3rd Time is a charm

Now you can count 3 as in the deals for parts of GM that have fallen through. Just announced is the deal for SAAB is off. Considering they only sold 513 cars in the U.S. for the month of October, backing out of this one is probably good business.

Does anyone ever think that the days of 15+million cars produced a year in the U.S. will ever return?

I’m sure the 15 million cars per year will return when the recession ends and Toyota, Honda, Mazda, Hyundai, Kia, Fiat, BMW, Mercedes and others expand US production. Also count on Magna entering the market. The players will be different, but US manufacturing, after all the adjustments, is basically sound, unlike Western Europe where they still have very high labor costs and overheads.

So no adjustments in spending and consumption will come out of this latest crisis? Isn’t it overspending (on both personal and a governmental level) that got us into this mess?

I certainly do not see it being realistic to expect Americans on a mass level to live within their means and save more,use less credit. These ideas have degraded into some kind of "I have a dream’ type speech. People are not going to go back to saving up and paying cash, it sure sounds like the responsible way but its not going to happen.

The only way I see selling 15 million cars a year is a big use of credit and then here we go again.

Labor is overhead in Europe, isn’t it - especially Germany? They make the UAW look like a bunch of Kindergartners.

i think one aspect of this economic crisis that is positive is that people have to save more and use less credit because easy credit is no longer available.

The only way we will see less than 15 million cars in the long run is if we drive less, or the cars will last longer. When I was a kid the market was 7 million, US population was 165 million or so and there was 1 car for every 4 persons.

Cars have always been bought on credit, but the next time around it will be responsible use of credit resulting in people buying cheaper cars. The same will be true for home purchasing; buying houses people can actually afford.

There is not much that is sillier looking than a Saab. Jonesie’s old tow truck comes to mind. It was a Dodge with Edsel looks. He had one of those too. He ran an honest shop.

Cars last pretty long right now. The trouble is that people trade them well before they need to just to have the latest style. As soon as the car is paid for, or before, it gets traded for a new one.

Perhaps, but I probably won’t live to see it. My reasoning is that

  • credit access is tightening up…the industry became way too insolvent, way too opportunistic and predatory for its own good.
  • loan rates are up.
  • cars today are reliable twice+ as long as they used to be. 100,000 miles used to be the point at which reliability dropped, now its starts at 200,000 miles and higher.
  • people are repairing their cars now and keeping them rather than trading them for the new models just to get the latest features and styling.
  • new car loans when I bought my first new car were limited to two and three years. Now four and five years are common and even longer can be found. This too promotes people buying new cars far less often.
  • the boomers are aging. The surge in buying driven by the boomer generation has pretty much passed.

Agree that cars last much longer now, so we’ll not likely see an increase in lifetime to over 20 years. That was the point I was making; the US is still scrapping cars at an enormous rate, even without the CFC program and as long as that happens, and people keep driving (we’ll not see extensive public transport any time soon)the cars have to be replaced.

However, most people can make do with a basic compact and those that need more room, a basic minivan. So, the numbers won’t change much; but the price will.

During WW II car production was halted, last year was 1942, and did not resume till 1946. Mechanics had a field day fixing up old cars, since there were just no new cars available. Many of these fixes would not have been cost-effectve if new cars had been available.