AP Report on 'Disappointing' Car Sales Partially Blames Debt-Ceiling Debate
Did you know that car buyers in July took "worries" over the debt-ceiling debate in Washington into account when they decided to buy -- or apparently decided not to buy?
Neither did I. But Dee-Ann Durbin and Tom Krisher rolled out that excuse this evening as one factor explaining why July's car sales were "disappointing," and then appeared to stuff those words into the mouth of the spokesman for General Motors.
Sale were indeed "disappointing," up less than 1% of over July 2010, which was described at the time by CNNMoney.com as "Best Since (Cash for) Clunkers, But Still Weak" (that's the window title; the article title got sanitized later).
Here are several paragraphs from the AP pair's report (the excuse and the word-stuffing are in bold):
US auto industry uneasy after weak July sales
Auto sales rose only slightly in July as skittish consumers pulled back on car buying and threatened to derail the industry's fragile recovery.
With the economy weak, popular cars in short supply and dealers offering very few discounts, carmakers endured a third straight month of disappointing sales. Just over 1 million new cars and trucks were sold in the month, up 1 percent from last July and flat with June.
Sales started strong this year but have slowed as the economy faltered and Japan's earthquake left Toyota and Honda dealers short of popular models. Unemployment rose to 9.2 percent earlier this summer, the highest level this year, and consumer confidence is shaky.
"We're still not back on the track of recovery yet," said Jeff Schuster, executive director of global forecasting at J.D. Power and Associates. "There's definitely some weakness kind of looming out there."
Adding to buyers' worries in July was the government debate over the debt ceiling.
"Uncertainty, in our business, is always bad for consumers," GM Vice President of Sales Don Johnson said.
... Both Ford and GM have scaled back their annual forecast for the year, saying U.S. sales are likely to be closer to 13 million instead of the 13.5 million they had hoped for.
... He said automakers need to accept that the recovery could take longer than they anticipated and shouldn't panic and resort to discounts to sell more cars.
The final excerpted sentence made me think of this little clip from "Animal House" -- "All is well!"
No it's not, and it has nothing to do with the debt ceiling drama which just transpired.
Cross-posted at BizzyBlog.com.
- Tom Blumer's blog
- Login to post comments
Comments
AP's next headline
Submitted by hbnolikeee on Tue, 08/02/2011 - 11:52pm.
Debt Crises Aids Global Warming.
I was thinking the inverse . . .
Submitted by Galvanic on Wed, 08/03/2011 - 3:04pm.
"Low car sales attributed to global warming"
Sounds like
Submitted by SLUGGO on Wed, 08/03/2011 - 12:04am.
I may be able to get that Shelby GT500 this year after all.
Sluggo
I think the sluggish sales
Submitted by Tugboat Phil on Wed, 08/03/2011 - 12:57am.
are because they're importing them from Detroit. At least that's what Chrysler says.
Detroit is definitely a planet
Submitted by johnsonl on Wed, 08/03/2011 - 9:01am.
unto itself. They're offering cash to people who will move downtown and "revitalize" it.
Yea, I wonder who's cash they are offering
Submitted by Boudin on Wed, 08/03/2011 - 9:05am.
As if I didnt know.
Leave it to the economically illiterate AP to miss the point....
Submitted by big.league.slider on Wed, 08/03/2011 - 2:35am.
Either the AP writers are ignorant of free market economics, or (most likely) they have a political agenda. The "debt ceiling debate", which only lasted a few weeks, had nothing to do with car sales. GM got into its recent financial troubles because overall, they were selling cars for less than it cost to produce them. GM has done nothing to correct this basic structural issue. Regardless of what the AP would have you believe, if you're averaging a loss on each car you sell, selling more cars only means a bigger loss.
The design and build cycle of automobiles is also relevant. The price that GM needs to sell cars profitably for today was established 3 or 4 years ago, when the car was designed.
GM will burn through their Obama cash in a year or two, at which point they will again be bankrupt. Only this time, President Perry and the Republican Congress will not bail them out.
I'd bet that the blowback over the billions in taxpayer money that Obama gave GM is the biggest current drag on GM sales. I own and drive a GM truck. I love GM trucks, and I'm not so fond of Ford trucks. I want to replace my 8 year old truck with a new GM truck, but I have not yet done so out of principle. Until GM pays back every cent of the $45billion or so that it still owes US taxpayers, I will not buy a GM product. I'm sure I'm not the only person that thinks this way.
GM products are absolute crap. Diehard Bowtie
Submitted by johnsonl on Wed, 08/03/2011 - 9:07am.
lovers are in agony. GM is going to continue to fail because their business plan is to build crappy vehicles, sell them for less than what it costs to build them, kiss the UAW's collective butt profusely and hold their hands out for government bailouts.
If GM really cared about their products and employees, they'd close up shop, move to a "right to work" state and start all over with quality products, employees who appreciate having a job and don't mind actually working for a living.
Generous Motors
Submitted by Karma on Wed, 08/03/2011 - 10:16am.
was the name used in our area by the union workers themselves. There is no defense for GM, the UAW or the Government, but the majority of the laborers I know are good hardworking people who won't voluntarily give up their high wages, benefits and retirement. Who would? The fault lies in the system designed by the three culprits listed above.
They were expecting better
Submitted by motherbelt on Wed, 08/03/2011 - 6:45am.
They were expecting better numbers, so this was "disappointing."
Thus, the lousy numbers were also "unexpected." <snicker>
Gee, does 15% unemployment have any effect? Hmmmm?
Submitted by Red Jeep on Wed, 08/03/2011 - 8:27am.
Just askin'.
Does this make sense?
