Derico
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Why Have Auto Sales Collapsed In US, EU, Japan?

Fri Nov 14, 2008 4:18 pm

During the Argentine economic crisis car sales plunged by as much as 56%, given the severity of that crisis it is not something totally surprising. Of course they rebounded and this year will be a record high, in spite of the end of the year which may see the first signs of the recessions in the first world and the Brazilian and Chinese slowdowns hitting us with much slower sales.

What is shocking is that similar numbers, drops of 30% in the US, 40% in Spain, 25% in Great Britain, etc, are now commonplace month to month. Given that these countries have superior disposable income than Argentina and certainly deeper and more competitive credit market and financing capabiities for consumers, what explains such severe drops in car sales? These numbers are reflective of all EU nations and North America and Japan... not exactly emerging markets. Yet those numbers are nearly as bad as emerging markets in turmoil where credit is GONE, currencies are devalued, and people have to pay cash for cars.

Why are car sales so terrible?
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LAXintl
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RE: Why Have Auto Sales Collapsed In US, EU, Japan?

Fri Nov 14, 2008 4:27 pm

Well in the US, I'll give you two reasons 1) people holding onto their money and not making major purchases 2) Difficulty financing cars - some brands have stopped leasing completely, while others having a difficult time qualifying clients for financing to buy them unless you have strong credit score.

To me however the slow down has been very beneficial. Last month I picked up a European luxury car at $8,000 below MSRP!

Like I say, in adversity there is opportunity!
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AirCop
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RE: Why Have Auto Sales Collapsed In US, EU, Japan?

Fri Nov 14, 2008 4:28 pm



Quoting Derico (Thread starter):
Why are car sales so terrible?

People are afraid to spend money of new cars,when it's possible they might lose their employment especially where there might be pressing needs in other areas of the household, ...that's just for starters.
 
scrubbsywg
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RE: Why Have Auto Sales Collapsed In US, EU, Japan?

Fri Nov 14, 2008 4:29 pm



Quoting Derico (Thread starter):
more competitive credit market and financing capabiities for consumers

Not heard of the recent credit crisis? Consumer confidence way way way down? Record job losses this year? etc. etc. etc.? Doesn't surprise me that car sales are down. People have lost a lot of money in houses and investments. The last thing they are going to do is buy a $30 000 car.
 
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STT757
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RE: Why Have Auto Sales Collapsed In US, EU, Japan?

Fri Nov 14, 2008 4:34 pm

People are worried about two things.

1.) Will they still have a job
2.) can they pay their mortgage
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Cadet57
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RE: Why Have Auto Sales Collapsed In US, EU, Japan?

Fri Nov 14, 2008 4:37 pm



Quoting STT757 (Reply 4):

Id go a few further

-Can I afford to heat my home this winter
-Can I keep food on my table.
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Arrow
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RE: Why Have Auto Sales Collapsed In US, EU, Japan?

Fri Nov 14, 2008 4:43 pm

Because when people fear for their jobs, they are very reluctant to make big ticket purchases which require them to borrow money. The only bigger ticket item for most folks is their house -- and we all know where that market is right now.

Combine that with the fact that lending institutions are getting a lot stingier (for obvious reasons) about who they will loan money to. Add to all that the fact that Americans (Canadians too, but to a lesser extent) are already in hock up to their eyeballs.

And finally -- North American manufacturers (the so-called big three) are still trying to flog gas guzzlers that no one wants. Oil may be under $60 bbl, but anyone with half a brain knows that long term it's going to go up again.
Never let the facts get in the way of a good story.
 
David L
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RE: Why Have Auto Sales Collapsed In US, EU, Japan?

Fri Nov 14, 2008 6:09 pm



Quoting Derico (Thread starter):
Given that these countries have superior disposable income

But increased costs mean you have to think more carefully about what you need, unless your income is so great that you can't spend it or invest it fast enough. E.g. do you need a new car now or can you keep your existing one a while longer?

Quoting Derico (Thread starter):
and more competitive credit market and financing capabiities for consumers

Yeah, as explained above, there's a bit of a snag there.  Smile
 
MD-90
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RE: Why Have Auto Sales Collapsed In US, EU, Japan?

Fri Nov 14, 2008 8:45 pm



Quoting Derico (Thread starter):
Why are car sales so terrible?

This is a balance sheet recession. People and businesses need to save and purge bad debts.
 
gordonsmall
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RE: Why Have Auto Sales Collapsed In US, EU, Japan?

