“Consumer confidence is shot,” laments Don Esmond, second-in-command at Toyota Motors Sales, USA.
Esmond is one of a number of senior executives on hand for the 2009 Chicago Auto Show, the nation’s largest in terms of consumer turnout. The question is whether potential buyers will show up – and even if they do, whether they’ll be willing to take the plunge and buy a new vehicle.
According to Esmond, Toyota now estimates that 1 million Americans, with the means to purchase a new vehicle, have postponed actually buying a new car, truck or crossover for anywhere from six to twelve months, because of the uncertain economy.
During a reception for Prius owners prior to the opening of the Chicago show, Esmond noted that the prevailing sales rate across the industry is now notably lower than replacement demand and is running at less than the U.S. scrappage rate, which is about 12.5 million units annually, he said.
The upside for automakers is that this “pent-up demand” is substantial and should boost sales once consumer confidence begins to return, Esmond says, but he admits nobody knows when that’s going to happen.
Key markets in California, Nevada, Arizona and Florida have all been rocked by the financial meltdown. “The recession probably started 12 months ago and we’ve probably got another six months to run,” Esmond said.
However, no one really knows at this point. Esmond also said he is hoping the economic stimulus package, now awaiting final approval in Washington D.C,. will help push car sales towards recovery.
Six more months? If this “recession” (more likely Great Depression II) were only to last another six months, I’ll be so overcome by joy that I’ll probably swoon. But then, consider the source of the statement – the manager of a car sales organization. Enough said.