Quote:
Originally Posted by DGthe3
They are already well aware of what happens when people can't afford to buy their cars. It caused a 40% drop in auto sales & sent 2 major automakers into bankruptcy.
And you can't really expect companies to just eat increasing costs & hppe things to turn out well.
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But at the same time, they can only fall back on sub-prime financing and extending the payments out for 84 months and beyond (and lets be honest, that's been one of the strongest drivers of the recent rise in sales) so much before they end up eating it all in the end anyway if people start defaulting on payments and they get back underwater cars, or people are simply forced to put off buying the next one because their trade is underwater.
All I'm saying is the automakers are on a knife edge right now between building up sales and revenue through special financing now and setting themselves up for another bust at a future date. I fully admit that the rising costs have a lot to do with things they cannot control, but they need to be very careful in formulating their strategy and risk management for dealing with it, and positioning themselves to be able to cope themselves and not have to fall back on the taxpayer again should anything go wrong. I don't think $45K+ Chevrolet sedans is the most affective way of going about that.