Fri Nov 14, 2008 8:46 pm



Quoting David L (Reply 7):
E.g. do you need a new car now or can you keep your existing one a while longer?

Exactly! The fact is that most people in the UK who purchase new(er) vehicles do so out of want, rather than need.

In the current climate many of those people are simply hanging on to their existing cars which are still prefectly serviceable.
Statistically, people who have had the most birthdays tend to live the longest.
 
A332
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RE: Why Have Auto Sales Collapsed In US, EU, Japan?

Fri Nov 14, 2008 8:48 pm

You can barely even push a used car these days without practically giving it away.... people are nervous and holding their money... until things look rosier, that's how it's going to stay.

It's not just auto sales that are down... look at Circuit City... retailers are taking a major hit and if the Christmas season does not result in adequate levels of sales, there will be many more in trouble come January.

It's just the tip of the iceberg, in my opinion.
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asuflyer05
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RE: Why Have Auto Sales Collapsed In US, EU, Japan?

Sat Nov 15, 2008 1:54 am

Don't forget that leasing, which for some of the import manufacturers is a major chunk of their business, is much less attractive nowdays. Banks got tired of taking it on the chin when the values of their cars dropped out of the sky. So they lower the residual value of the car so the buyer is now paying more depreciation over the term which means a higher payment.
 
Falcon84
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RE: Why Have Auto Sales Collapsed In US, EU, Japan?

Sat Nov 15, 2008 2:13 am



Quoting LAXintl (Reply 1):
Well in the US, I'll give you two reasons 1) people holding onto their money and not making major purchases 2) Difficulty financing cars - some brands have stopped leasing completely, while others having a difficult time qualifying clients for financing to buy them unless you have strong credit score.

Bingo. Give that man a cigar. Those are the reasons.

People are scared to death about the economy-and, by extension-their jobs right now, and, unless someone is very secure in their jobs, major purchases can wait until this crisis has passed. And the credit crunch is making it terribly difficult to buy any big-ticket items.

I'll probably be buying a car in 2 to 3 years, and that may be good timing. Hopefully, we're seeing light at the end of the tunnel of this financial meltdown, and there should be even more fuel-efficient models out by then-plus credit will be a bit easier to come by-I hope.
Work Right, Fly Hard
 
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ManuCH
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RE: Why Have Auto Sales Collapsed In US, EU, Japan?

Sat Nov 15, 2008 12:12 pm

I have my own theory regarding this financial crisis: a big part of it is created by mass media.

Let's be honest (and I'm talking about Europe here, it could be different in the US, but this thread is about US, EU and Japan): I don't know one single person who lost his job or is earning less money because of this crisis. Nonetheless, everyone is scared. Why? Because you hear on TV every day how bad everything is going to be. People don't know whom they should believe, there are hundreds of different opinions, and this causes the downing of "consumer confidence".

Somehow I feel that this is all blown out of proportion. But again, this is just my own opinion.
Never trust a statistic you didn't fake yourself
 
rfields5421
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RE: Why Have Auto Sales Collapsed In US, EU, Japan?

Sat Nov 15, 2008 12:50 pm



Quoting Gordonsmall (Reply 9):
Exactly! The fact is that most people in the UK who purchase new(er) vehicles do so out of want, rather than need.

In the current climate many of those people are simply hanging on to their existing cars which are still prefectly serviceable.

It is not just the UK.

Across the world new car sales are driven more by want than need. Even now with the declining numbers, the new car purchasers are still making the purchases not because they must have a NEW vehicle, but because that is what they want, and in most cases believe they can afford.

And there are great bargains out there for people with the cash available - amazing bargains.
 
ltbewr
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RE: Why Have Auto Sales Collapsed In US, EU, Japan?

Sat Nov 15, 2008 2:02 pm

Some additional factors besides those mentioned (especially as to the USA market):

People are keeping their vehicles longer now, like 5-6 years or more due to them taking out longer loans.

Many who want or wanted to dump their SUV's or less efficient cars for more efficent cars found the trade-ins or resales went to the basement, so have to keep their current vehicles. Fortuntally fuel prices have dropped a lot so one can keep them for a bit longer.

Discounted or 0% financing deals were offered in the past, people took advantage of them, so don't need a newer vehicle now.

Buying late model used owned and off-lease vehicles if they need a new vehicle.

Not wanting to have any loan debt.

There current car is still in good shape, they maintain it, no need for a newer vehicle.

Most cars are a lot more reliable, need less maintence, less frequent wear and tear work, so less need to replace a vehicle.

