I don't know if you've noticed this, but people's buying habits are not rational. You don't need to have a degree to figure it out. Just take a look at any sale and the insane way in which women fight over bridal dresses when they're cheap.
The rules of economics are constantly changing, so by the time a "guru" comes on Bloomberg and says he knows everything, there's already something he doesn't know. But everybody knows there's an ebb and flow, just like tidal waters - after excess comes rationing; after boom comes bust.
All six or seven billion of us inhabiting this planet had to tighten our belts after the subprime crisis struck America seven years ago. The banks loosened their grips on us eventually, which felt magnificent, especially for those of us who bought a brand new vehicle. Major companies have already exceeded the sales results they posted pre-crisis. But for how long can they keep doing that?
Nobody knows what comes after boom periods. You can draw a graph, find patterns, use Bollinger bands or 50-day averages, but it's never going to be entirely logical. People aren't logical.
What comes now, flat growth, a slow downward slope, another bust? I just think it's weird that with fuel in America being at really low levels, car sales are starting to fall for some companies.
It's happening on a global scale too. For example, Volkswagen Passenger Brand announced in the five months from January to May 2015, they managed 3% fewer sales. It seems trivial, but in the last month, the pace of decline accelerated to -6%. Remember, this is a company that was sure it was going to be No.1 in a few years and invested tens of billions.
Premium brands seem to be doing far better, but I think that's down to the success of smaller, cheaper models. For example, Mercedes posted record sales and 13% growth recently, while BMW announced a 6% delivery increase.
I don't want to be the official bean counter or doom-and-gloom guy of the car world. But there's another phenomenon I noticed: there aren't any "emerging" markets anymore.
South America was down and is only now recovering. Russia appears to be in free fall. India never fulfilled expectations and seems to be maturing. China is the major question mark in my mind because while demand continues to increase, some companies are finding they cannot compete with local manufacturers. Sooner or later though, the People's Republic will either choke itself on greenhouse gasses or run out of cheap fuel.
It's the same with electric cars too. Annual sales of plug-ins in North America are expected to reach 1.1 million by 2024. Up until recently, there were some companies that claimed they alone could sell 200k of EVs per years. How's that working out for you?
Should we be worried that the wheels of the auto industry will grind to a halt? Will there be another Obama bailout? Are they going to kill Lincoln and Buick like they did Pontiac?
I'm not worried because stability is good. Consider the fact that some automakers have 100 years of history in which time they increased sales hundreds of times. What if, by 2115, we have just two times today's sales? Wouldn't that be good enough? I think it would.
All six or seven billion of us inhabiting this planet had to tighten our belts after the subprime crisis struck America seven years ago. The banks loosened their grips on us eventually, which felt magnificent, especially for those of us who bought a brand new vehicle. Major companies have already exceeded the sales results they posted pre-crisis. But for how long can they keep doing that?
Nobody knows what comes after boom periods. You can draw a graph, find patterns, use Bollinger bands or 50-day averages, but it's never going to be entirely logical. People aren't logical.
What comes now, flat growth, a slow downward slope, another bust? I just think it's weird that with fuel in America being at really low levels, car sales are starting to fall for some companies.
It's happening on a global scale too. For example, Volkswagen Passenger Brand announced in the five months from January to May 2015, they managed 3% fewer sales. It seems trivial, but in the last month, the pace of decline accelerated to -6%. Remember, this is a company that was sure it was going to be No.1 in a few years and invested tens of billions.
Premium brands seem to be doing far better, but I think that's down to the success of smaller, cheaper models. For example, Mercedes posted record sales and 13% growth recently, while BMW announced a 6% delivery increase.
I don't want to be the official bean counter or doom-and-gloom guy of the car world. But there's another phenomenon I noticed: there aren't any "emerging" markets anymore.
South America was down and is only now recovering. Russia appears to be in free fall. India never fulfilled expectations and seems to be maturing. China is the major question mark in my mind because while demand continues to increase, some companies are finding they cannot compete with local manufacturers. Sooner or later though, the People's Republic will either choke itself on greenhouse gasses or run out of cheap fuel.
It's the same with electric cars too. Annual sales of plug-ins in North America are expected to reach 1.1 million by 2024. Up until recently, there were some companies that claimed they alone could sell 200k of EVs per years. How's that working out for you?
Should we be worried that the wheels of the auto industry will grind to a halt? Will there be another Obama bailout? Are they going to kill Lincoln and Buick like they did Pontiac?
I'm not worried because stability is good. Consider the fact that some automakers have 100 years of history in which time they increased sales hundreds of times. What if, by 2115, we have just two times today's sales? Wouldn't that be good enough? I think it would.
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