U.S. Capacity Utilization for the motor vehicle and parts industry hit a record low of 37.3% in June 2009. In many ways this chart sums up what is happening in the U.S. auto industry. Just over a third of the industrial capacity in the U.S. motor vechile and parts industry was being utilized last month.
Data source:
U.S. Federal Reserve
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The above chart shows a historical view of the average expenditure per domestic and foreign car in the U.S. Americans are willing to pay substantially more for a foreign car. However, the gap between what is paid for a domestic car vs. a foreign car has been declining in that past few years.
Data source:
U.S. Bureau of Economic Analysis
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The above charts shows the average length of new car loans made by auto finance companies in the U.S. It now takes about 1 1/2 years longer to pay off a car loan than in the early 80’s, and about 2 1/2 years longer than in the early 70’s.
Data source:
U.S. Federal Reserve, G. 19 Consumer Credit
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The above chart takes data on total U.S. vehicle sales and splits it out between autos and trucks. What is very interesting is how the increase in truck sales since the early 1980’s can be seen as an analogy for the over-consumption of the past few decades. Truck sales look very similar to the debt chart (chart #2) and an inverse of the personal savings chart (chart #3) shown in this article: http://chartingtheeconomy.com/?page_id=56. Sales of bigger, less fuel efficient, often more expensive vehicles soared while auto sales were flat (to slightly down) since the early 80’s.
Data source:
U.S. Bureau of Economic Analysis
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The above chart provides a historical view of U.S. vehicle sales. The data is seasonally adjusted at an annual rate. From November 2008 to May 2009, U.S. vehicle sales have been averaging about 10 million units at an annual rate. This is less than half the recent peak reached in 2005.
Data source:
U.S. Bureau of Economic Analysis
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The above chart shows that U.S. auto inventories in May 2009 improved from their recent record highs. However, auto inventories continue to be at a very elevated level.
Data source:
U.S. Bureau of Economic Analysis
Note: This data does not include truck sales.
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Auto Inventories for February 2009 were 5.1 months of supply which represents a slight improvement from the record high set in January 2009. However, February auto inventories remain at extremely elevated levels and are over twice the long term average of 2.5 months of supply.
Data Source:
> U.S. Bureau of Economic Analysis.
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The above charts show auto inventories in months of supply based on the inventory to sales ratio. The first chart shows a historical view of the auto inventory to sales ratio. The second chart gives a closer view of the recent spike in the inventory to sales ratio. As you can see from these charts the auto inventory to sales ratio: 1) has increased quickly in recent months, and 2) is at a record level. The average inventory to sales ratio for the U.S. auto market since 1967 has been 2.44 months of supply. In January 2009 the U.S. auto inventory was at 5.4 months of supply.
If you are in the market for a car, then make sure you drive a hard bargain. You have plenty of leverage in your negotiations. I am not advocating spending over saving in this economic environment. However, if you need a car, make sure you remember the above charts when you sit down to bargain.
Below is a chart that shows the market share of the U.S. retail auto industry.
Data Source:
> Bureau of Economic Analysis, Table 7.2.5S.
> Market share data is from Autodata
> Includes cars and light trucks.
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