Has the auto market finally bottomed out?

[SVT666]

Has the auto market finally bottomed out?

The U.S. new car market was down 37 percent in January, but several automakers are optimistic that sales have finally hit rock bottom. In fact, a few even think the market has stabilized, with sales increases just a few months away.

New car sales totaled just 656,976 units in January, translating to a seasonally adjusted annual selling rate (SAAR) of 9.57 million vehicles. That?s well below the traditional 14 million to 17 million SAAR automakers have become accustom to, but there could be signs that the auto market is bottoming out.

During the month of January sales declined 48.9 percent for General Motors, 54.8 percent for Chrysler and 40.3 percent for Ford, but those hefty losses also include fleet sales. Both GM and Chrysler cut their fleet sales by 80 percent, with Ford reducing fleet sales by 65 percent. Those fleet sale cuts were factored in to the automaker?s overall January sales, resulting in the massive losses.

?The retail market was pretty steady over the last three months of 2008 and it appeared to remain so in January,? George Pipas, Ford?s sales analyst, told the Detroit Free Press. ?Lower fleet sales account for almost all of the decline from December to January.? Ford?s share of the retail market was actually up to 12.7 percent in January, a 0.3 percent increase over January 2008.

Industry experts expect fleet sales to total 3.55 million units in 2009, down 1.3 million vehicle from a year earlier.
It remains to be seen if January was truly the bottom for auto sales, but there appears to be at least a little movement in the upward direction. GM?s GMAC financial arm financed 5,000 vehicles in January, up from zero in December. Automakers are also hopeful that the government?s bailout of the financial sector will finally free up some credit, although many buyers are still finding it hard to secure a lender.

[Tave]

At this point, I think it's going to depend on what happens with the rest of the economy.

[FoMoJo]

Let's hope so.

We'll know in a couple of months.

[Payman]

Not too optimistic about it. People are hanging on to their cars longer.

[Onslaught]

God I hope so. Working or I should say lack of working on cars these days sucks a big one.

[the Teuton]

God I hope so. Working or I should say lack of working on cars these days sucks a big one.

At the Bimmer dealership, there were always high end cars in the body shop from RS4s to M3s.  You're really seeing that big of a downturn in business?

Admittedly, people are driving a little less, but accidents still happen.  Where do people go if not to you?

[Soup DeVille]

At the Bimmer dealership, there were always high end cars in the body shop from RS4s to M3s.  You're really seeing that big of a downturn in business?

Admittedly, people are driving a little less, but accidents still happen.  Where do people go if not to you?

A lot of accidents don't really disable the car. They just pocket the insurance money and do the best duct tape job they can for less than $5.

[NomisR]

God I hope so. Working or I should say lack of working on cars these days sucks a big one.

I was hearing mechanic's business is actually booming.  I know mine is.  But maybe people aren't taking them to dealers as much because they charge more?

[Onslaught]

At the Bimmer dealership, there were always high end cars in the body shop from RS4s to M3s.  You're really seeing that big of a downturn in business?

Admittedly, people are driving a little less, but accidents still happen.  Where do people go if not to you?

I've not worked on a car in over 2 weeks. I turned 150 hours most weeks before the shit hit the fan and lately it's been 20 at best. So yes, it's a downturn!
The BMW, Benz place in town has work and they want to hire me sometime soon. But I'm hoping that things turn around so I won't have to move. I'm not really wanting to work on those cars unless I have to. People are holding on to the insurance money unless the car isn't road worthy. I see smashed up cars all over the road these days that people don't get fixed.

And the "people are keeping their old cars story" isn't helping us. When a old car gets hit it normally totals.

[the Teuton]

Sorry to hear that.  Lux car shops like that will have business just because it's the nature of the beast.  People have money, and they're usually a bit more financially savvy.  They also think because it's a Benz or BMW dealer, they service is remarkably better.  It's not.  I know.

But reputation sells.

Good luck, Mr. Onslaught.

[Onslaught]

Sorry to hear that.  Lux car shops like that will have business just because it's the nature of the beast.  People have money, and they're usually a bit more financially savvy.  They also think because it's a Benz or BMW dealer, they service is remarkably better.  It's not.  I know.

