Are Auto Sales Ever Going To Recover? Study Shows Somber Sales Future

The New York Times reports:

When Americans scrap an old car, they traditionally replace it with a new car.

Not recently.

A new study by R.L. Polk & Company, an automotive research and marketing company based in Michigan, indicates that from July 1, 2008, through September — a period that included the cash-for-clunkers program — more than 14.8 million cars and light trucks were scrapped in the United States. During that time, new vehicle registrations were just more than 13.6 million.

The rate of scrappage generally hints at new car sales. In past years, more vehicles scrapped meant more new cars sold...

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Steve - 4/9/2010 10:06:44 AM

+1 Boost

This one study's conclusions are flawed. If I offer the nation a bundle of cash to scrap their car, and a condition of that transaction is *NOT* that you have to buy a new car, then odds are really good that at least some people will (a) prefer to replace their scrapped car with a used car, (b) some people will need the cash more than a replacement car, and (c) some people will cash in on the chance to get money for a car they didn't want anyway.

That said, 1/3 of the population in the US, Canada, and Australia are Baby Boomers, who on the leading edge are facing retirement, and on the trailing edge, are facing 50, and realizing "Holy sh*t! I haven't started saving for my retirement!" When 1/3 of your population is in saving mode, odds are pretty good they will have priorities other than a shiny new car.