Used Truck Trade-In Values Plunge, Deepening Auto-Sales Decline

from Bloomberg:



Used Truck Trade-In Values Plunge, Deepening Auto-Sales Decline

By Greg Bensinger

June 21 (Bloomberg) -- Plunging prices for used pickups and sport-utility vehicles are deepening U.S. automakers' sales slide, with Ford Motor Co. the latest company to feel the pinch.

Gasoline near $4 a gallon helped send prices for used large pickups and SUVs tumbling at least 21 percent in May, Atlanta- based Manheim Consulting estimates. That cuts trade-in values, pushing light-truck sales down 16 percent in 2008, compared with less than 1 percent for cars.

``Regular consumers don't need larger SUVs or pickups; it's a lifestyle choice,'' Standard & Poor's equity analyst Efraim Levy in New York said in an interview. ``If it's getting to be a bad investment, it's not worth buying a new one right now.''

Detroit automakers including Ford are vulnerable to the drop in pickup and SUV sales. The U.S.-based companies depend on those models for almost 70 percent of their sales and a greater share of profits than Asian competitors such as Honda Motor Co.

Industrywide sales declines led by trucks helped spur Ford's forecast yesterday for a wider 2008 loss. The second- largest U.S. automaker said it will pare output by as much as 25 percent and delay unveiling the latest version of its top- selling vehicle, the F-Series pickup. Auto-loan unit Ford Motor Credit also will post a loss, Ford said.

June auto sales in the U.S. may drop to 12.5 million, their lowest annualized rate in 15 years, according to Citigroup analyst Itay Michaeli. That would be 20 percent below June 2007 levels. .........(more)

The complete piece is at: http://www.bloomberg.com/apps/news?pid=20601087&sid=aId91cQ5iwYU&refer=home

Quote
``Regular consumers don't need larger SUVs or pickups; it's a lifestyle choice,'' Standard & Poor's equity analyst Efraim Levy in New York said in an interview. ``If it's getting to be a bad investment, it's not worth buying a new one right now.''

People are making their cars last longer or picking up all those sub-prime victim mobiles just off lease. You would be a fool to go to a new car dealership when your bank has new cars at half the price.

(High gas prices, peak oil) - how come Ford and GM couldn't?
I have some sympathy for people who need the truck to make a living, but none at all for the auto-makers and the pinkie-dicked Hummer drivers going to Starbucks.

edited for spelling

``If it's getting to be a bad investment, it's not worth buying a new one right now.''

It never was an "investment". Buying a vehicle for personal use is a consumption expense.