Auto Industry Feeling Economic Squeeze
Auto stocks are notably weaker here, with new lows for GM , CarMax , and AutoNation ; Ford is down 7 percent but not at a new low. CarMax missed earnings, and suspended guidance for the year.
--3.6% decline in used selling prices
--credit availability tightening
--sales and traffic weakening since Memorial Day
This is similar to what Deutsche Bank was saying: they are lowering their U.S. auto sales forecast. In addition to weaker consumer demand, DB also noted there was now a mismatch between what consumers want to buy (smaller, more fuel-efficient cars) and what dealers have in inventory (SUVs and other gas guzzlers).
Bottom line: not only is demand down, but prices for used cars are down as well, so auto dealers are squeezed.
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