Submitted by Tyler Durden on 10/27/2015 13:35 -0400
With the second half of 2015 “grim” for Chinese auto sales, US automakers – who have field-of-dreams-like built inventories to record levels – have turned domestic for growth by extending credit for decades to anyone who can fog a mirror. That was all well and good until we discover this morning that the government’s consumer confidence survey shows Americans auto-buying attitude is the lowest since Jan 2013.
1. Inventories are at record (absolute) highs and at recession-signalling ratios to current sales…
2. And that is a problem because the much-hyped and hoped-for future sales to soak all this excess inventory up is not coming soon… As the consumer confidence survey shows the lowest level of “plans to buy an auto” since January 2013…
Probably a good time to hike rates then…
Automakers appear to have two options, offer buy-one-get-one-free to all new
Syrian refugees or cut production dramatically in hopes of easing
inventory excess. Good luck.
Charts: Bloomberg
Cars cost too much – Buy a Vibrator instead:
>> As a woman passed her daughter’s closed bedroom door, she heard a strange buzzing noise coming from within. Opening the door, she observed her daughter with a vibrator.
>>
>> Shocked, she asked: ‘what in the world are you doing?’
>>
>> The daughter replied: ‘Mom, I’m thirty-five years old, unmarried, and this thing is about as close as I’ll ever get to a husband. Please, go away and leave me alone.’
>>
>> The next day, the girl’s father heard the same buzz coming from the other side of the closed bedroom door. Upon entering the room, he observed his daughter making passionate love to her vibrator.
>>
>> To his query as to what she was doing, the daughter said: ‘ Dad I’m thirty-five, unmarried, and this thing is about as close as I’ll ever get to a husband. Please, go away and leave me alone.’
>>
>> A couple days later, the wife came home from a shopping trip, placed the groceries on the kitchen counter, and heard that buzzing noise coming from, of all places, the living room. She entered that area and observed her husband sitting on the couch, downing a cold beer, and staring at the TV.
>>
>> The vibrator was next to him on the couch, buzzing like crazy.
>>
>> The wife asked: ‘What the f@!* are you doing?’
>>
>> The husband replied: ‘I’m watching football with my son-in-law.
Cars are not worth what they are charging for them. When you can buy a serviceable sedan for $5000 or less, brand new – in other parts of the world – you have to ask yourself: ‘Why am I paying $35,000+ for something which is fundamentally, functionally, identical to the $5000 car?’
That in-car entertainment and snooping system you are getting with the car is not worth a $30,000 premium.
Only one in a hundred cars here looks old because the driver for some reason doesn’t qualify for one of the countless welfare programs or SSD; and dealer’s used car overflow lots are springing up around town probably because overseas auction buyers have stopped buying them. I think we are into the retail slow down and wholesale pile-up before The Global Crash. Maybe that is why the MSM is running so many gushingly rosy shows about Cuban Resorts, free Cuban education even for doctors that is as good as American; free entertainment, free public medicine and almost free transportation, food and housing, utilities etc. Cuba is the next rabbit in their hat.
Next to healthcare, automotive is one of our biggest customers.
About four months ago one of the engineers at a company we work at said they were planing on a huge slowdown in the next year, said there was a bubble, and it went, pop.
The last three years we are balls to the walls, guys working six days a week while these companies spend money like happy days are here again. The guys on the floor seem to see what is happening, the guys running the show, not so much.
We also do work at Alcoa, they are splitting up, selling divisions that are bleeding money, so we get to renovate all the corporate offices and boardrooms. Losing money? Fuck it, spend more on renovations!
rhs jr – I’d love to have the concession to sell paint in Cuba for the next few years! Although, as a matter of principle, I wouldn’t, because I know all sales are skimmed by the Cast-off bros.
Coincidence Theorist – someone who believes it was pure coincidence that VW (who makes some of the best cars) is now having these emissions problems….