Bloomberg Writes: American Auto Sales Seen at Annual 16 Million With Profit
The U.S. auto market is poised for a fifth straight year of growth for just the second time since World War II. The recovery from the recession has been so robust that the debate is now whether sales will reach 2000’s record levels — and whether that would even be a good thing.
Deliveries of new cars and light trucks may rise to 16.1 million next year, the average estimate of 13 analysts in a survey by Bloomberg News. That’s about 500,000 more vehicles than automakers are on pace to sell this year and while it’s within reach of 2007’s 16.15 million, it’s well short of the 17.4 million peak.
Since the annualized pace of auto deliveries in August exceeded 16 million for the first time in six years, analysts have been looking back at the last time sales were so brisk. Six years ago, while sales were still above 16 million, Detroit was losing billions, saddled with high costs and poor cars.
“It’s not just the number 16 that’s amazing,” George Magliano, chief economist for IHS Automotive, said by telephone. “It’s the fact that it’s coming effortlessly. We’re not dumping cars and trucks into the fleets. We’re not using humungous incentives to move them. It’s a reflection of people’s willingness to buy and the strength of the product out there.”
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Listen, I don’t know why this was so difficult to understand. All improvements in the US Economy over the last 5 years were caused by a massive infusion of credit and money supply at ridiculously low interest rate. Nothing else. The recovery is an artificial one and is coming to an end.
It is not different for auto sales. As a matter of fact, today it easier to get an auto loan than to get a doctor’s appointment. I am once again hearing things like, “If you got a pulse, you will get an auto loan”. Well, that’s great, but didn’t we already see this in the real estate sector just 7 years ago. We all know how that ended.
It’s essentially the same situation with car sales. The recovery from the recession has NOT been robust as the article states. This is a simple matter of a Financial bubble that the FED has once again blown. It is massive and it will blow up. When it does, car sales will collapse along with everything else.
It will be great to be a used (excuse me, “pre-owned”) car buyer over the next few years with all of the repossessions that are surely to flood the market.
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