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Old 07-16-2015, 01:24 PM   #1
XDCX
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Default How long will the good times last?

How long will the good times last?




There's no question that the Great Recession of 2008 - 2010 caused an immeasurable amount of pain for Dealership Owners and employees. Many lost their stores due to the OLDCO cuts issued by General Motors and Chrysler and others lost their stores due to curtailment pressures or other demands issued by their flooring source.

Those who didn't lose their stores likely saw their profits drop significantly during the tough economic times and shared the worries and sleepless nights experienced by their counterparts who were forced to shut down their stores.

In the time period after 2010, however, the retail car business in the U.S. has been pretty damn strong.

That prompts the question, how long will the good times last and what's the biggest risk looking forward for today's new or used car dealer?
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Old 07-22-2015, 07:14 AM   #2
steve_biegler
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I think the biggest risk is the rest of the economy. When some other segment screws up (banking) it causes the general public to stop buying, mostly big ticket things first. So a new car falls to the bottom of the list unless the current one dies.

So personally I think as long as housing, banking, oil, middle east, and the rest of the world continues to plug along without any big hiccup so will the dealers. Not sure how long until the hiccup comes.......If I was that smart I would buy a lottery ticket and not care anymore, HA. I am afraid that when it comes, it is going to be ugly.
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Old 08-11-2015, 04:40 PM   #3
XDCX
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Quote:
Originally Posted by steve_biegler View Post
I think the biggest risk is the rest of the economy. When some other segment screws up (banking) it causes the general public to stop buying, mostly big ticket things first. So a new car falls to the bottom of the list unless the current one dies.

So personally I think as long as housing, banking, oil, middle east, and the rest of the world continues to plug along without any big hiccup so will the dealers. Not sure how long until the hiccup comes.......If I was that smart I would buy a lottery ticket and not care anymore, HA. I am afraid that when it comes, it is going to be ugly.
I'm inclined to agree - I can't say that I see anything on the Radar Screen that looks like it will derail the good times.

It is clear that the Federal Reserve will be hiking rates, most likely before the end of the year, and that will increase car payments for buyers and flooring bills for dealers. That said, I don't think the rate increases will be huge or the effect too dramatic.

I have heard some people argue that the stock market and the housing market have recovered too fast and too far and both are set for another collapse. While I'm inclined to agree I think a minor pull-back in the stock market and housing would be healthy in the long term view.
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Old 08-11-2015, 04:52 PM   #4
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Default Decline of the Middle Class...

While I continue to be somewhat amazed at how strong new car sales have been over the past several years I do get the impression that the percentage of the U.S. population that has the ability to buy a new car has dropped over the past decade.

To be clear, I don't have any facts or figures to back up my impression - it's just a hunch I have based on what I see and what I read.

I think there has been a trend in this country toward more outsourcing and 1099 work and a huge increase in part time employment to escape the Obamacare mandate. While the U.S. economy as a whole has grown I contend the portion of the population that would qulify to buy a new car has fallen.
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