Monday, November 3, 2008

More Bad Economic News

Last week I was wandering around the lot of a local car dealership after having purchased a part for my vehicle. I noticed that quite a few of the used vehicles, the large ones in particular, had large markdowns - often twenty percent. To give up that much on the price of a car even before the haggling started seemed a bit out of character for an American used car dealer. I also noticed that most of the salespeople were not with customers, despite the fact that it was a good time for them to drop by.

Apparently, there's a lot of that going around these days:

DETROIT (Reuters) - U.S. auto sales plunged near 25-year lows in October, led by a 45 percent drop at General Motors Corp, with no sign the industry's year-long slump had hit bottom and doubts persisting that all the major automakers can survive.

Hurt by tighter credit and deepening uncertainty about the strength of the economy, U.S. sales fell to their weakest monthly level since 1983, based on early sales results.

European auto sales also tumbled for October, with sales declines of 40 percent in Spain and 19 percent in Italy.

Adjusting the figures for the population of the United States, GM said October was the industry's weakest month since the end of World War Two.

Sales for Toyota Motor Co was off 29 percent, Honda Motor Co fell 25 percent and Nissan Motor Co tumbled 33 percent.

Auto sales plunge to near 25-year lows

Things like this are more than just a troubling sign. The auto industry is one of our prime manufacturing industries. Like the banking industry, it's a bedrock of our economy. Some observers of the economy talk as though there's a recession on the horizon. I have news for them. It's already here.

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