At The Confluence of Free Money, Pent-Up Demand, And Reality
by Wolf Richter, Testosterone Pit.com:
New vehicle sales have staged a phenomenal recovery from the financial crisis, when buyers went on strike. Sales below the replacement rate create a vacuum that wants to be filled. Pent-up demand. When it kicked in, sales jumped by over 10% annually. Exuberance took over the bludgeoned industry. But late February, something happened to that vacuum.
The average amount of time it took to sell a new vehicle has been creeping up—a sign that sales were stalling. At the end of February it hit 64 days, the slowest rate since the dreadful days of the summer of 2009, when the survival of the entire US auto industry was in question, when GM and Chrysler went bankrupt, when the taxpayer was dragged into the fray, screaming and kicking, to bail them out of bankruptcy. Cash-for-clunkers kicked off that July, $3 billion in rebates designed to save the industry. And that August, it took 64 days on average to sell a new vehicle. That we’d now see that number again is not good.
Read More @ TestosteronePit.com
2013-03-16 09:50:52
Source: http:///2013/03/at-the-confluence-of-free-money-pent-up-demand-and-reality/
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