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Thursday, June 7, 2012

China's Auto Dealers' "Backs Are Broken" - Car sales crashing

For the past year or more, auto companies, GM in particular, have claimed that they are selling cars as fast as they can make them. This however is far from the truth as the following reports prove. GM and other auto companies have not slowed down their production but their sales have crashed. To maintain the illusion of Recovery in the auto sector, GM reports a vehicle sold as soon as it leaves the manufacturing plant. However  millions of these cars sit in showrooms, and on dealer lots gathering dust since tapped out consumers have no capacity to buy these vehicles. In the end they are sold off below cost incurring heavy losses for GM and other auto manufacturers. Eventually these auto companies will come with their begging bowls out once again looking for handouts from the Government, read from taxpayers. Corporate earnings reports are based more on creative accounting than on sound business. Factual losses will overtake fictional profits sooner rather than later with even more devastating consequences for the Global Economy than in 2008.

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