FEB. U.S. ESCAPE SALES DOWN 9.6%
- *FORD FEB. U.S. FUSION SALES DOWN 4.9%
- *JAGUAR LAND ROVER CEO SEES 2015/2016 PROFIT MARGIN DECLINING
This really should not be a total surprise as auto sales have fallen and missed for 2 months in a row…
And now 3rd month:
- *AUTODATA: FEB. LIGHT VEHICLE SAAR 16.23M UNITS, EST. 16.6M
Even Phil LeBeau could only muster “lacklustre” as a response to this data…
But finally…
- *LAMBORGHINI CEO SEES HIGHER SALES IN 2015 THAN 2014
We leave you with this…
Sergio Marchionne, chief executive officer of Fiat Chrysler, said in an interview. “Full employment, low interest rates, stock prices up. It’s like dreamland.”
What happens when roughly 30 million auto loans go into default at the same time? It’s a given that those borrowers will start ‘the next round’ with a huge blemish on their credit and be unable to access new credit; but also:
A) What percentage will be repossessed?
B) What percentage will be abandoned or become lawn ornaments? (No fuel and nowhere to go anyway…)
C) Will those vehicles be, in some way, remotely disabled?
Hark! I hear one’s own horn tooting…
When you got it, flaunt it.
(Admin Jim) “I told ‘ya so”!
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Around Metro De’toilet, most auto makers are offering close to 0%, for up to 7 years. OR, most likely, 3 year, 30k mile rentals with huge buyouts/payouts at the end. The rent seems ridiculously low. Like $99 for a $25,000 car. How in any world is less than $4000 the money-making amount for a car that the sale is being banked at $25k.
This world is so corrupted, nothing is at it seems.
When the bottom drops out on car loans, look to the credit cards for the reality of the country.
I’ve been wrong before, a few years back when it felt like the bottom was finally going to drop, then it didn’t, but damn if the air isn’t positively crackling with bad outcomes.
Everything is nearing complexity collapse – the outliers of death and destruction are everywhere if one cares to look – and war beckons on at least two continents.
What a time to be alive. Run Llpoh, run.