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Old 02-15-2009, 08:05 AM   #1
AVANTI R5
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Default Four More Years” Of Doom: CryCo’s Jim Press Delivers Eulogy To American Auto Industry




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Shame on us that we’ve overlooked a startling statement made by Crisis LLC’s Prez. Jim Press, in a speech given last Thursday at the Economic Club of Chicago. Press basically said that anyone who expects more than 10m SAAR anytime soon is on drugs. Instead of getting getter, it might get worse,

“It would be a mistake to assume that this ‘10 million market’ is an aberration. Instead, we need to accept and come to grips with it,” Jim Press said. Coming to grips with it means that it will be a 10 million market for - gasp - at least for four years. In January the annual sales rate (SAAR) was just under 10 million units. Press is preparing the world for worse: “I’ve told our dealers that one day we may even look back on January of 2009 as the “good old days!”
Then, a second moment of startling truth:


“Now, Chrysler Financial did receive a $1.5 billion loan from the TARP fund in January. There’s no mystery about where that money went and will go. It was immediately put to work in connection with our “employee pricing” and “0% financing” to help get the market moving again. And that is helping to improve our sales situation. But, again, the lending restrictions are extraordinarily tight. Ironically, those customers who are eligible for credit tend to be among the rare group who don’t need it.”


As if that’s not truth enough, #3 followed:


“Frankly, the domestic auto industry had lost its way. We didn’t always deliver the quality in our products that our customers deserved. We didn’t take the lead on developing new fuel-efficient technologies as we should have. We lost sight of the customer. And we seemed to spend more energy fighting with government than we did finding ways to work together.”


The speech was meant as an inspirational address and a sketch of the “viability” plan to be delivered this week. It sounded more like a eulogy to the industry. Jim Press doesn’t sound like someone working for a secretive organization as Cerberus. He sounds like someone who already has a new job. Yesterday, we cited Erich Merkle who said: “If we don’t beat the second half of 2008 this year, then it could be all over. We’re all going to be peeling bark off trees and go back to being an agrarian society.” Now Jim Press says it will be worse than January. What are we going to eat now?
http://www.thetruthaboutcars.com/%E2...auto-industry/
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Old 02-15-2009, 12:34 PM   #2
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my prediction



the majority of people bought their new cars.

the majority won't buy new again for another 3 to 5 years.

the supply of used cars are plentiful and people will buy used first to save money for the next 2.5 years until the used car supply runs low and their prices rise.


then the majority will again consider new.
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Old 02-15-2009, 01:27 PM   #3
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Originally Posted by whoosh View Post
my prediction



the majority of people bought their new cars.

the majority won't buy new again for another 3 to 5 years.

the supply of used cars are plentiful and people will buy used first to save money for the next 2.5 years until the used car supply runs low and their prices rise.


then the majority will again consider new.
Um, what about the people who bought their new cars 2.5 yrs ago? There is always a market for new cars-- Chrysler needs to recognize that making the lowest rated cars in history (relative to their direct competition) does not make for a successful business model.
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Old 02-15-2009, 01:43 PM   #4
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Um, what about the people who bought their new cars 2.5 yrs ago?
if they don't have the money or credit rating they will buy used
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Old 02-15-2009, 02:05 PM   #5
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Step one: Build SUV's, mark up for huge profit

Step two: Fight Gov't about proposed CAFE Rules

Step Three: Oops...




Big 3 made on average $15,000 profit on SUV's. Where'd all that money go?
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Old 02-15-2009, 02:10 PM   #6
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Originally Posted by Skylab View Post
Big 3 made on average $15,000 profit on SUV's. Where'd all that money go?
$40,000,000 jets
$1,000,000 offices
orgys in las vegas


and they still think they can have all of that
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Old 02-15-2009, 02:14 PM   #7
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if they don't have the money or credit rating they will buy used
its easier to get approved on a new car and the rates ar much lower
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Old 02-15-2009, 02:17 PM   #8
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its easier to get approved on a new car and the rates ar much lower
low rates are irrelevant when a new car can easily be 2 or 3x the price of a used model.
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Old 02-15-2009, 03:28 PM   #9
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low rates are irrelevant when a new car can easily be 2 or 3x the price of a used model.
really, I guess term limits and high rates do little to effect a monthly payment?

$20k financed for 60 mos at 0% = ~ $334/mo
$20k financed for 72 mos at 5.5% = ~$327/mo

5-6 yr old car $10k financed (assuming decent residual values) for 36 mos @10.5% = ~ $325/mo

To the average American, the new car for $2/mo more seems to be the best deal. Sad but true.
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Old 02-15-2009, 05:10 PM   #10
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"...We didn’t always deliver the quality in our products that our customers deserved. We didn’t take the lead on developing new fuel-efficient technologies as we should have. We lost sight of the customer. And we seemed to spend more energy fighting with government than we did finding ways to work together..."
Those are the exact things that I have been saying for many years now - this guy is spot on.

