New Car Sales Shrink while Junkyards Grow
The Great Recession continues, and its effects both obvious and subtle. Here's an example of the latter. This is a considerable drop from the Between 1999 and 2007, 17 million cars were sold. Yet the Earth Policy Institute reports that In 2009 approximately 14 million cars were scrapped while only 10 million were sold. The last time car sales were that low versus scrappage was back in World War II. While most people think the Cash for Clunkers program played a huge part, the Institute begs to differ since the Cash for Clunkers program required people to purchase a new car to replace the one that was being scrapped. Instead, the EPI claims that the increased urbanization (i.e., more folks in the cities where cars are not a necessity) and the increased costs of owning a vehicle are to blame. Given these trends, the EPI predicts that the number of cars on the road will drop 10% by 2020 as sales fail to return to the 17 million annual level. More details can be found at the original post. Our take? We're not really surprised. Next to housing, cars are a major expense in anyone's budget. If you can dump it and continue to live just fine, you'd do it.
According to Edward Whitacre Jr., Chairman of the Board and Chief Executive Officer of General Motors, GM...