That’s according to an industry report that showed a sharp decline in auto sales across all auto makers—see table. Meanwhile industry inventories have been climbing up from an average of 55 days back in April of 2015 to 70 days last month.
Coming after months of sluggish sales and generous incentives, the big drop in April sales could be a sign of an impending collapse which could parallel that of 2008-9.
There’s a compelling reason for that: pent down demand, which for years has been “stealing” sales from the future.
Now the future has arrived and pent down demand is bad for auto makers, their investors and the economy as a whole.
The only thing that could possible turn this around would be massive Tax cut in September. If that does not happen, I expect a huge drop off in the Fall.
Selling something you don’t own (if stock goes up- you will lose money because you need to buy back the stock in the future to recover what you sold off)- easy way to put it.
Sales are projected to be 17 million units in the US this year. That’s something like the 4th or 5th best year ever. Yes sales just may be weaker than last year but by many measures it will be a pretty good year. And yet the talk is of looming disaster.
Trouble would really happen with us sales of around 14 million units or less. But were not there yet.
We are in a sorry state of economy if 18% drop can do one of them in, I know it’s a huge drop that hopefully not happening, but pretty much depicts how shaky everything is at the moment. FCA is and was one for decades to be failing and probably will anyway.
