Watch out! The car market is turning around

• Source: Gasgoo
• [13:36 August 10 2009]
• Comments

Don't throw away the keys to those parts and car plants yet. Everywhere in the world, the car market is turning around.

I have been – dare I say this – in this business since 1973. I have been through my share of recessions. I have seen the first oil crisis of 1973 and the second oil crisis of 1979. I have witnessed (and made my contributions to) the stock crash of 1987. Each time people, even and especially at the car companies I worked for, predicted that the market will never come back. They predicted the end of the automobile. People would ride bicycles, or in (steam-operated) trains.

Each time, they were wrong.

Each time, people suddenly couldn't stand it any longer, they went to their car dealers and demanded new cars.

It is happening again.

China was first. China jumped into double digit growth territory in February and never looked back. Months after month, the increases became bigger. In July, China registered the biggest gain since January 2006, passenger vehicles up 70.5 percent, overall vehicle sales up 64 percent. Double digit growth has solidly returned to China.

Germany was next. In May and June, German car sales exploded by 40 percent. In July, the German car market grew nearly 30 percent. German car exports also show signs of a turn-around.

Europe as a whole registered a small growth in June. The July numbers, which should be announced this week, will most likely be better. The economies of growth markets in Central Europe, which were on the verge or bankruptcy, show signs of recovery.

Brazil, India: Growth everywhere.

America was a classic case of "the higher they climb, the deeper they fall." America saw the biggest car crash in history. Sales levels had not been so low for more than 30 years. GM and Chrysler went bankrupt. They took a whole industry with them. Now, even the American market is rising from the dead. Driven by cash for clunkers government incentives, American buyers suddenly storm the showrooms. Dealers are "selling cars like candy bars," as the New York Times reports. Dealer lots are empty. Dealers who have cried for help are now screaming for new inventory. America's closely watched annualized selling pace rose to 11.24 million vehicles, a significant jump from June's 9.69 million rate.

I'm old enough to have learned from John F. Kennedy that "when written in Chinese, the word "crisis" is composed of two characters-one represents danger, and the other represents opportunity."

Here was our crisis. Here is our opportunity.