Question about the auto industry??

[maseman]

GM, Ford and Chrysler are all hurting. But won't people need cars in the future? Cars and trucks are designed to last about 5 to 8 years before they start deteriorating depending on how much they are driven. Are people no longer going to buy any new cars? I know it is a slow down now but what about in one year or 18 months from now?

Second question is if people are significantly going to slow down buying new cars isn't that going to really help dealerships with used car/truck sales? That is even more profitable for them then selling new ones. Plus it seems the after-market care market such as tires, brakes, oil changes, tune-ups plus full-fledged auto body/engine shops will be a booming business with so many old vehicles to fix.

I guess I am looking for some silver lining to the big three going down the toilet.

(If you saw this in GDP...sorry. I meant to post in GD.)

[Veritas_et_Aequitas]

1. You're forgetting about foreign cars.

If the Big Three go down, presumably foreign companies will fill the gap left by them.

[maseman]

2. OK

Then that means more dealerships to sell foreign cars, more foriegn autobody and auto repair dealerships, etc.

[DainBramaged]

4. Of course, let the foreign car companies fill the gap

then we can be called the United State of Thailand and become a third world country. If we lose the Domestic Auto Industry, we lose America. Don't any of you get that? Or is it you are just so shielded in your little worlds that you don't understand the fabric of America?

[Kokonoe]

3. A lot of us will appreciate being better off with cheaper cars. Third world?

[Cessna Invesco Palin]

5. Few auto companies are doing well right now.

The big three are just doing worst than most - GM in particular.

But won't people need cars in the future?

Sure, but business thrive on cash flow and right now their cash flow is terrible and shows no signs of improving.

Are people no longer going to buy any new cars?

People will still buy new cars, but probably not at the rate that they did during the boom, and certainly not if financing is more difficult or expensive to obtain due to the credit crunch.

I know it is a slow down now but what about in one year or 18 months from now?

Nobody knows. That's a huge part of the problem overall, not just in the auto industry.

if people are significantly going to slow down buying new cars isn't that going to really help dealerships with used car/truck sales?

It might, but that's not where big dealerships make their money. They make their money on new cars and the plethora of add-ons that accompany new car purchases (which are essentially nothing more than free profit for the dealerships.)

Plus it seems the after-market care market such as tires, brakes, oil changes, tune-ups plus full-fledged auto body/engine shops will be a booming business with so many old vehicles to fix.

Of course there will always be a market for those things, but during an economic downturn where everyone is hurting, people will likely forgo maintenance. (I can get a couple more months out of these tires, can't I?)