The Ignorant Investor

The rate is annualized based on January's sales, but it's even worse than it sounds because our population is 30% bigger now than it was then. The drop was worse for Ford and GM, but even the top Japanese brands were hit with drops in the area of 30%. Only Subaru and Hyundai saw gains, and Hyundai's success was due to a risky promotion where they promise to take back the car if the buyer loses his or her job or something in the next year. Something tells me that 12 months from now that promotion will come back to bite Hyundai on the ass. In the meantime, party on my South Korean industrialists friends!

One problem the automakers have is that modern cars are so much more durable than those we used to see in the 1980s. The engines work better, the lubricants do a better job of protecting moving parts, the bodies don't rust so quickly. Customers often buy new cars today because they want to, not because they have to. And as soon as people are worried about their jobs, it's a natural thing to extend the life of a car out when money is short. This will make the recession that much more severe.