The Auto Industry Has Hit a Worrying Peak, Doug Kass Reveals 8 Telling Reasons Why
1. Car companies are offering the largest incentives on price in years.
2. The automobile inventory-to-sales and days-to-turn-sales ratios are back to elevated 2008 levels.
3. Used-car prices (the Manheim Index) have steadily declined.
4. A record level of autos are going off lease and will return to and further depress the used-car market.
5. After years of subsidized, low-rate auto loans, the consumer is spent up, not pent up, as car sales have been pulled forward.
6. Subprime auto loan delinquencies are ratcheting higher, and some auto lenders are turning away from the market.
7. Managements have poorly prepared for the auto down cycle.
8. The risks of protectionism and trade wars have recently increased.
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