But reputation sells.

Good luck, Mr. Onslaught.

They also think if you work on a BMW or Benz you make more money. But you don't.
That's one of the reasons I've never wanted to work on them all that much.

[3.0L V6]

The US auto market could not sustain sales of 17 million vehicles per year indefinitely. Automakers lost big profits trying to keep the metal moving (incentives and the like) and saturated the market. The demand was quenched some time ago, and no incentive or deal can change that. The freezing of the credit market just was the tipping point. Without the fancy 0% interest rate or 72 month loan, sales collapsed.

The irony is that vehicles last a whole lot longer now, so they'll go longer before they need to be replaced.

So, no, I don't see demand recovering much.

[S204STi]

I was hearing mechanic's business is actually booming.  I know mine is.  But maybe people aren't taking them to dealers as much because they charge more?

It's a double edged sword with dealers.  We rely on new car sales to create new customers.  So, if sales of new cars drop, if you don't already have a strong customer base, you're screwed.  In the case of the couple thousand dealers that will close this year it will be because they have 40% or more of the ROs based on warranty pay, and of course that is going to plummet like a lead balloon with no new car sales.

[YO]

what are you talking about. You do make more money

They also think if you work on a BMW or Benz you make more money. But you don't.
That's one of the reasons I've never wanted to work on them all that much.

[Onslaught]

what are you talking about. You do make more money

You get paid the same doing bodywork on a Mazda as you do working on a BMW.
$42.00 an hour is $42.00 an hour regardless of the make of the car.

We get $2 more an hour at my Ford shop then the guys and the Benz place actually. Another reason I'm not too sure I want to change.

[Soup DeVille]

I've not worked on a car in over 2 weeks. I turned 150 hours most weeks before the shit hit the fan and lately it's been 20 at best. So yes, it's a downturn!
The BMW, Benz place in town has work and they want to hire me sometime soon. But I'm hoping that things turn around so I won't have to move. I'm not really wanting to work on those cars unless I have to. People are holding on to the insurance money unless the car isn't road worthy. I see smashed up cars all over the road these days that people don't get fixed.

And the "people are keeping their old cars story" isn't helping us. When a old car gets hit it normally totals.

Why do I then still have so much trouble finding someone to weld up the hole sin mah Caddy?

[GoCougs]

I think it could go further - and actually stay there.

Watch what happens when leases are gone and the typical loans are 50% down, 24 months and 10% rate like it should have been all along...

[Onslaught]

I think it could go further - and actually stay there.

Watch what happens when leases are gone and the typical loans are 50% down, 24 months and 10% rate like it should have been all along...

I think the bottom isn't in sight yet.

[S204STi]

I turned 150 hours most weeks before the shit hit the fan ...

Wow... I've been on the wrong side of the car business!

[Rupert]

150 billed hours? Must be, because there aren't that many hours in a week, if you want a weekend...

[Onslaught]

150 billed hours? Must be, because there aren't that many hours in a week, if you want a weekend...

Yes, billed hours. I didn't do it every week but most of the time it was 120 or so and up. But I work a little faster and way harder then all the other guys.
I don't stop for breaks or have an hour lunch or anything. I figure if I've got to be at that hell hole I should make all the money humanly possible.

I also didn't run all the hours I turned in a week so that the tax man wouldn't bend me over and have his way with my anus. But I've used up all my money
that they owed me from that getting through these slow times.

Anyway, enough about me. Like I said before we've not seen the bottom yet.

[r0tor]

i'll buy a car if obama wants to give me a tax break and my employer doesn't decide to strip my bonus away

[GoCougs]

i'll buy a car if obama wants to give me a tax break and my employer doesn't decide to strip my bonus away

Wait a bit, just as with the proposed $15k tax credit for buying a home, so too will come a big tax deduction to buy a car.

[r0tor]

thats the plan!!! woooo!!!! freee moneeeeiiisss

[SVT666]

Wait a bit, just as with the proposed $15k tax credit for buying a home, so too will come a big tax deduction to buy a car.

It was already announced.