Cars and trucks are a lot less of an ego thing anymore, don't need a new car anymore. to boost one's ego.
 
rabenschlag
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RE: Why Have Auto Sales Collapsed In US, EU, Japan?

Sat Nov 15, 2008 2:09 pm

In Germany, I think part of the equation is that the income of joe average has been stagnating since 5 years or so (in fact, many people make less money when adjusted for inflation).

At the same time, the cost of buying and maintaining cars has increased disproportionately.

In Germany, a Saturn (Opel) Astra (1.8 Ecotec 5 dr.) costs app. 20.000 $ before taxes and app. 24.500 $ after taxes.

In the US, it's 16.000 before taxes and perhaps 17.500 after taxes depending on where you live.

At the same time, the averave income of regularly employed workers (blue collar) in Germany in 2006 was about 27.000 $ / year after taxes including retirement plan and health insurance for the whole family. So it almost takes one year's income to buy an entry level car.
 
melpax
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RE: Why Have Auto Sales Collapsed In US, EU, Japan?

Sat Nov 15, 2008 2:20 pm



Quoting LAXintl (Reply 1):
Well in the US, I'll give you two reasons 1) people holding onto their money and not making major purchases 2) Difficulty financing cars - some brands have stopped leasing completely, while others having a difficult time qualifying clients for financing to buy them unless you have strong credit score.

Here in Australia, GE & GMAC have announced they are closing down their car finance operations here. One of the major effects of this is that many dealerships here are in a mad scramble to obtain new sources of credit for their stock, which is not an easy task given current circumstances. Only today I was at an auction house here & they had a stock of brand new cars to be auctioned that were repossessed from a Holden (GM) dealership that had closed down.

http://www.goauto.com.au/mellor/mell...2/C50516C670BC093BCA2574F0001CCD09
Essendon - Whatever it takes......
 
asuflyer05
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RE: Why Have Auto Sales Collapsed In US, EU, Japan?

Sat Nov 15, 2008 2:40 pm

Melpax, are you in the car business in Australia?
 
melpax
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RE: Why Have Auto Sales Collapsed In US, EU, Japan?

Sat Nov 15, 2008 2:45 pm

Not at the moment, but my family was previously, used to own a petrol station... Also, most of the big auction houses here are open to the public, as well as the dealers.

[Edited 2008-11-15 06:46:25]
Essendon - Whatever it takes......
 
Cadet57
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RE: Why Have Auto Sales Collapsed In US, EU, Japan?

Sat Nov 15, 2008 9:10 pm



Quoting ManuCH (Reply 13):
I don't know one single person who lost his job or is earning less money because of this crisis.

Myself, and both my parents. I went from 20-30 hours a week to 10. My father used to get about 10-12 hours of over time a week on top of a 40 hr week, he's down to maybe 2-3 hours of o/t. My mom works a little less each day from what she was this time last year.
Doors open, right hand side, next stop is Springfield.
 
MD-90
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RE: Why Have Auto Sales Collapsed In US, EU, Japan?

Sat Nov 15, 2008 10:14 pm



Quoting LTBEWR (Reply 15):

People are keeping their vehicles longer now, like 5-6 years or more due to them taking out longer loans.

5-6 years is longer? We have a 20 year-old F-150, a 12 year-old Civic, and a 12 year-old Grand Caravan. My dad just paid cash for a new RAV4 replacing his 14 year-old Explorer. What is wrong with maintaining a vehicle and getting some value out of it?

So many people feel the need to keep up with the Joneses and use cars as status artifacts rather than as practical transportation. This is changing with the loss of the easy credit bubble that the our central bank and other worldwide central banks created.
 
Dougloid
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RE: Why Have Auto Sales Collapsed In US, EU, Japan

Sat Nov 15, 2008 10:20 pm



Quoting Derico (Thread starter):
Why are car sales so terrible?

Mucho trabajo, poco dinero.

Quoting Arrow (Reply 6):
And finally -- North American manufacturers (the so-called big three) are still trying to flog gas guzzlers that no one wants.

If I had to take a guess I would call that the Big Four. In the field of gas guzzlers Toyota is doing a great job flogging SUVs that they're having to give away at fire sale prices.
If you believe in coincidence, you haven't looked close enough-Joe Leaphorn
 
Cadet57
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RE: Why Have Auto Sales Collapsed In US, EU, Japan?

Sat Nov 15, 2008 10:20 pm



Quoting MD-90 (Reply 21):
What is wrong with maintaining a vehicle and getting some value out of it?

