I can't link to this because I heard it last night on NBC News with Brian Williams (If I were not a lazy sot today I could probably go find it), nonetheless here it is.
Williams told us that during September new car sales were off 33% and showroom visits were down 50% over the same month last year. He then went on to say that October's numbers would be worse, and that fewer car sales meant layoff in the auto industry, which mean fewer auto workers being able to buy things, which would ripple through the economy, which is why we have to bail-out now blah blah blah....
Hold on a second, Hoss. This is certifiable bullshit; all of it.
Not the stats, the conclusion.
Economists have long lambasted Americans for putting too much on credit and not saving enough money. So now, when people have finally made the sane financial decision not to borrow the price of a new car every three to four years, it's suddenly a sign that our economy is in trouble?
What happens to this thought: instead of borrowing $25-$35 k for a new Wasabi, my family decides to keep the old clunker and start saving the money we would have been forking out for payments. Over the course of the next three years, that puts at least $15 k (allowing for repairs and emegencies) back into the credit markets.
More to the point, when did it become my fault that American automobile companies are not pursuing an effective global marketing strategy. India's Tata Nano has opened up an entirely new sub- sub- compact market that has a potential consumer based of over 70-100 million new car owners. But currently, only one European and one Asian manufacturer are gearing up to compete. American automobile companies don't even have designs on the drawing board. The same is true about penetrating the emerging automobile markets in Brazil, Argentina, South Africa, China, and (even!) Iran.
Curiously enough, American tobacco companies are not going broke, even though in every generation fewer and fewer US citizens smoke. Why? Because two decades ago they started developing global marketing strategies, not just for cigs, but for all the associated food products they sell. (Probably they knew nobody was going to bail out a tobacco company.)
I should be upset that American automobile makers are failing because of their lack of competitive strategic leadership?
I should be upset that the American consumer is finally starting to make what economists have been telling us are the most rational choices all along?
I don't think so.