Thursday, April 09, 2009

Believe it or not, I looked...

At a new car today.  And if this graph is any indication I won't be the only one soon.  We're postponing car purchases like never before.

[Click to enlarge]

This graph shows the total number of registered vehicles in the U.S. divided by the sales rate - and gives a turnover ratio for the U.S. fleet (this doesn't tell you the age of the fleet).

Currently this ratio is at 26.8 years, the highest ever. This is an unsustainable level (I doubt most vehicles will last 27 years!), and the ratio will probably decline over the next few years. This could happen with vehicles being removed from the fleet, but more likely because of a sales increase.

This suggests vehicle sales are much nearer the bottom than the top, and there will probably be some sort of modest rebound later this year.  [More]
I'm not so sure it will happen that fast.  But when it does, the demand will easily outstrip inventory.  We are in the process of scaling back supply curves in numerous industries. To be sure, forecasts do not point to a robust recovery, but if it is even slightly stronger than we expect....

1 comment:

Anonymous said...

took delivery on monday--$10,000 less than last july for same model -options--there are buys available-regards-