Nothing, its what we do in our family. I have a 5 year note on my car but would love to get atleast 7 out of it.
Doors open, right hand side, next stop is Springfield.
 
Dougloid
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RE: Why Have Auto Sales Collapsed In US, EU, Japan

Sat Nov 15, 2008 10:37 pm



Quoting Cadet57 (Reply 23):
Quoting MD-90 (Reply 21):
What is wrong with maintaining a vehicle and getting some value out of it?

Nothing, its what we do in our family. I have a 5 year note on my car but would love to get atleast 7 out of it.

1987 Mitsubishi pickup. 160,000 miles on it. Freshened up the engine at 130,000 miles. I did it all myself.

1993 Mazda MPV. 150,000 miles on it.
If you believe in coincidence, you haven't looked close enough-Joe Leaphorn
 
Cadet57
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RE: Why Have Auto Sales Collapsed In US, EU, Japan?

Sat Nov 15, 2008 10:40 pm



Quoting Dougloid (Reply 24):
1987 Mitsubishi pickup. 160,000 miles on it. Freshened up the engine at 130,000 miles. I did it all myself.

Heh, that thing is as old as me  thumbsup 
Doors open, right hand side, next stop is Springfield.
 
flybyguy
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RE: Why Have Auto Sales Collapsed In US, EU, Japan?

Sat Nov 15, 2008 10:45 pm



Quoting STT757 (Reply 4):
People are worried about two things.

1.) Will they still have a job
2.) can they pay their mortgage



Quoting AirCop (Reply 2):
People are afraid to spend money of new cars,when it's possible they might lose their employment especially where there might be pressing needs in other areas of the household, ...that's just for starters.

Job security is above anything else. With job security comes consumer spending. IMHO this has nothing to do with the ability to secure a loan... this is more a question of the consumer's willingness to put his/her money out there. Government and industry need to come together and see how they can mitigate job losses otherwise no consumer, myself included, is going to spend a dime on anything but necessities. I think the number of people who will benefit from this economic downturn (people with mountains of cash onhand and relatively secure jobs) are miniscule to the number of people who are hurting... people who have lived beyond their means to support ever growing industries dedicated to extravagant levels of consumer spending.

I have learned valuable lessons from this downturn having newly entered the working world from school.
1) Live within your means no matter what your income
2) Save as much as possible whenever possible
3) Work to keep yourself marketable even if you have a secure job
4) The only person that will care whether you eat tomorrow is you so don't depend on government or industry to save you
"Are you a pretender... or a thoroughbred?!" - Professor Matt Miller
 
Dougloid
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RE: Why Have Auto Sales Collapsed In US, EU, Japan

Sat Nov 15, 2008 11:00 pm



Quoting Flybyguy (Reply 26):
I have learned valuable lessons from this downturn having newly entered the working world from school.
1) Live within your means no matter what your income
2) Save as much as possible whenever possible
3) Work to keep yourself marketable even if you have a secure job
4) The only person that will care whether you eat tomorrow is you so don't depend on government or industry to save you

Jeez.....took you long enough to figger it out.

Had you been born blue collar you would have imbibed it with your mother's milk.
If you believe in coincidence, you haven't looked close enough-Joe Leaphorn
 
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Aaron747
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RE: Why Have Auto Sales Collapsed In US, EU, Japan?

Sat Nov 15, 2008 11:02 pm

[quote=Flybyguy,reply=26II have learned valuable lessons from this downturn having newly entered the working world from school.
1) Live within your means no matter what your income
2) Save as much as possible whenever possible
3) Work to keep yourself marketable even if you have a secure job
4) The only person that will care whether you eat tomorrow is you so don't depend on government or industry to save you
[/quote]

You're off to a great start - with a financial head on your shoulders like that, you'll never be in dire straits. Wish those four points were taught to every high school student, but a lot of folks don't have parents who can do even one or two of them, so not sure what good it would do.
If you need someone to blame / throw a rock in the air / you'll hit someone guilty
 
CPDC10-30
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RE: Why Have Auto Sales Collapsed In US, EU, Japan?

Sun Nov 16, 2008 1:15 am



Quoting ManuCH (Reply 13):
I don't know one single person who lost his job or is earning less money because of this crisis

You're living a very privilged life then! I managed to withdraw my savings from and Icelandic bank two weeks before they went bust, and now have a pay cut at work.

People aren't spending nearly as much as they used to. It has a trickle down effect. One restaurant near where I work used to have lunchtime meals for about £13. It is now £5 including a drink!
 
