Uncertainty Will Probably Spike Car Sales This Month

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1st Gear: Why Oh Why Would You Be Uncertain?


For some reason, Americans are slightly uneasy about their future and maybe not as willing to buy a new car as they were say, oh, a month or a year ago. I wonder what it could be.

Seriously, though, per The Detroit News the expectation is that sales will be down as much as 4.4%

“Labor Day sales clearly pulled ahead from September volume and resulted in a lackluster month,” said Jesse Toprak, senior analyst for TrueCar.com, which estimated the 4.4 percent sales drop, in a statement. “The uncertainty in the financial markets also finally caught up with auto sales, causing some hesitation for big-ticket item purchases. Nevertheless, the fundamental drivers for the market demand are strong and we should have no problems reaching 15.7 million unit sales this year.”


Part of this is also due to the fact that some of the sales from the big Labor Day weekend landed in August and there are two less "selling days" in September this year.

2nd Gear: Chrysler Up 1%!


Chrysler managed to hold on to its streak of up months with a 1% year-over-year increase, according to Automotive News, thanks to an 8% increase at RAM, 3% at Dodge, and 2% at Chrysler.

Fiat was down 24% and Jeep was down 5%.

By this point, they'd thought the new Jeep Cherokee would be for sale so that they had any sort of increase is probably a good sign.


3rd Gear: GM Is Also Moving Those Trucks


The newer Silverado and Sierra may not be the most exciting trucks ever built, but GM fans are lining up to replace them at such a high rate that one of the suppliers can't keep up with the demand says Bloomberg.

As the article points out, each new truck is an $8,000 to $10,000 profit for the automaker, and with a new Ford F-150 coming out next year now is the time for GMC and Chevy to collecting as many truck buyers as possible.


The issue appears to be with the popular 5.3-liter V8, which produces a lot of power and much improved fuel economy.

4th Gear: At Least We're Not Europe


Europeans aren't buying cars and now, even older professionals who could buy a car are now holding off or buying motorbikes or whatever.

If you want an insight into how Europeans feel and what the future of Europe is, read this Wall Street Journal report.

Some industry executives and consultants warn that Europe's economic crisis isn't just sparking a temporary downturn in car sales, but is also accelerating a more fundamental decline in consumer appetite for cars—a decline that may presage more plant closings, job cuts and economic pain well into a broader recovery.


It's possible that with an improvement in the European economy buyers will start buying cars again. Or they won't. Ever again.

5th Gear: The Curious Case Of Unions In Non-Union States


I should warn everyone that this Bloomberg column is written by an analyst at the Heritage Foundation and so you can chalk up all of it to a big business, heartless conservative, anti-union bias.

But if you move past that expectation, there's an interesting angle that I think is worth considering in the whole UAW/VW in Tennessee drama.


German law requires “works councils” in which management and labor groups meet to collaboratively sort out workplace issues. Consequently, there is a works council at every Volkswagen plant — except the one in Chattanooga. Now, under pressure from IG Metall, the German union, Volkswagen AG (VOW)’s headquarters has decided it wants a works council in the U.S., too.

But there’s a hitch. U.S. labor laws prohibit companies from discussing working conditions with employee representatives — unless they belong to outside unions. In the 1930s, Congress feared businesses would create bogus “company unions” to keep union organizers at bay, so it banned “management-dominated” labor organizations.

This outlaws even innocuous employee-involvement programs.

While I think asking for a reform of this law is possibly a delaying tactic, this is another law that at least requires some review.


Reverse: This Baby Has Everything…

On October 1, 1908, the first production Model T Ford is completed at the company's Piquette Avenue plant in Detroit. Between 1908 and 1927, Ford would build some 15 million Model T cars. It was the longest production run of any automobile model in history until the Volkswagen Beetle surpassed it in 1972.



Neutral: Is The Government Shutdown Impacting You? Your Buying Habits? Are you going to ignore this or are you going to let it change your behavior?


Photo Credit: AP Images

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