The government and the financial media continue to tell us that we are not in a recession and the bottom is just around the corner.
Yet, the ‘real’ numbers continue to show that perhaps we are just at the beginning of a very deep recession that will last for a long time.
In a Reuters story yesterday, the auto sales continue in freefall in September, suggesting one in five car dealerships could fail by the end of this year.
"As many as 3,800 U.S. car dealerships could fail this fall and into 2009 -- nearly one in five -- because of weak sales, increased operational costs and the credit crunch, according to a forecast released on Wednesday. "An increasing number of dealers are simply closing their doors because sales have plummeted, credit has dried up, the overall retail environment is increasingly challenging and potential investors are sitting on the sidelines," said Paul Melville, a partner with Grant Thornton LLP, which issued the forecast."
Auto Sales have continued to drop over the last 11 months, slipping to the lowest level in seven years.
- Ford Motor posted a 34% drop. Their truck and van sales fell 39%, SUV sales plummeted 57% and F-series truck sales dropped 42%.
- Honda reported a 24% decline in sales;
- Toyota U.S. Sept. sales drop 32.3%, light truck sales dropped 38%
- Lexus sales -- Toyota's luxury nameplate -- fell 37.7%;
- Chrysler U.S. September sales fall 33%
- Volvo sales slumped 51.8%;
- Porsche tumbled 45%;
- General Motors sales down 15.6% (better than the expectations of -26%)
- Nissan Sales down 37%
- BMW U.S. sales dropped 25.8%
- Mercedes-Benz reported sales off -16.4%
- Volkswagen sales for September fell 9.4%;
- Hyundai Motor's U.S. sales fell 25%;
- Kia U.S. sales slide 27.8%
- Audi U.S. sales are down 5.4% (but they are a low volume marquee, selling 7, 584 units, vs small Korean mfr KIA, which sold 17,383)
The inflated mortgage industry was the cause of much of the economy growth over the past decade and now that it is crumbling, major sectors of the economy are coming down with it. The problem in the auto industry may persist for the next few years, as it could take that long for everyone to pay for the cars that they already own and they need to save money for their next one, now that borrowing from their homes is no longer an option.
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