Alessandro
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RE: Why Have Auto Sales Collapsed In US, EU, Japan?

Sun Nov 16, 2008 9:13 am

Quoting Dougloid (Reply 24):
Quoting Cadet57 (Reply 23):
Quoting MD-90 (Reply 21):
What is wrong with maintaining a vehicle and getting some value out of it?

Nothing, its what we do in our family. I have a 5 year note on my car but would love to get atleast 7 out of it.

1987 Mitsubishi pickup. 160,000 miles on it. Freshened up the engine at 130,000 miles. I did it all myself.

1993 Mazda MPV. 150,000 miles on it.

I think many in the carindustry has shot themselves in the foot by making cars more and more
difficult to maintain by others than their own dealership, worst I seen is the Audi A2, luckily this monstrosity was killed off.
http://en.wikipedia.org/wiki/Audi_A2

[Edited 2008-11-16 01:16:20]
From New Yorqatar to Califarbia...
 
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ManuCH
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RE: Why Have Auto Sales Collapsed In US, EU, Japan?

Sun Nov 16, 2008 5:27 pm



Quoting Cadet57 (Reply 20):
Myself, and both my parents. I went from 20-30 hours a week to 10. My father used to get about 10-12 hours of over time a week on top of a 40 hr week, he's down to maybe 2-3 hours of o/t.



Quoting CPDC10-30 (Reply 29):
I managed to withdraw my savings from and Icelandic bank two weeks before they went bust, and now have a pay cut at work.

I'm very sorry to hear this. At this point I guess we're just very lucky in Switzerland (at least for now)...
Never trust a statistic you didn't fake yourself
 
centrair
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RE: Why Have Auto Sales Collapsed In US, EU, Japan?

Mon Nov 17, 2008 3:29 am

Japan Car industy.

Domestic market has slowed for several reasons.
Though there is an economic downturn, Japanese are not big debt builders on a personal level. (Government is different). Japanese can buy new cars and they are. My office has 16 people, 3 have bought new cars this year.

What has changed?
The younger generations are not moving back to the country where they came from. They are settling in cities and instead of buying cars, they are buying bikes, computers and traveling.

They take trains and buses. They have a very different outlook on having a car compared to their parents. Ask any 40 or 50 year old about owning a car and dating. They will tell you that when they were young, no car...no date. Today it doesn't really matter. Even my sister-in-law who is a very material person, has gone on dates using the train and bus. She is just fine with it.

So younger people are not buying cars.
What about young families?
They are buying only 1 car per house as the house became more important. The husbands are taking mass transit and having their wives meet them at the station or they are walking.

My father-in-law had two nice cars. He sold both and replaced one with a Rav4 (2007) and the other with a mini-truck for use in their fields. The RAV is driven by my mother-in-law and the truck sits around. Dad walks to the train station and goes to work that way.

My wife and I have already decided that if we move to Nagoya this spring we will sell our Rav4 (2000) and just keep the Daihatsu Latte which gets 20km to the liter.

This is a common trend in Japan. Will it change? Who knows that is why the Japanese are trying new things and investing heavily in R&D (more than any sales).
Yes...I am not a KIX fan. Let's Japanese Aviation!
 
Dougloid
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RE: Why Have Auto Sales Collapsed In US, EU, Japan

Mon Nov 17, 2008 5:17 am



Quoting Alessandro (Reply 30):
I think many in the carindustry has shot themselves in the foot by making cars more and more
difficult to maintain by others than their own dealership, worst I seen is the Audi A2, luckily this monstrosity was killed off

I wouldn't think you're far wrong Allesandro. Field maintainability has always been problematical at least partly because of the compartmentalization of various engineering and design work groups who don't talk to each other. I can remember one Chevrolet that the engine had to be jacked up to change one of the spark plugs. The other thing it would do was bind the center link when the throttle was trounced on because the engine mounts were so soft.

That is probably why I like my pickup. It's simple, easy to work on, economical and relatively uncomplicated. I've also got a pretty good stash of spare parts. I had to replace everything on the exhaust system except the catalytic converter recently and it took about 2-1/2 hours from start to finish. I didn't like the price for the parts though.
If you believe in coincidence, you haven't looked close enough-Joe Leaphorn
 
Alessandro
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RE: Why Have Auto Sales Collapsed In US, EU, Japan?

