Auto Sales
Auto Car Sales Going Down
One of the effects of the current economic slowdown is that there has been a significant decrease in auto sales. This has manifested itself in both a reduction of the number of auto car sales and a reduction in the number ofautos for sale. Were auto sales used as a pure measurement of economic health, particularly if the specifics of auto dealers, auto tuning, and auto repair businesses are excluded, the picture would not be favorable.
One of the primary challenges for dealers is that when they have an auto for sale, they are competing with multiple dealers, many of whom have advertised their autos sale. For a dealer to get a single auto sale, requires significantly more effort that it did in the past. As the same players fight more mercilessly for the same consumers, the challenges mount.
Of perhaps equal impact is the effect of the general economy of the consumer. With the unemployment rate a historic highs, and consumers becoming increasingly selective with their limited amount of disposable income, delaying the purchase of a new vehicle is an easy decision to make. Rather than sinking a considerable sum into a depreciating asset, many consumers are readdressing the very way in which they live and choosing to reduce debt. The car market, and in fact the entire economy, is facing a generational paradigm shift that will have an impact for the foreseeable future.
A common reaction to some of this information is to cite programs like “Cash For Clunkers,” as some evidence that the change is temporary. Most experts agree, however, that the program was successful in accelerating a certain number of sales, but not of bringing new consumers into the marketplace. If consumers bought car before they might otherwise have, there will likely be a spike in the short-term. If the program was not successfully in creating new consumers, the spike will likely have a limited duration and be followed by a significant falloff.
Overall, auto sales in the United States and globally is going through one of the most significant contractions ever seen. As the economy begins to recover, this may reverse over the longer-term, but the effects will likely linger for several years. As consumers look to make more responsible choices, treating auto as less of a disposable asset, this rebound may be slow.
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