Why aren't new cars selling? Is the car the problem?

General Discussion
61

" The mortgage banking crisis is largely a Democrat thing. They insisted that just about anyone with a job should be able to buy a house. That, in large part, led to the huge number of mortgage defaults. Republicans had a hand in the mess, too, by making it entirely too easy for just about anyone to become a mortgage broker and reduce their own risk by bundling and selling mortgages about as fast as they were let."

With all due respect…crap.
Problems in business. sports, education or the military are seldom caused by the overall philosophy and goals or in this case, political parties. It’s always the incompetence of the people trying to execute these goals and getting off task for personal gain; monetary or self promotion. The last eight years were marked by poor follow through and execution…from the war to the economy. That starts at the top…the CEO of the government, the president. That’s why we are here.

Any one who wants to blame our all our woes on a dem controlled congress, has to be consistent and blame 9/11 on those who were in power at the time.

62

Alan Greenspan, who should know better, argued for greatly expanded credit. The powers to be, Democrat or Republican took him at his word and allowed credit and mortgage qualifications that were ludicrous! The banks packaged this garbage debt and sold it off to foreigners as “asset backed” securities. Greenspan recently admitted he may have been wrong in encouraging unlimted credit.

So we have a single mother with two kids in Washington DC, who on a salary of $40,000 bought a $400,000 house with low inital monthly payments and default even without losing her job. One of the networks callled this a family tragedy; my parents would have called it stupidity on the part of the borrower, and irresponsible behavior by the financial institution.

So the final blame is on the commission paid bank employee andhis boss who faked the income requirement and sold an ILLEGAL mortgage, which the bank promptly sold to unsuspecting foreigners.

Years ago they sold used Cadillacs to visible minorities with low monthly payments and a final “balloon” payment which was equal to the residual value of the car if it was well maintained. Needless to say few ever paid off their loan and actually owned the car, but the interest rates were so high that the “loan sharks” finance company always got their money back.

63

Our daughter and son in law, both college educated, were on the “fence” when buying a house and listening to the bank come-ons and their house affordability. Fortunately they listen to us and disregarded the bank BS. Their house is smaller, but their mortgage is affordable and their future is secure. Too many have been taken in by previously trustworthy businesses, forced into less than honest practices by Greenspan and his low interest rates and lack of accountability.

64

It wasn’t just Alan Greenspan, but most politicians and their cronies, like Greenspan, who have continued to intervene on behalf of the bankers for 25 years or more. If the finance industry doesn’t pay the price for their errors, why should they change? If anything it should, and did, make them bolder. Actually, brazen is probably the correct word.

And $400,000 for a home in DC? Where did they find such cheap housing? That is not a joke - $400,000 is cheap inside DC.

65

This was a condo rather than a freestanding house.

66

I believe some of the things that are said are true. But I do believe that people would buy a car stacked with luxuries if they were able to trust the company they are buying the car from. Ford and GM screwed up their images in the 80’s when the Japanese companies skyrocketed because they were simply putting out quality units. Ford and GM became comfortable in their cushy offices believing they had nothing to worry about so they put out crappy vehicles without the foresight to see that would be their downfall. Over 20 years later they are still trying to live down that image. Now, not only do they have to fight off their image, they have to fight off the recession. The problems that they are facing are brought on by themselves. As far as bailing them out, that I don’t believe in. They dug their graves now it is time for them to lye in them. I work at a Toyota dealer and we are selling new Camry’s and Avalon’s more than Yaris’, which are the lower end models. The reason, I believe, is that people will invest their money in a vehicle that they can trust. No one can trust the American car-lines anymore, therefore putting them deep in debt and loss of profits. In my opinion, too little too late, not too much as far as accessories. People love those accessories and a lot of people don’t want to do without them.

67

Just on the news…Toyota sales are down so much, they are asking the Japanese govt. for a loan. So, even the makers of better vehicles are in crisis, proving that the economy has more to do with poor sales, GM or anyone as any other factor.

68

Cars sales are way down because the American Consumer is tapped out. As a Nation, we have come to the end of the credit rainbow. Car loans are very difficult to get, and even if you qualify, they are expensive. While everyone was watching the home foreclosure debacle, Repo-Man was working 24/7 hauling new cars to bank impound lots where they got sold at auction for .30-.40 cents on the dollar. The days of selling 17 million new cars a year are over. Try 8 million but to sell those, they will need a 10 year, 100,000 mile power-train and rust warranty…

69

Every night the news is so bad I think I going to climb under a rock for awhile and not listen anymore. If you have some money, the market dive and housing dive makes you wonder if anything is going to be left when the “bottom” is reached - is there a bottom? No confidence = No spend.

70

The many people currently financially able to buy an expensive new car have the money in the bank because they have been frugal in the recent past. There is now a wide gap in the economy due to the over extension of credit to those of the “carpe diem” culture.