This guy is a former Toyota exec - first American to be on Toyota's Board of Directors. He's seen the industry from the winning side and now from the losing side.

There are few other people better suited to being the President's Car Czar than this guy.
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Old 02-15-2009, 05:13 PM   #11
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Originally Posted by shikataganai View Post
low rates are irrelevant when a new car can easily be 2 or 3x the price of a used model.
It matters for people wanting a new model year.

e.g. 2009 WRX vs 2008 WRX.
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Old 02-16-2009, 11:03 AM   #12
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Originally Posted by BOY View Post
really, I guess term limits and high rates do little to effect a monthly payment?

$20k financed for 60 mos at 0% = ~ $334/mo
$20k financed for 72 mos at 5.5% = ~$327/mo

5-6 yr old car $10k financed (assuming decent residual values) for 36 mos @10.5% = ~ $325/mo

To the average American, the new car for $2/mo more seems to be the best deal. Sad but true.
Keep in mind it's $2/mo more but you have to keep paying for another couple years past that 36 month loan. I'd much rather have my car paid off quickly and own it outright and then drive it for a couple years outside of it's loan. Cars can last a decade pretty darn reliably these days, especially if you didn't decide to buy that $500,000 house out in the burbs with a nice fat daily commute attached to it. I think it's a little narrow minded to put all of your attention toward the monthly payment... That's what has gotten so many people in trouble. Being out of a loan as quickly as possible is always a good thing. I mean if such a thing existed, you could take out an 80 year loan on a Ferarri and have a very manageable monthly payment, but that wouldn't neccesarily make it a good deal. Not to mention used cars tend to carry lower registration fees and lower insurance rates.
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Old 02-16-2009, 11:53 AM   #13
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Originally Posted by jhargis View Post
Keep in mind it's $2/mo more but you have to keep paying for another couple years past that 36 month loan. I'd much rather have my car paid off quickly and own it outright and then drive it for a couple years outside of it's loan. Cars can last a decade pretty darn reliably these days, especially if you didn't decide to buy that $500,000 house out in the burbs with a nice fat daily commute attached to it. I think it's a little narrow minded to put all of your attention toward the monthly payment... That's what has gotten so many people in trouble. Being out of a loan as quickly as possible is always a good thing. I mean if such a thing existed, you could take out an 80 year loan on a Ferarri and have a very manageable monthly payment, but that wouldn't neccesarily make it a good deal. Not to mention used cars tend to carry lower registration fees and lower insurance rates.
but that means you are paying until year 8-9 of a cars life instead of until year 5. With the average cars lifespan being a decade or so, you are back into buying again in a few years. With the new car its five. So basically it's a wash in this example, as in half the time you are making a car payment.


The trick is to pay $$ for used, or get a better rate. Some banks give good rates for cars less than 2 yrs old. That or be able to fix it yourself, which is becoming harder as cars get more complex, and the average consumer is more likely to be in a technical, not hands-on profession.
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Old 02-16-2009, 01:24 PM   #14
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Originally Posted by jhargis View Post
Keep in mind it's $2/mo more but you have to keep paying for another couple years past that 36 month loan. I'd much rather have my car paid off quickly and own it outright and then drive it for a couple years outside of it's loan. Cars can last a decade pretty darn reliably these days, especially if you didn't decide to buy that $500,000 house out in the burbs with a nice fat daily commute attached to it. I think it's a little narrow minded to put all of your attention toward the monthly payment... That's what has gotten so many people in trouble. Being out of a loan as quickly as possible is always a good thing. I mean if such a thing existed, you could take out an 80 year loan on a Ferarri and have a very manageable monthly payment, but that wouldn't neccesarily make it a good deal. Not to mention used cars tend to carry lower registration fees and lower insurance rates.
That's exactly my point. most people fall for the trap of payment, not ammount financed or term.
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Old 02-16-2009, 03:07 PM   #15
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low rates are irrelevant when a new car can easily be 2 or 3x the price of a used model.
With fewer and fewer people buying new cars and discarding lightly used ones into the market.. used cars will stop depreciating so quickly. The only reason you can buy used cars so cheaply is because the market is saturated. Once we've chewed up 20% of the used car market, new cars will become extremely attractive again.
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Old 02-16-2009, 04:37 PM   #16
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With fewer and fewer people buying new cars and discarding lightly used ones into the market.. used cars will stop depreciating so quickly. The only reason you can buy used cars so cheaply is because the market is saturated. Once we've chewed up 20% of the used car market, new cars will become extremely attractive again.
that's assuming incentives and rebates on new cars don't keep on getting bigger and bigger as sales continue at their dismal pace.
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Old 02-16-2009, 06:17 PM   #17
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Big 3 made on average $15,000 profit on SUV's. Where'd all that money go?
on the big, high end SUV's yes. Then they lost ~$1-2,000 on each car they produced. Even at the 'best' production ratio, it was likely 1 $SUV per 5 or 10 cash loosing cars. It basically kept GM alive for a decade, but didn't force them to change.
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