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Auto sales were a little weaker than expected in January (Toyota's massive recall was a big factor), but they are still up at a 17% annualized rate from their low of last February. With the U.S. car fleet aging steadily, a sales rate this low (by far the lowest level relative to the size of the population since records were first kept beginning in 1967) is very unlikely to be sustained for much longer, especially if the economy as a whole continues to expand. From my perspective it looks like auto sales are following their typical pattern of rebounding after the end of a recession, and could even enjoy a very strong rebound in the years to come. Even from a pessimist's standpoint, it's clear that autos stopped being a drag on the economy about one year ago.
2 comments:
Scott,
Someone forgot to tell Harley Davidson about the recovery...
Dealers are shutting down around the nation....here is an example today.
Harley riders in Shreveport are still in shock and reeling from the news they received today; the Shreveport Harley-Davidson dealership will close its doors.
"there are constraints on all dealers from the motor company that impact business. For instance approximately 365,000 motorcycles were produced last year, and that number will be cut to 212,000 in calendar year 2010.
That is approaching a 50% cut in production in just one year......fter production cuts last year. If they cut production much further, will they even be producing enough revenues to cover fixed costs?
Do you think motorcycle sales have relation to auto sales?
Sorry, a bit OT, but important.
Recent uptick in risk aversion is mainly due to a wrong communication in China. Markets were cought off guard by lack of preannoucement on tightening. But the point was quickly taken by authorities, and now we see a proposal which should smooth the further way, as inflation is the main concern.
"He Keng, a deputy director of parliament's Financial and Economic Committee, has said that the government should set an inflation target of between 3 and 5% for 2010 at next month’s National People's Congress."
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