Ford, Chrysler Sales Disappoint as Cars Plunge Despite Discounts
Automakers’ U.S. sales trailed estimates, with Ford Motor Co. and Fiat Chrysler Automobiles NV reporting the biggest declines, as heavy incentive spending failed to keep struggling sedan and compact models from plunging. Shares fell.
Deliveries slumped 7.2 percent at Ford and 4.6 percent at Fiat Chrysler last month. General Motors Co. sales climbed 1.6 percent, a smaller gain than analysts projected, while Honda Motor Co. reported a surprise drop.
The results cast doubt on expectations that industrywide U.S. auto sales would bounce back following declines in the first two months of the year...
“Sales are under forecast, and there were a lot of incentives during the month,” Michelle Krebs, an analyst with Autotrader.com, said by phone. “Before long, we will see more production cuts.”...
https://www.bloomberg.com/news/articles ... cord-civic
USED MARKET UPDATE
In a reversal of what typically occurs in February, wholesale prices of used vehicles up to
eight years old fell substantially last month, dropping 1.6% compared to January. The
drop was counter to the 1% increase expected for the month and marked just the
second time in the past 20 years prices fell in February (last years’ scant 0.2% being the
NADA Used Car Guide’s seasonally adjusted used vehicle price index fell for the eighth
straight month, declining 3.8% from January to 110.1. The drop was by far the worst
recorded for any month since November 2008 as the result of a recession-related 5.6%
tumble. February’s index figure was also 8% below February 2016’s 119.4 result and
marked the index’s lowest level since September
http://img03.en25.com/Web/NADAUCG/%7B83 ... 201703.pdf
Some analysts now project rather dramatic future deflation in vehicle prices:
How much Morgan Stanley thinks used-car prices will crater — in one chart
...Here’s great news if you’re looking to buy a used car — or a reason to move fast if you’re selling one.
Prices for previously owned vehicles will decline by 20% over the next four years, and they might plunge by as much as 50%, according to Morgan Stanley’s projections.
The big bank has put out the chart below, saying the 20% decline is the most likely scenario...
http://www.marketwatch.com/story/how-mu ... 2017-04-03
Which may have substantial effects on the larger economy :
Here’s why it’s getting harder to ignore rising subprime auto defaults
...Subprime auto-loan default rates match those seen just before the 2007-2009 recession. It’s a red flag that’s been flapping for some time for analysts worried it could pose risks to the broader credit market, bank health and, ultimately, the consumer-driven economy...
http://www.marketwatch.com/story/heres- ... 2017-03-30
Who could have guessed this was coming...