From Marketwatch:
General Motors Co. on Wednesday is expected to file for a long-awaited public offering that will take its place among the biggest IPOs in history and set the stage for the U.S. government to exit the car business.The company is reportedly looking to raise up to $16 billion, with the U.S. Treasury selling some of its shares. For taxpayers to fully get their money back, the public offering likely has to bring in about $70 billion.
The latest retail sales figures show that auto sales were strong last month and the latest industrial production numbers were strong, partly as a result of auto production.
Finally, consider this chart:
Auto sales have risen from a bottom, but have a long way to go before they hit previous levels. It's also important to ask whether or not we'll see auto sales rise to that previous levels anytime soon considering the consumer retrenchment we're seeing along with a high unemployment rate.
1 comment:
Deferring the purchase of a new car is an easy thing to do in most cases. You simply keep driving the old car a bit longer. And we really should keep our cars longer and/or buy them used.
Today's cars, they last much longer thab they did 25 years ago or so, so there isn't that much increased maintenance cost for a while.
But at some point, a major repair is necessary. Do you put two grand into a 2001 Sable that still has other issues? Or do you put that two grand down on a new car?
There is a pent-up demand for cars. It may take a while and we're probably not going back to 16 million cars per year for a long time. But auto sales are going to continue to climb.
FYI, my current drive is a 2001 Focus with 210K miles. I'm looking longingly at the Fiesta.
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