Saturday, December 5, 2020

Tag: The Fast Track to “Carmageddon”

The Fast Track to “Carmageddon”

by Jim Rickards, DailyReckoning:
Back in the 1950s when GM had 50{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} of the auto market they always said that, “As General Motors goes, so goes the nation.”

That was obviously a tribute to GM’s economic muscle and its role as the driver of growth and rising living standards in post-war America’s booming economy. Those days are long gone for both GM and the nation. GM’s drastically reduced 20{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} market share of U.S. light vehicle sales in June was still an economic harbinger, albeit of a different sort.

GM offered a record $4,361 of cash incentives during June. That was up 7{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} from last year and represented 12{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} of its average selling price of $35,650 per vehicle, also a record. But what it had to show for this muscular marketing effort was a 5{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} decline in year-over-year sales and soaring inventories. The latter was up 46{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} from last June.