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Auto industry faces “Unprecedented Buyer’s Strike”: Morgan Stanley
After five months in a row of year-over-year declines in auto sales, and therefore after five months in a row of sales that fell below already lowered expectations, the big guns on Wall Street are now seeing the writing on the wall, and are trying to come to grips with it.
“A stretched auto consumer, falling used [vehicle] prices, and technological obsolescence of current cars are ingredients for an unprecedented buyer’s strike,” wrote Morgan Stanley’s auto analyst Adam Jonas in a note to clients.
Volkswagen bought back hundreds of thousands of emissions-cheating cars. We just discovered what it has done with them all…
As Bloomberg reports, the German automaker agreed last year to buy back about 500,000 diesels that it rigged to pass U.S. emissions tests if it can’t figure out a way to fix them. Except for a handful of 2015 models, VW dealers can’t sell the cars until – and unless – the company comes up with repairs to satisfy regulators. The question they face then is – what to do with the hundreds of thousands of diesel cars it is being forced to buy back?
Well, now we know… the company is hauling them to storage lots across America…
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The future is here: The first-ever production-ready flying car is set to be revealed in just over a week.
Slovakia-based engineering firm AeroMobil unveiled its flying-car prototype in 2014, but it was not made commercially available at the time. The company recently announced, however, that its latest model will be available for preorder this year (though there has been no word on pricing yet). This new model has not yet been revealed, but it’s set to debut at the Top Marques Monaco, known as the world’s most exclusive supercar show, on April 20.
In 2008, subprime mortgages almost single-handedly took down the entire financial system, and now a new subprime crisis is here. In recent years, the auto industry has been able to boost sales by aggressively pushing people into auto loans that they cannot afford. In particular, auto loans made to consumers with subprime credit have been accounting for an increasingly larger percentage of the market. Unfortunately, when you make loans to people that should not be getting them, eventually a lot of those loans are going to start to go bad, and that is precisely what is happening now. Meanwhile, automakers and dealers are starting to panic as sales have begun to fall and used car prices have started to crash. If you work in the auto industry, you might remember how horrible the last recession was, and this new downturn could eventually turn out to be even worse.
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H/t reader squodgy:
“Entertaining. And some! The finale reminds me of Krufts Dog Show.”
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