71

Ultimately the car is the problem…when the EV comes on line, ALL car companies that don’t adapt to other manufacturing needs will be doomed.

oil changes - usually every 3,000 miles

belts - check with every oil change

timing belts (where applicable) - usually every 60,000 miles, or 90,000 miles

brakes - front brakes usually last 20,000-30,000 miles, rear brakes usually 60,000 miles varies depending on driving habits and conditions

transmission services - usually every 60,000

coolant services - usually every 2 years, some coolant types are good for 5 years

tires - vary widely

hoses - check with every oil change, rot from the inside out

spark plugs - usually every 30,000, some every 60,000, some every 90,000

spark plug wires - usually every 60,000 miles or when they go bad

distributor cap and rotor - cars that have them usually every 60,000 miles

air filter - should be checked with every oil change

THE PROFITS IN ALL THESE AREAS WILL BE GONE !!!

72

What will we do then? They’ll be nothing to talk about - no more “Car Talk”!

73

I think we educators should take part of the blame in not teaching our young people the concept of credit and how much it costs. I taught a large (88 students) class in computer software last semester for college freshmen. I introduced them to the financial functions on Excel. I used a real problem: I purchased a house in 1977 for $20,000. I put $4000 down and financed $16,000 over 15 years at 5.625%. We calculated the interest I paid on this loan. I then changed the problem–let’s assume a car was purchased with a price of $20,000 minus a trade-in of $4000. $16,000 would be financed over 4 years a 9.5%. We then used Excel to calculate the cost of the loan. Some the the students had eyes as big as silver dollars when they saw the amount. One student came up after class, shook my hand, and thanked me for the lecture.

I have colleagues–college educated people–when negotiating for a car just ask the following: “What will my monthly payments be?” I don’t think very many people understand that when securing a loan,one is actually renting money. Things have become so bad that I think that Wall Street Thugs were able to dupe a lot of the public.

74

The changeover will be very gradual; first hybrids, then plug-in hybrids, and EVENTUALLY EVs and fuel cell cars. When the autombile arrived on the scene the buggy manufacturers gradually became car body manufacturers. Studebaker made Conestoga wagons before making cars. The buggy whip manufacturers gradually started making other things. Saddle and tack makers gradually went out of businmess and those remaining focused on recreational applications. Livery stables became parking garages, etc.

EVs and fuel cell vehicles will require a whole host new services, which will replace the current high level of internal combustion engine services.

You may not be old enough to remember the tube testing machines in every convenience store, such as 7-11. When radios and TVs had tubes (instead of transisters) you could test your own tubes and if defective, the store sold you a replacement. Convenience stores now sell a whole range of things that did not even exist in the 50s and early 60s.

Agree. it’s adapt or perish, but that is what business is all about! Us your imagination, and you’ll be able to face the future. Kodak almost went under because they underestimated the speed with which people would switch to digital cameras!

75

“Kodak almost went under because they underestimated the speed with which people would switch to digital cameras!”

I think Kodak did a good job managing the transition. They had to sell a very profitable division to get into the commercial digital imaging market and continue to operate the huge film manufacturing operations. And find a niche while learning how to mass produce a quality product. They did all that in much less than 10 years.

76

Agree; lesser companies WOULD have gone under. Rapid technological change is difficult to manage if your executive team is not fast on its feet!

77

“EVs and fuel cell vehicles will require a whole host new services, which will replace the current high level of internal combustion engine services.”

Please excuse the location of this response…
but what new services. Electric motors provide all power, braking with NO service for twenty plus years. Batteries are replacement, non serviceable items. Even with the series hybrid (Volt) to generate electricity will be one dimensional, single rpm, low maintenance low tech ICE w/o a transmission and 20 year owner serviceable item; like our lawn mowers/generators . Everything else can be handled by small business; suspension,air and electronics and entertainment.
Check the air and refill the washer…that’s it for 5 to 20 years.
Don’t put any money in ANY automotive stock, unless GM starts making more “tools” for defense dept; the biggest reasons Ratheon and GE will survive.

78

Options.
How about NONE ?
Do you know just how many pzzzd off customers leave the dealership because they can’t buy a plain ol’ truck ?
6 cyl, man trans, 2wd, no a/c, no abs, no air bags, vinyl bench seat, vinyl/rubber floor coverings, radio, no power windows,and no chip keys. Get it muddy - hose it down.

All these ‘forced upon us’ systems have driven the prices out of reach. AND the desire to get ‘of of those’ down the drain.

79

Clinton had plans to go after Osama, but they wern’t finalized until near the end of his 2nd term. Therefor rather then making the decision and letting someone else deal with the mess the Clinton administration decided to let the Bush adminstration decide what to do. The Bush adminstration totally ignored the plan and anything associated with it (insiders say it was ignored because it was related to the Clinton administration, but as I’m not a psycic I can’t really know what they were thinking). So I’d say the pretty vast majority of the blame lies with the Bush administration. They had a target, and they had a plan, all they needed to say was “Go do this”, or they could have come up with another plan and said “Go do that”. Instead they sat around and did nothing.

80

Overtaxation has destroyed the economy. People don’t have the money to buy cars, because government took 3/4 of the income.