Unless you’ve been living under a rock you know that the current climate in the domestic automaker industry is horrendous. I’ve given some thoughts on how to fix the problem within our borders, but it appears to me that something bigger is going on here. It appears that the consuming public has finally begun to reign in its spending habits.
What does this mean for the automakers? Less inventory moving off of lots and less sales of new and used cars – both of which mean less revenue. As a consumer who is off-again, on-again in the market for a new or newly used car I can tell you that it’s just not worth buying a new car right now (so long as you have other means of conveyance). I spent last month looking around used car dealer lots and I didn’t find one deal. Not ONE decent deal! Sure, I understand that the people who work at these places need to pay the bills and eat, but you would think that in a tough economic time when an entire industry to collapsing there would be some ingenuity at the local or regional levels to cut prices and sell product.
I guess not.
In fact, the price disparities between the new and used cars weren’t even that far apart. In other words, I might as well have purchased a brand new car because I’d only be spending a few thousand more for it and I’d be getting a brand new machine with top of the line features. Oh, that reminds me – the feature packages are too expensive on new cars. Consumers know that you can get a great sound system installed in a car for a few hundred bucks (I said great sound system – not the type of system where you can take your car to a show a win awards). So when you see automakers adding $800 – $1,200 for such an upgrade, why would you purchase that upgrade? Add up a bunch of those large-scale “nickel and dime” pieces and you find yourself wondering why you’d buy a car from that dealer in the first place.
Now add all of this to the fact that American automakers have a reputation for shoddy workmanship while comparatively priced foreign cars have a reputation for lasting forever and American consumers have an easy choice to make. In this case, consumers aren’t even making a proactive choice to buy one car or another – they’re just not going out to purchase new vehicles period. But when they do one has to wonder how long they will continue to buy an overpriced, inferior, and out of date product.
You know, the real bargain on cars was about 2-3 months ago when the gas crisis was still headlining the news. People were looking to dump their SUV’s for literally pennies on the dollar. I know that in Georgia and Tennessee even the dealerships, used and new, were issuing rebates and savings hand over fist, practically offering the SUV’s for wholesale value, possibly even taking a loss on them.
There was a news report filed in Atlanta during August cautioning people against selling their SUV’s for so little, predicting that they’d suffer an irreversible loss and forecasting that gas would begin to fall again very soon. Remember, at that time the though of gas falling in price was the butt of every dinner party joke, one which everybody could laugh at. Now, gas in Georgia is about $1.52/gal average. It looks like the last laugh goes to those who kept their SUV’s and those who bought them for cheap.
Well, that’s a good point, Spades. I know places near Atlantic City, NJ that were trying to give away SUVs with no success. But still, I think that investing one’s scarce dollars in a hybrid or smaller, more fuel efficient automobile is still a good idea – low SUV prices be damned.
Gas prices have dropped up here in New Jersey, too, though I won’t be satisfied until we’re paying between $0.75 and $1.25 for gas. That’s the only acceptable range for me!
I read an article on CNN earlier today explaining that OPEC was going to meet after several top officials of that organization and outside investors were worried about the rapidly falling price of crude oil barrels. The current price is around $54, but the OPEC nations want to set the price at a fixed rate of $75, a 40% increase over the current costs. Their logic is that no one will invest in crude oil or any other related products with the current trend. Because they can’t dictate the market for oil without collusion, they’ll likely control the supply of oil, which goes along with recent outcries for dimished output.
Sounds like an OPEC move – but all the more reason why our country (and other countries) need to invest in and purchase fuel efficient or non-petroleum reliant vehicles.