By: Pete Kornafel 

General Motors announced a significant headcount reduction and closing of several plants on 11/26/18.  There are three major factors that led to this. 

One is a flat market for new vehicle sales in 2018.  Rising interest rates have largely killed the zero-rate financing deals, and have increased payment sizes and lease rates for most vehicle purchases.  Absence of major new models also contributes to the flat market. As a result, 2018 US new vehicle sales are up a tiny 0.2%vs. 2017 YTD through October.

Second, there continues to be a significant change in the mix of new vehicle sales.  Figure 1 is a chart from the Wall Street Journal article about General Motors announcement in late November 2018.

Continue reading “US New Vehicle Mix Change”

Written By: Pete Kornafel

Most people in the automotive industry are painfully aware that the US recession created huge swings in new vehicle sales a decade ago.  New vehicle sales in the US exceeded 16 million units per year from 1999 through 2007. New vehicle sales fell to about 13 million in 2008 and 10 million in 2009.  They slowly came back but did not reach 16 million again until 2014.  This Created a huge “gap” in the population of vehicles during the recession years.

It did not impact all makes and models equally.  For example Chevrolet Silverado 1500 sales fell from about 500,000 in 2007 to about 300,000 in 2009.  That was just one factor that led to GM’s bankruptcy in 2009.  Silverado 1500 sales continued to fall to below 200,000 in 2010.  As a comparison, Lexus sales dipped a lot in 2009, but fully recovered in 2010 to their 2007-2008 level of almost 300,000/year.

Continue reading “Aftermarket Echoes of the Recession”

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