U.S. AUTO-MANUFACTURING WON'T ACCELERATE INTO 2015 - MIZUHO SECURITIES
Mizuho Securities Chief U.S. Economist Steven Ricchuito says automobile production will not continue to accelerate as we go forward into 2015.
SHOWS: NEW YORK, USA (JANUARY 9, 2015) (REUTERS - ACCESS ALL)
1. MIZUHO SECURITIES, CHIEF U.S. ECONOMIST, STEVEN RICCHIUTO, SAYING:
JOURNALIST ASKING STEVEN RICCHIUTO: "Auto-manufacturers reporting sales numbers this morning. Chrysler is up 20 percent, still missed expectations, Nissan just narrowly topped, Honda's fell short, what are your thoughts on the outlook for U.S. auto sales?"
RICCHIUTO: "You know we have kind of pushed auto sales as far as I think we are going to push them. It is a very very high level of activity. We have done it on the backdrop of extensive discounting of product, for example, Chevy is advertising the Chevy Cruz for $69 per month zero down I mean that is a pretty cheap automobile. You see that throughout the entire spectrum of the auto complex where people are really using residual values and the low cost of financing to really drive activity. And when you consider the consumer in terms of the cost of maintaining older automobile these days talking about replacing brakes, replacing tyres or for that matter, these days just replacing spark plugs which are now very expensive because they last a lot longer. You wind up in an environment where it is almost cheaper to swap into a newer vehicle even if you have to pay $1,500 dollars down you don't have all those upcoming expense items. So that is what is happening, you are getting people to go into the showrooms because of the expense of the repairs and the discounting of the product and that is taking away from some other consumer related activity because it is an expensive product. It is a big portion of their disposable income, it costs a lot to maintain and to go forward with and they are substituting to try to cut their costs as much as possible but it is driving up domestic auto sales on the back of that. The counter-balance to that is that aut...
