Sunday, May 03, 2009

1.5 Automakers or Less

DETROIT -- U.S. vehicle sales turned out even worse than expected in April, muting optimism that the auto market is poised to rebound.

Auto makers blamed the high-profile troubles at General Motors Corp. and Chrysler LLC for dragging down sales last month across the industry. Chrysler sought bankruptcy protection on Thursday.

"We've been fighting all these rumors left and right and it doesn't help," GM sales chief Mark LaNeve said. "I thought we were going to close much better than we did."

Shaky consumer confidence and high unemployment levels also offset benefits of increased credit availability, deep auto discounts and U.S. government backing of warranties on GM and Chrysler vehicles.

April sales totaled 819,540 cars and light trucks, a decline of 34% from a year earlier, according to market research firm Autodata Corp. The seasonally adjusted, annualized sales pace was 9.32 million vehicles, down from March's 9.86 million rate.

Actually I expect 30-40 automakers in 5 or so years. A new golden age of rolling innovation.


TJandTheBear said...

Actually I expect 30-40 automakers in 5 or so years. A new golden age of rolling innovation.

5 years may be optimistic, but otherwise I'd agree. Highly adaptive/flexible, continuously evolving and likely made-to-order.

wagga said...

30-40 automakers, none of whom is strangled by unions & union featherbedding & union pension plans. At one time unions served an important purpose. But that was then.

Good time to examine the High-school dropout Californian correctional officer union member being paid (but not earning) $100K+.

Dave said...

Working for a multinational automotive supplier, this is truly worrying. The short term is bleak, but the longer term is solid. AsiaPac is still blasting out good numbers, owing to the increase in China sales.

TJ is right -- I expect the traditional dealer network to die a quick death, to be replaced by direct Internet sales, and JIT manufacturing. The Internet has been beating down dealers for awhile, and this is the final blow. Warranty repairs are the only hindrance, but can be overcome with a national chain of garages. Could you imagine the vast swaths of real estate destitute from such a change? Mini Detroits in every city...

wagga said...

HSDOCO = High School Drop Out Correctional Officer. Dodge the occasional shit bomb & be paid more than a hard science PhD.

A little bit mean, but a whole lot true.

sm_landlord said...

@wagga; Sad but true. Says a lot about what we value as a society.

@Dave; If the dealer networks die, that would not bother me much. I haven't been to a dealer for service in years, once I figured out that their mechanics know less about the cars than independent mechanics do. My real concern is buying parts. Ford, for example, does not sell parts for cars older than 10 years of age, and many of the parts are not available from the secondary suppliers either. Some company could probably make a good living building parts for 10+ year old Ford and especially Lincoln vehicles.

Son of Brock Landers said...

I know Mish just posted about the retired public pensioners earning over 100K annually. Would anyone ever dare float out the idea of clawback with those putzes on TV?

Rob Dawg said...

It may take a Constitutional Convention but the pension clawbacks are necessary as a matter of survival.

Lost Cause said...

wagga -- how can you bemoan the unions, "At one time unions served an important purpose. But that was then" -- yet you point out how wildly sucessful they are for the purpose for which they are established? They certainly are good for the union members making over $100k. It is true that a union job is better than a post-doc non-union job. I suggest graduate students and researchers join the American Federation of Teachers.

Sun said...

Some other visions to consider for the automotive future - global warming or not, electric cars would offer many potential advantages. Electric motors can produce very high torque eliminating the need for a transmission (those never break though). Also no need for oil, cooling system, significantly less moving parts, and likely much more modular; agree about MTO. This would of course be bad for mechanics.

Mr. Outspoken said...

The big obstacle with electronic engines is the lack of efficient, reliable and long-lasting battery power. Of courese if you have a fusion-everlasting-free-energy-battery thingy then you'll be fine, but only those fortunate few with connections can get in on those.

Sun said...

I think you noted all of the no-longer obstacle, obstacles. Lithium-ion can reliably go several hundred miles, on pennies to the dollar for energy cost. The problems...material cost, blam! Recharge time, double blam!

Putting faith in Kurzweil, costs will come down based on historical trends. Recharge / efficiency trends will hopefully follow this path. Come on invisible hand, get to work!

Northern Renter said...

Progress is being made on recharge times:

Best wishes,

Lost Cause said...

I am not buying another car unless it is a plug in.

I am the Walrus

H Simpson said...

You folks in SoCal and Az live in another planet.

Those batteries might seem fne, but they also lose 40% of power at freezing temps.

And how do you heat the car in winter? electricity gets sucked up big time trying to warm a car.
Want to be comfortable for 10% of the range, or freezing for 40% of range.

Useless for most of us in the North East.