Downsizing inside the automotive: another hoax that vanishes


More than two years ago I instilled the doubt about the Downsizing “trend”, which was all the rage inside the automotive, and about the Economics of decline.

My argument, with all humility towards leaders and excelled speakers’ opinion (who benefit JUST in saying certain declarations and not thanks the truthfulness, NOW ready to change the repertory of their interventions) was very simple and elementary. The crisis existed but its effects would disappear with its own end, no epochal turnaround, IF ONLY!

The crisis, as the story of the latest months in the USA could testify, can be overcome only by giving prominence to global domestic demand, increasing the expendable income, and not supporting the companies. They produce to sell, if there is nobody who buys, we know what will happen to the available support! Trying not to digress, let’s stay on the title of this post.

By now the USA are definitely out of the crisis as shown by information of August, “the auto market returns to pre-crisis levels!

The only analysis of car information, which will be briefly analyzed here, wouldn’t be enough clear .
The turnaround has occurred because there has been a recovery in domestic demand due to an increase in the population’s spending power . And finally, for the USA, employment data are permanently positive, the unemployment is down to 7.3%, indeed the last time that a so low data has been registered was in April 2008!

As mentioned in the “prologue”, it is clear the return to a more sustained domestic demand, so the more income=more spending power and, for the automotive industry, it means greater access to credit.

Happy Fourth of July 2013!

Happy Fourth of July 2013! © JD Hancock

And here they are, you say FINALLY, the notorious data: 1.5 MILLION sold vehicle in August 2013. It is an increase of 17% compared to August 2012.

The 2013 sales projection is about 16,09 million, such as the 2007 numbers! But let’s show the details:

  • GM (275,847) sells 15% more than August 2012, the highest number of sales since September 2008, of which 22.4% (61,620)were pick-ups;
  • FORD +12% (220,404) of which 71,115 (32.3%) were F-Series Pick-ups. It means that if we consider a 24-h day, FORD sells a F-Series pick-up every 42 seconds, It hasn’t happened since 2006.
  • CHRYSLER +11% (120,161). This is the 41st consecutive month with a positive sign. If we consider only the SUV models such as RAM, DODGE, JEEP Grand Cherokee and Durango the result is 31%.

Even imported cars have had some positive signs in double digits (+56.1%) and to be more precise, the first 3 brands in Asia:

  • TOYOTA +23%;
  • HONDA +27%;
  • NISSAN +22%.

While European OEMs:

  • BMW +35.4%;
  • MERCEDES-BENZ +15.8%;
  • AUDI establishes its US sales records with 14.005 cars sold and with a +21.5%

The numbers and percentages reported don’t allow a “complementary” view. The recovery exists and is established insomuch as you are reaching the highest market values in the US market history (17 million of registered vehicles). The “repressed anger” for the failed purchase is against immage products and social redemption ones.. to all ethical moralism face!

Nothing forbids you to think that this model, encouraged by OEM suggestions as well, can be replicated in other countries, including Europe. We only hope that downsizing and degrowth theorists will have the good taste to change job. What do you think will happen? To me nothing! They will go on considering themselves as influencers, analysts etc. on some other topical issue. even on hybrid and electric cars!

If I have to do a written forecast!
In my opinion, in Europe, considering the models at Frankfurt Show 2013, the dynamics will be different and we won’t have the same quantitative recovery as US, at least until 2017. but this is a story that I will tell you in a future post. 😉

Translated by Federica Izzo

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