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Channel Stuffing The Economy: There Has Never Been More Cars “On The Sidelines”
Welcome to the new normal… The “if we build it (and offer credit to anyone who can fog a mirror), they will come” economy. While LeBeau and his cronies are cock-a-hoop over auto sales (no matter how those sales are achieved), it seems the carmakers are way ahead as the value of cars on the sidelines (inventories) has never, ever, been greater than now.
There has never been more cars in inventory than now…!
And unless this chart keeps soaring up and to the right… (leaving US consumers increasing debt-laden with just a wastuing asset as collateral)
and unless China picks up again real quick…
The global auto industry in recent years has been betting heavily on China’s west, where they see potential for faster growth than in the more affluent—and car-saturated—cities along the coast and in the country’s eastern and southern manufacturing belts.
Instead, the region has been hard hit by China’s economic slowdown, curbing auto sales and leaving residents like Chen Liang pinching pennies. On Wednesday, at an auto show in the sprawling western city of Chongqing, the 24-year-old junior manager for a laptop maker inspected a Chevrolet Aveo sedan, which sells for just under his budget of 100,000 yuan (US$16,120), once a 10,000 yuan discount is factored in.
The cost of living in Chongqing is comparable to Shanghai, Mr. Chen said in an interview. “But the salaries here are much lower.”
We are going to need a bigger parking lot… (from 2014)
Where the World's Unsold Cars Go To Die (courtesy of Vincent Lewis' Unsold Cars)
So there they sit, brand spanking new cars, all with a couple of miles on the clock that was consummate with them being driven to their car parks. Below is the latest May 2014 Google Maps image of unsold cars in Corby, Northamptonshire.
The longer they sit there the worse it slowly becomes for them. What is the answer to this? Well they need to be sold and that just isn't happening without more credit.
Source: http://silveristhenew.com/2015/06/11/channel-stuffing-the-economy-there-has-never-been-more-cars-on-the-sidelines/
