Cars aren't selling...
 

http://www.silverbearcafe.com/privat...nsoldcars.html

I hope Segway can capitalize on, rather than fall victim to, this trend.

Seems like corruption and inept management is also rife in the auto industry if this glut of unsold cars was allowed to happen at all.

Given that bankers, manufacturers, retailers, etc. etc. etc. across the planet got blindsided by the world economic crisis and are losing money and/or going bankrupt in flocks, it's nice to hear from someone who apparently fully anticipated the crisis, and can at least pin blame at the auto companies on corruption and inept management. We're all angry at getting clobbered by this situation, but Dan's comment seems to only be uninformed lashing out.

Having said that, it's common to observe a sea of new cars at assembly plants or at ports-of-entry. Some of those images are everyday end-of-line storage. It's considered "proper" for the auto industry in the US to have a 60 day supply of cars in stock. In a reasonable year, that's 2.5 MILLION cars and light trucks in temporary storage waiting for sale, and that's considered NORMAL.

But it's not a reasonable year. In the US, the AVERAGE car sales are down 30%+ from a year ago. This includes all car manufacturers and importers, not just the "US" companies (whatever that means) that some people love to trash. Car sales for 2009 are expected to be around 10.5 million units, down from 13.2 million in 2008, and 16.1 million in 2007. So from 2008 it's a 21% drop and from 2007, a 35% drop in sales.

ALL of the car makers have way too much production capacity for the instantaneous new reality of 10.5 million units. Any big company that is capitalized to operate on sales of "X", and in three months find they must must operate at X-30%, WILL take a bath. Even high-flying Toyota is now reporting losses in the billions of dollars.

This monstrous drop in sales is due to economic weakness, which was initiated by the banking/credit crisis. This crisis developed in just a few weeks. It's still difficult to get credit to buy cars, or to get loans to maintain cash flow, because your business model has been turned upside down.

The ONLY thing that will fix this problem is for people to buy cars, a LOT of them, in the next few months. Unfortunately, the economic mess has rippled out through the economy, and people are saving much more, rather than spending. Businesses are doing the same, where they can.

For the most part, I'd guess that people/businesses don't take loans to buy Segs. On the other hand, Segs aren't critical to continued operation of homes and most businesses. I'd be surprised if the economic situation did not impact Segway too.

I agree with the majority of what Civicsman just posted, with the exception that this is something that just happened in just a few weeks...

The government mandate to loan money to people who clearly could not pay it back is something that has been going on for years.

The banks would not do it, except for the fact that government managed companies (Freddy and Fanny) always bought the bad paper.

Everyone was greedy, and taking their slice of this rotten pie. The people responsible to keep the pie from being rotten were the ones forcing the bad fruit into the mix, on the promise that they would keep the house of cards afloat.

Eventually, the bad paper was reshuffled into larger and larger decks of bad investment packages, and every time someone sold one of these rotten pies, (or truckloads of pies) they took their greedy commission... It got to the point that they all knew they were bad paper, but they wanted their commissions, so they kept selling them back and forth...

Then, supposedly all of the sudden, someone noticed that they had sold and resold and taken profit on so much worthless paper, that the house of cards started to collapse. They pumped in $100s of Billions and it still falls.

No, this did not take a few weeks. And several people said this was coming. Some were even working for the government, and were fired because they warned of it.

Now,

There have been reports for weeks how new car sales have been down 30 to 50% over last year. Last year the sales were also down significantly. While most large manufactures have a lag time in the manufacturing process to the sales floor, it is hard for them to scale back fast enough for this unprecedented decline. (The decline in sales is not unprecedented, but the scope of it is)

Since we have been hearing about such poor car sales for weeks now, and also hearing for months how 1/2 million or more people per month are loosing their jobs, what did you expect the picture of that at the ports or parking lots to look like?

When the economy radically slows down, things pile up. That is the way it works...

When the economy radically speeds up, parking lots are empty.

Less than 6 months ago, in New England, the gas prices were much higher, and there was a 6 month wait for a Toyota Prius hybrid. Now, prices for gas are 1/2 what they were, and they are offering rebates on that same Prius... That is what is happening.

There has been government endorsed fundamental greed and avarice built into the banking system for decades. This is not a new problem. The fact that it boiled over may seem new, but this cauldron has been on high boil for a while now...


Edit:

One final thought... If you watched the CEO of GM go to congress in his private jet and say that either you give me $50 Billion or I will fold up my company and put everyone out of work... Then two visits later, they give him 1/2 of that money... So, it seems to me that if you believe this guy, he is either going out of business, or back to the taxpayers, within a short matter of months... Would you buy a car, on a note, from him? I would not.

What a bunch of dookey! Just what is "normal" about those hundreds of cars being parked on a TEST TRACK? What would be NORMAL is that the track would be clear and IN USE for testing.

This post is nothing but vague generalities. All this bad news about the "bad economy" is nothing but a vicious generality itself.

The only effective solution to whatever bad situations may in fact exist is for people is to simply do their jobs and get on with it, NOT to lamely repeat idle gossip in an attempt to justify their situations or blame someone else for their troubles.

