Auto Bubble Shift

Sunday, October 25, 2015

Following car sales can provide insight into the high time preferences of the car-buying masses. Compact car sales vs truck & SUV sales go in lockstep with gas prices with a focus only on today, never tomorrow. Low gas prices, along with almost-zero (or zero) interest rates, is driving this crazed auto bubble. Another one that will pop, and everyone will act surprised. Again.

But inventories continue to creep higher as sales of both cars stay cold. As of Oct. 1, there was a 116-day supply of Sonics on dealership lots or en route to stores, up from 98 days a month earlier, according to the Automotive News Data Center. Verano stocks were at 100 days, up from 81.

Chevy sold 50,535 Sonics this year through September in the U.S., a 35 percent drop from a year earlier.

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