AUTOMOTIVE INSIGHT: California Loses its Luster

December 3rd, 2008 at 5:02pm

As heard on
WWJ Newsradio 950

Listen to this story:

Californians buy more cars than people from any other state, but this year it’s losing its luster as an automotive marketplace.

Traditionally California buys between 16 and 19 percent of all new cars sold in this country. But this year that’s dropped to 12 percent. That represents a drop of half a million cars.

And it gets worse. According to CNW Marketing, only 14 percent of Californians are able to afford a new car, down from 30 percent a decade ago. And it says that for the first time since 1984, the number of Californians who say they intend to buy a new vehicle as dropped below the national average.

Asian automakers have enjoyed great success in California, but CNW says the need to succeed in California is losing its luster. It will still be a very important market, that can’t be ignored, but not as important as it was in the recent past.

5 Comments to “AUTOMOTIVE INSIGHT: California Loses its Luster”

  1. GEORGE BISHOP Says:

    ENIGMA- PISHING– BAIL OUTS!!!

  2. Tom Martin Says:

    This is bad news for the auto industry and the rest of the county.

    California leads the nation in so many ways: godd and bad.

    When real estate declines in price, it usually does so in California first. When it rises, it rises first in California.

    If affordability and auto sales are down in California, I contend that affordability and and auto sales will soon drop everywhere else until California represents their normal percentage.

  3. Tom Martin Says:

    John, I wish there was a way for me to edit my comment and correct the grammar and spelling.

  4. Mike Hawkins Says:

    California is falling under a crippling debt load, with taxes to inevitably rise.

    In addition the real estate bubble was twice as bad here as anywhere else except maybe Florida and Las Vegas.

    The people of the state, if they have money, are two busy wondering what’s going to happen next.

    It will be back though. There is too strong a foundation of innovation and the place to be for cutting edge business.

    This going to take a few years to work out.

  5. John masterson Says:

    John,

    I can tell you as a automotive consultant (WAC — Western Automotive Consultants) and former 35 year VW dealer, California is in deep Caw-caw! Here are just some of the reasons:
    1. Too many dealers. Wouldn’t be surprised to see a decline up to 25%.
    2. Envirionmental laws adding additonal costs.
    3. Severe housing decline wipes out ability for down payments or purchase via refinancing.
    4. State is deeply in debt and will figure out a way to generate more taxes (less spendable income.
    5. Ten year binge of forcing the market and putting people in cars-trucks for extended terms. (unable to trade)
    There are more but who’s counting. Probably the biggest hit will come to the cities with auto centers who have built budgets counting on the sales tax generated.
    All in All, the grinch is living in California (but not buying a vehicle).