Mon Nov 17, 2008 4:26 pm

Poor design is one thing, deliberatly trying to stop owners and independent shops to do work is another. Change of lightbulbs is such thing.
Well, enough cars around anyway, so people will stick to 2nd hand cars for a while longer.
From New Yorqatar to Califarbia...
 
Dougloid
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RE: Why Have Auto Sales Collapsed In US, EU, Japan

Mon Nov 17, 2008 5:52 pm



Quoting Alessandro (Reply 34):
Well, enough cars around anyway, so people will stick to 2nd hand cars for a while longer.

That's right, folks. There is no shortage of good serviceable automobiles and trucks available that maybe need a little work here and there. Fact is, I nearly bought another pickup here a couple weeks ago, it was an early eighties 3/4 ton Chevrolet, very little rust, and the asking price was $900. All it really needed was new rubber. The 350 kind of put me off, though, they're kind of thirsty.

I think that the business for auto parts stores, wrecking yards, and repair shops might be a bright spot in this season.

What I'm really looking for is a late fifties/early sixties Ford or Chevrolet pickup with an inline six and a four speed trans. That would be really sweet. Or a nice Volvo PV544.


 Smile
If you believe in coincidence, you haven't looked close enough-Joe Leaphorn
 
na
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RE: Why Have Auto Sales Collapsed In US, EU, Japan

Mon Nov 17, 2008 6:16 pm



Quoting Rabenschlag (Reply 16):
In Germany, I think part of the equation is that the income of joe average has been stagnating since 5 years or so (in fact, many people make less money when adjusted for inflation).

At the same time, the cost of buying and maintaining cars has increased disproportionately.

In Germany, a Saturn (Opel) Astra (1.8 Ecotec 5 dr.) costs app. 20.000 $ before taxes and app. 24.500 $ after taxes.

In the US, it's 16.000 before taxes and perhaps 17.500 after taxes depending on where you live.

At the same time, the averave income of regularly employed workers (blue collar) in Germany in 2006 was about 27.000 $ / year after taxes including retirement plan and health insurance for the whole family. So it almost takes one year's income to buy an entry level car.

 checkmark 
But that not only applies to blue collar workers but also for the majority of other employees and relatively ordinary people. In the last 4 1/2 years as employee in the lower management with an individually fixed income I havent seen a payrise. Mid and even more so higher Managerment income (so the people who "need" it least) has risen about three times as fast over the past decade here while they were preaching their employees should wait until "we have a steady boom".

In Germany many car sales are company car sales, especially in the middle class and luxury class market, were more than 50% are company cars.

I wanted to buy a new car this year or early next year, but will not do so anymore. Some of my clients are from the car industry, and projects have now been stopped, cancelled or postponed. My business has gone down considerably since summer. If the car industry doesnt give me an order, I wont order a car. From their side its a full braking at he moment, I have hardly a chance than react accordingly as a new car is not something I really need now. That can wait two or three years still. Its as simple as that.
 
prebennorholm
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RE: Why Have Auto Sales Collapsed In US, EU, Japan?

Tue Nov 18, 2008 9:35 pm



Quoting Derico (Thread starter):
What is shocking is that similar numbers, drops of 30% in the US, 40% in Spain, 25% in Great Britain, etc, are now commonplace month to month. Given that these countries have superior disposable income than Argentina and certainly deeper and more competitive credit market and financing capabiities for consumers, what explains such severe drops in car sales?

In not so rich countries:

Cars tend to go out of business when they break down due to age and it is not feasible any longer to repair. When it breaks down you must have a new car. You may find a good used car, fine, but then there is one less used car on the market and someone else must buy a new car. So car sales drop "only" because some people cannot any longer afford to have a car = moderate cars sales drop.

In richer countries:

You buy a new car when you see something which is more fancy than what you have. A lot of people buy used cars because the supply of good used cars is enormous and prices are cheap caused by the enormous supply. When dark clouds show up, then a lot of people will think: Let's put new tires on that 2-3 years old car and keep it one year more, it will still be as good as new. Those buying used cars will eat a little into the enormous stockpile.

Recently for a lot of people a new car was a matter of "collect and sign for a monthly drain on the bank account". It's a little more tricky today. Leasing companies don't any longer have several banks competing on loading cheap money on them. For private financing, now questions are asked: "Sure to have a job next year? How much has the value of your house dropped? Etc."

Here in Europe the big change will probably be that the flow of good used cars from western to eastern Europe will shrink, and maybe prices of used cars will go from dirt cheap to a little more sensible.

The end result in the richer countries is an enormous drop in new cars sales, which will affect nobody except the car producers.
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