Automobile Industry

It is a fundamental law of nature that all life dies and it is a fundamental law of economics that every business eventually goes out of business.

It is our belief that this time is fast approaching for the North American automobile industry. Their decline began decades ago when Asia, namely Japan and later Korea, began selling automobiles in North America. No matter what they did, the North American manufacturers continued to lose money - and market share. They blamed it on high, union-negotiated, labor costs, but they could not compete on quality.

We feel they have just taken the next step to their own demise by exiting the auto leasing business because of unstable car prices.

The prime advantage of leasing a North American made auto was that it was generally acquired at a lower price than the imports, had better financing terms and you didn’t have to own the clunker at the end of your lease. So depreciation wasn’t your problem and if you leased you could get a new car every 3 or 4 years. But no longer.

Now they want us to go into debt to buy the clunker. Many of us will think twice because quality and resale value now become our concern as owner. What good is owning a 4 year old vehicle that you still owe $15,000 on when you can only sell it for $10,000.

Add to that the next wave of competing Asian automobiles that will come from China and India and we predict that GM, Ford and Chrysler will go the way of the Edsel - and find a place in the Smithsonian but not on our driveways.

So when they start offering you that 10 year, bumper to bumper warranty remember what I told you “they are going out of business”.