US auto sales slump to 16-year low in July

[Scrittibear]

Sounds like the credit crunch is affecting auto loans for good folks as well....not good news.

US auto sales slump to 16-year low as automakers try to meet demand shift, lease troubles loom DETROIT (AP) -- U.S. auto sales slumped to a 16-year low in July as automakers failed to keep up with consumers' growing demand for smaller, more fuel-efficient vehicles. While production changes may help that problem, trouble in the credit and auto leasing markets will continue to take a toll on sales.General Motors, Ford, Toyota and other automakers said Friday that their U.S. sales fell by double-digits. Nissan Motor Co. was the only major automaker to report a gain, with truck sales up 18 percent thanks in part to the new Rogue crossover and a boost in incentives. Nissan's overall sales rose 8.5 percent.

US auto sales slump to 16-year low in July: Financial News - Yahoo! Finance

[TravelBliss]

Totally NOT surprised.

[Scrittibear]

So which American Car manufacturer is going to come out of this mess the strongest? I am betting on Ford....They seems to be moving in a much more fuel efficient direction aggressively - even more so than Chevy....your thoughts?

[qbee42]

I don't see this as a "credit crunch" issue. There is a leasing issue, which in short is a problem because big SUVs and trucks have devalued significantly. The leasing companies are taking it in the ear on the lowered residual value. It has nothing directly to do with credit, and everything to do with the market shift to smaller, more fuel efficient vehicles.

Tom

[rfruth]

Its a credit crunch and a leasing issue, poor decisions have been made and money is tight

[diversified]

This reminds me of the late 1970s and the early 1980s when Detroit tried to scale their cars down like the Lincoln Versailles, Cadillac Cimmaron, Cadillac 4-6-8 engine. I still remember the Buick Riviera next door with the extension cord from the house to the diesel engine in the driveway. Unfortunately, Detroit couldn't play catchup to the cars wanted by the public due to that era of gas shortages and the foreign car manufacturers took over. If history repeats itself, it does not look good for Detroit.

[chogan2]

Golly, I agree with all of the above. It's a perfect storm of restricting credit to the credit-worthy, fuel-inefficient product lines, half-baked attempts to make up ground where the basic engineering isn't there, and a general slump in all vehicle sales brought on by near-recession conditions. I agree that Ford is the most likely survivor, as does "The Market", as Ford's market capitalization (total value of outstanding stock) exceeds GM's, despite substantially higher total sales GM. GM's a good candidate for bankruptcy if current trends continue, hence the low stock market valuation.

[cwerdna]

Originally Posted by qbee42

I don't see this as a "credit crunch" issue. There is a leasing issue, which in short is a problem because big SUVs and trucks have devalued significantly. The leasing companies are taking it in the ear on the lowered residual value. It has nothing directly to do with credit, and everything to do with the market shift to smaller, more fuel efficient vehicles.

Tom

I don't totally agree. Unless you've been living under a rock, there's been a been a virtual implosion amongst banks and financials (think IndyMac, Fannie Mae, Bear Stearns, Countrywide), partly due to the housing crisis and write downs and unknown values of sub-prime mortgages going to people who shouldn't have received loans in the first place. Notice that the FDIC has closed a # of banks this year per FDIC: Failed Bank List.

Hence, I'm sure lenders are MUCH more cautious about who they give car loans to now and will give very high interest rates or no loans at all to those w/bad credit.

Notice the quote "Mark LaNeve, GM's vice president of North American sales, said tightening standards for buyers with poor credit are costing the automaker sales of about 10,000 vehicles per month"?

July Car Sales: Worst Since the Early 1990's Recession - Auto Observer has some more info about July's auto sales.