Fasten Those Seatbelts

Did you hear those loud thuds? That was the sound of car sales hitting the wall in September and October. It’s the first week of November, and sales don’t look great this month, either. It’s amusing hearing people blaming the slowdown on pre-election jitters. Once it’s over, they say, everything will be great again.

By the time you read this, the election will be over. I’m willing to bet sales didn’t spike up. Hey, I’ve been calling this sales dip for nearly a year now. Now analysts and manufacturers are beginning to accept that the market is reaching saturation. Kelley Blue Book warned 2016 sales will fall short of 2015 levels, and Ford reluctantly admitted U.S. sales are off 10%.

I’ve also warned since May that used-car values were going to take a hit in the fourth quarter. Now many dealers are up to their necks in inventory they should have turned for a short loss. Of course, your pre-owned manager swears he can sell his way out of it.

General Motors took the first hit. And it has been doing some fancy footwork ever since, transferring its losses to dealers as a glut of over-residualized off-lease and fleet units return to the market. Now Ford, Toyota, and Fiat Chrysler are facing the same dilemma.

Read the whole article here on F&I and Showroom.

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