With the second half of 2015 “grim” for Chinese auto sales, US automakers – who have field-of-dreams-like built inventories to record levels – have turned domestic for growth by extending credit for decades to anyone who can fog a mirror. That was all well and good until we discover this morning that the government’s consumer confidence survey shows Americans auto-buying attitude is the lowest since Jan 2013.


1. Inventories are at record (absolute) highs and at recession-signalling ratios to current sales…



2. And that is a problem because the much-hyped and hoped-for future sales to soak all this excess inventory up is not coming soon… As the consumer confidence survey shows the lowest level of “plans to buy an auto” since January 2013…


Probably a good time to hike rates then…

Automakers appear to have two options, offer buy-one-get-one-free to all new
Syrian refugees or cut production dramatically in hopes of easing
inventory excess.
Good luck.


Charts: Bloomberg

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