Submitted by octavioj on Wed, 08/03/2011 - 9:24am.
We were told time and again that the failure to raise the debt ceiling would increase interest rates. In light of that would not people who were thinking to buy a car rush to buy them? Would that not have had the opposite effect of anticipating the sales of later months? If I were in the market for a new car and were told the interest rates would go up I would try to secure my loan as soon as possible. How is that not analyzed by the media? These people are getting lazy.
Excuse me, but wasn'tq
Submitted by syvyn11 on Wed, 08/03/2011 - 9:29am.
Cash for Clunkers supposed to save the auto industry?
GREAT JOB dumB.O.
This is nothing new. In the
Submitted by NC Cop on Wed, 08/03/2011 - 9:32am.
This is nothing new. In the run up to the election, look for our one party media to blame every problem in the country on the debt ceiling issue. The media will then, of course, blame conservatives for the debt ceiling agreement and everything will be their fault.
debt ceiling blame
Submitted by jon_torlin on Wed, 08/03/2011 - 9:33am.
Is there anything that hasn't been blamed for the debt ceiling debate?
-Jon
Wait....It's Bush's fault
Submitted by Blonde on Wed, 08/03/2011 - 9:49am.
The new democrat talking point...."the Bush recession was worse than we thought".
Handy Reference Guide to Obama's Gaffes and Goofs ~ Currently Numbering 200 (and Counting)
Car sales are slumping because people are losing, or are afraid
Submitted by Dave. on Wed, 08/03/2011 - 9:36am.
...of losing their jobs.
Another reason is that, unless you have pretty much spotless credit, you aren't going to get financing because the banks aren't going to loan you the money to buy sh*t on a stick, even if you show up with a suitcase full of money for a down payment.
And who has spotless credit these days?
-Dave
Vote for the American in November
And the banks aren't loaning money
Submitted by Radical1979 on Wed, 08/03/2011 - 10:34am.
because the feds are all over them with new regulations. We have a business and despite making all of our loan payments we've been warned some loans won't be renewed because of new regs.
Thanks again Obama.
Rad, wait until people up on their mortgages get foreclosure...
Submitted by Dave. on Wed, 08/03/2011 - 3:08pm.
...notices stapled to their garage doors, all because their paid-up loans have been found to be "out of margin" by the fed inspectors.
Obama is deadly serious about creating the NBoO (National-ized Bank of Obama) and to help him get there, he has to drive private lenders of all types out of business - every last one of them.
- Just like he's doing to private health insurers.
It's a hell of a Marxist coup he's got going on, ain't it?
Too bad the stoopid American Idol-hypnotized zombie sheeple are missing it.
-Dave
Vote for the American in November
Dave in related news,
Submitted by Radical1979 on Wed, 08/03/2011 - 3:21pm.
Obama is keeping the receipient class happy by giving them free cell phones. http://newmediajournal.us/indx.php/item/2462
I'm thrilled to be providing this service to people who don't work and so don't need to call the boss and say why their late. But if there are any drug dealers out there, or people looking to hook up with all their free time, they're covered. And we know how they'll be voting in 2012.
I'm so sickened by all this I cannot put it into words.
Rad,
Submitted by Dave. on Wed, 08/03/2011 - 4:53pm.
Something tells me I reflect too much light to qualify for an Obamaphone.
As for Obama and the stoopid zombie sheeple that appear to be poised to re-elect him to the White House, I am about ten miles past disgusted at this point.
I know many want to think that he will get tossed out on his ass just like Jihad Jimmy did in 1980, but they aren't taking into account the huge demographic shift that has taken place in this country in the 31 years since.
This is a very different country now.
-Dave
Vote for the American in November
Our group practice is in the same boat.
Submitted by drsamherman on Wed, 08/03/2011 - 9:01pm.
I am a member of the group's management committee, and this morning we heard a report from our practice administrator about a line of credit we have had with the same bank for over thirty years. Our collections are actually in better shape and we have streamlined to the point where we are actually somewhat profitable. The bank is considering not renewing the line of credit due to concerns over our Medicare and Medicaid reimbursements thanks to Duh-bama Care. If you consider the time it takes to be reimbursed for a medical claim from any given insurer has gone from 30 days to over 60 days in the past few years, we managed to keep our cash flow very healthy and still the bank is citing tighter lending restrictions from the regulators. I have no idea what will happen if the bank says no to refinancing the line of credit, but the repercussions will be immediate. Most likely this will mean staff layoffs and longer working hours. I am at 140% of my billable capacity, and I can't take any new patients until October. This is going to be tough.
Doc Sam---
Submitted by matthewdean on Thu, 08/04/2011 - 1:37am.
Duh-bama Care reminds me of a line from a song in "Paint Your Wagon" ---
"---cured of what we're sufferin' from, and sufferin' from the cure ---"
Unintended consequences, indeed.
MD
doc sam
Submitted by Radical1979 on Thu, 08/04/2011 - 12:42pm.
This driving private business's out of business cannot be anything but planned. You're story is just another method of introducing single payer. Make it impossible to physicians to be self employed, so the government will employ them, and thus have more control over medical care.
What they are looking at is
Submitted by jessieH on Wed, 08/03/2011 - 8:20pm.
What they are looking at is sales of government motors failure of the chevy volt. With all the oil in this country, why the hell are we doing what the 10% of the whole country says? How long do we take it in the backside from these moronic legislators? They sit in their taxpayer paid offices and call Americans names that children shouldn't hear. They call us terrorists. They call us tea baggers. They call us redneck hicks. Flyover States. Personally, I think it's time to lock and load. But, I'm just an American Citizen, what do I know? Ask one of our elected servants, I'm shure they have it written down.