Murder. No manufactur can survive punishing sales declines like that with such high fixed costs. Plus American's keep changing their mind about what they want to buy because of the fluctuating price of oil. I already have two cars, but if I was going to buy another one it sure as heck would't be a a Prius that was all the rage 6-8 months ago (causing Toyota to massively overbuild them) it would be a heavily discounted gas guzzling luxury SUV. They are being massively discounted.
I am looking for one of those big 4x4 SUVs, but worried about what dummer is going to do with gas prices ... so I sit.
Here's another definition of murder I heard on CNBC late last night:
The annualized "crush rate" in the U.S. is 12.5mn cars, but the annualized sales figures of new cars is 9.Xmn. (The U.S. market is--or was recently--geared for 16mn units annually.)
Demand has contracted violently...murderously.
Of course the not-so-brilliant analyst on Fox News was pointing to three of the biggest sales “losers” - the Hummer H3, the Dodge Durango, and the Ford Expedition.
Never mind that production of the Dodge Durango had ceased late last year, so they weren’t building any more to sell.
And the Ford Expedition has been out of production since the beginning of November as they move production from Michigan to Kentucky.... production isn’t set to restart until the end of the month. Similarly - kind of hard to sell trucks you aren’t building as fast as you did when you were building them.
Buying a gas guzzler wouldn’t be wise — just like $145 a barrel was an aberation, oil at $35 is the other extreme. Oil will eventually this year stabilize at $70 odd a barrel — translating into more expensive gas at the pumps.