Saturday, August 29, 2009

Post Clunker auto economics

The good news is that there were about 700,000 new car and truck sales in the dealerships across America for the 'cash for clunkers' deal that recently just expired. In true car dealership fashion, the program had an extremely abrupt ending as the program was pulled last week.

The question is... what now? Will the auto industry pick up steam now that the program is over and all those vehicles were sold? What motivating factors will come into play to inspire people to buy new vehicles? I've said many times in this blog that the 'average' Joe Citizen would want a new vehicle but doesn't make enough to afford one. The cost to keep up with the latest model SUV or family car has risen fairly dramatically for domestic vehicles in the past few years, and way out of proportion to what salaries have risen.

It will be interesting to see what happens in the next 6 months in the auto industry. Are the worst of times over, or have they just been patched up a little?

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