If one's job is eliminated, then that should be a message to the person that they weren't doing that job well enough or that they weren't predicting their own future well enough to realize that their job wasn't all that essential.

So a job is lost. Either find another, or get yourself trained in something else which actually IS in demand. Easier said than done, but still better than the grim alternative.

Not exactly the discussion I intended to trigger...

I won't respond to any of the points raised so far, at the moment.

Instead, I'll point out that one of the ways Segway could turn this to its advantage, is if they could convince people who were considering buying a car, who did not already have one, that maybe a Segway would satisfy their need instead.

Obviously, that's a small subset of the market for cars -- for most buyers, a Segway would not substitute. And I don't know if that subset can be effectively reached, or effectively persuaded.

But that subset that COULD use a Segway as a substitute for a car is still a large number to Segway.

This is one of my "Duh!" moments. If these car companies had any decent accountants they would have figured out what was going on months ago!

I would require the 'Big 3' car companies to only make electric cars - or at least to not make any cars that run on gas. Make all of them take the same size batteries - getting the gas stations to add a battery swapping station too.

I think that then Segway sales would soar!

Glenn

I don't think that the lack of car sales is indicative of a shift in the need for people to drive, or a reduction in the distance that people need to drive, but a re-affirmation that consumers often consume based on want and not need.

Most cars are sold when still working well. Each person will judge for themselves what is actually "working well" but unlike in the past, I don't really think that many people drive their cars into the ground as they used to...

If the real reason for the lack of car sales is financial, in that people would rather not spend their money, then segway sales may benefit only if they can convince the hesitant car buyer (or non-buyer) that segway would be a cost effective alternative. (cost of purchase, of maintenance, of per mile expenses, etc)

If the real reason for lack of car sales is financial in that they want to buy but cannot get credit, than it may not offer much to the segway market, unless segway loans are easier to get than car loans.

On the whole, I do not see segways as quite the equal alternative to a car for most people. For some, especially for those with mobility issues, it is better than car and walking, but for most, it is one more alternative in the several options that they have to get from point A to point B... Most can walk, bike, seg, drive, train, bus, taxi, or get someone else to carry you there, (this last option may be hard to make happen for some), and many more potential options.

Anytime a person makes a change to any of the options above, they make room to expand another option to fill the gap...

...and dookey to you, too. I clearly said "some" of the images were expected. They could have been taken on any day over the last 10 years. Many of the photos are from the UK (where all Europe's car companies are apparently corrupt and incompetent, too)

I agree, but what part of my post do you think is "idle gossip"? So what was the intention of your "corrupt and incompetent" post. From where I sit, it was uninformed, at best.

Karl, the government mandate you talk about is something I would expect to hear from Lord Rush. It existed/exists, but it was/is a very small part of the problem. I won't argue about the timing. You're right that it took years of regulatory failures to get us to this point, but the unraveling occurred in a few weeks, and that short period from "doing OK" to "in the dumper" is what caught everyone out. The US car companies were not "doing OK", and when the bottom fell out, they had no cushion. Most of us (including the car companies) weren't playing in the default credit swaps market and assumed (incorrectly) that someone was watching our back. Clearly, we were wrong.

Glenn, California tried to force electric cars in 1990, but it didn't work. The technology didn't (and still does not) exist, not to mention that the infrastructure to generate and deliver all the additional electrical power does not exist. FYI, car companies DID see what was going on, but when do you "flip the switch" (though that is not exactly possible) on the factories and put hundreds of thousands out of work? On the first week of a downturn? (Do you know it's a complete free fall?) The second week? The fourth week?

The "Big Three" were essentially shut down completely from mid-December to mid/end of January, with the exception of a few plants making popular vehicles. Now, they're pretty well shut down, but operational costs continue, in the billions of dollars per month. Do you naysayers have ANY idea how complex it is to operate a business of this magnitude. It don't turn on a dime, jack.

BTW, I've never worked for a car company, and my paycheck doesn't come from anything directly related to the automotive industry. However, I have spent enough time working around the industry to have an understanding of how things function, and to have some respect for the work it creates in the USA, both directly and indirectly. The entire industry is on the edge. The failure of one or two critical suppliers could bring it to it's knees. Pray it doesn't fall on it's *ss, or 7.6% unemployment will start to look pretty good.

Jeez, 1990 was almost 20 years ago! We all know that batteries work much better now than they did then. I think most of the problem is that the majority of people think that electric transportation doesn't exist.

Like part of that new 800 billion includes new cars for some government workers. Why can't they make them all electric? I've done facotgry work too, and it is (simply put, of course), replacing a car's engine and gas tank. Sure some people will be out of work, but the ones that are making those electric car parts will probably require more workers.

Does an electric car get better milage by plugging it in and getting their electricity from a power plant - even if the local power plant was fed by gas?
Gee, what if you could put up one of those windmills in your back yard and use that to feed electricty to your electric car! After the windmill gets paid for, you have fee gas!

We're supposed to be getting something like 350mpg on the Segways. If you drive to work in a gas-powered car, that is something for some people at least, to think about.

Its getting the country to see that electric powered vehicles are more efficient than gas-powered ones. It isn't a final solution, but I think it is a start.

Glenn