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Auto Industry Cyclicality: Difference between revisions
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[[File:AutoUSSales.png|center|thumb|1293x1293px|<ref>https://public.tableau.com/shared/WSYQK59QR?:display_count=n&:origin=viz_share_link</ref>]] | [[File:AutoUSSales.png|center|thumb|1293x1293px|<ref>https://public.tableau.com/shared/WSYQK59QR?:display_count=n&:origin=viz_share_link</ref>]] | ||
* As seen in the figure below, the percentage of individuals reporting that the concurrent quarter was a bad time to buy a car spikes around the time of the auto sales collapse.<ref>https://www.stlouisfed.org/on-the-economy/2019/may/bigger-cause-2008-auto-sales-collapse-credit-conditions-economic-concerns</ref> | |||
* There is an overwhelming increase in the percentage that chose economic conditions. The percentage choosing the other answer stayed relatively flat. | |||
* '''Widely experienced negative shock to permanent income is a strong candidate explanation for the collapse.''' The explanation is consistent with the permanent income hypothesis adapted to include infrequent, discrete durable goods purchases. House price declines, on the other hand, explain only a small part of the auto sales decline. | |||
* A related explanation for the d'''ecline in auto sales is the increase in uncertainty''' that many researchers have associated with the last recession. Bloom (2009) presents a model where irreversible investment in durable goods causes an increase in uncertainty to reduce purchases of durables. We note that a new vehicle purchase exhibits an aspect of irreversibility, because the resale value of a newly bought new auto falls dramatically immediately after being acquired.<ref>https://s3.amazonaws.com/real.stlouisfed.org/wp/2018/2018-019.pdf</ref> | |||
[[File:BlogImage BuyACar 041619.png|center|thumb|483x483px|https://www.stlouisfed.org/on-the-economy/2019/may/bigger-cause-2008-auto-sales-collapse-credit-conditions-economic-concerns]] | |||
[[File:BlogImage ReasonsNotToBuyACar 041619.png|center|thumb|482x482px|https://www.stlouisfed.org/on-the-economy/2019/may/bigger-cause-2008-auto-sales-collapse-credit-conditions-economic-concerns]] | |||
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'''New''' | '''New''' | ||
[[File:CPI New Cars.png|center|thumb|1292x1292px|https://public.tableau.com/shared/XGMMQ9W2H?:display_count=n&:origin=viz_share_link]] | [[File:CPI New Cars.png|center|thumb|1292x1292px|https://public.tableau.com/shared/XGMMQ9W2H?:display_count=n&:origin=viz_share_link]] | ||
'''Used''' | '''Used''' | ||
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[[File:Screenshot 2024-03-13 141228.png|center|thumb|643x643px|https://www.annualreports.com/HostedData/AnnualReportArchive/v/OTC_VWAGY_2009.pdf]] | [[File:Screenshot 2024-03-13 141228.png|center|thumb|643x643px|https://www.annualreports.com/HostedData/AnnualReportArchive/v/OTC_VWAGY_2009.pdf]] | ||
[[File:Screenshot 2024-03-13 141252.png|center|thumb|750x750px|https://www.annualreports.com/HostedData/AnnualReportArchive/v/OTC_VWAGY_2009.pdf]] | [[File:Screenshot 2024-03-13 141252.png|center|thumb|750x750px|https://www.annualreports.com/HostedData/AnnualReportArchive/v/OTC_VWAGY_2009.pdf]] | ||
==== General Motors ==== | |||
'''Why did it failed?''' | |||
== 2001 Recession == | == 2001 Recession == | ||