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The founders of the carpooling app, Lyft, filed their IPO file last week and their vision of the company is dramatic. Lyft (which works a bit like Uber) is not just about bringing you from A to B, they say. On the contrary, the founders Logan Green and John Zimmer believe that car ownership is in permanent decline and they want to help him die, they write in their S-1 record.
"We think the world is at the beginning of the shift from owning a car to a transportation system as a service, or TaaS." Lyft is at the forefront of this massive societal change. , they told investors. "Access to the car … has weighed heavily on the consumer. US households spend more on transportation than on anything other than housing. … On an individual basis, the average annual expenditure on transport is more than $ 9,500, the vast majority being spent on transportation. the possession and operation of a car. "
Cars create an "inequality", they argue. "The average cost of a new vehicle in the United States has risen to more than $ 33,000, an amount that most US households can not afford," says the BPI. "We estimate that more than 300,000 Lyft pilots have abandoned their personal cars because of Lyft."
They may be right.
If there is a historic moment when the automobile industry is riding, that's fine.
For example, in January, car sales in Britain decreased by 18.2% to 1.49 million vehicles per year.
It was the eighth successive months of decline, according to SMMT, the industry body that tracks automotive data.
The group blamed Brexit. "The clear and present danger remains the threat of a" no agreement "Brexit, which monopolizes time and resources and undermines competitiveness," said Mike Hawes, CEO of SMMT.
This is not just the Brexit, of course. There has been "weaker demand on both the UK and the major export markets," SMMT said. In fact, car sales in Britain have been falling since 2017.
A drop of 18% seems catastrophic, but it is moderate compared to what is happening in Turkey, where consumers have reduced their car purchases by 60% since January 2018, according to data collected by the analyst. UBS, Gyorgy Kovacs and his team.
Turkey, of course, is in deep recession due to the collapse of its currency, read it. GDP growth for 2019 is expected to decrease by -2.9%, predicts Kovacs.
Although extreme, Turkey can be considered a witness. Today's cars last so long that, if times are tough, consumers can simply stop buying new cars and hear perfectly with their old cars. Turkey proves it.
The United Kingdom and Turkey may be struck off as special cases. Most countries are not dealing with Brexit or the crisis of the reading. But it turns out that "special cases" are now the rule and not the exception for the automotive industry.
Here is the data for cars for the whole euro area, the 19 countries of Europe using the euro as currency, provided to Business Insider by Lazard Asset Management. Car sales are down:
The shape of this chart resembles that of the next one, that of HSBC, which tracks total car registrations in the United States, indexed for 2011. The data was collected by HSBC analysts Janet Henry and James Pomeroy. This picture is surprising because, for decades, Americans have viewed their car as an extension of their cultural identity.
And yet, they do not want them as they did before:
Europe and America have clearly stepped back from buying cars. This graph shows sales of new tires on new vehicles – a directional indicator of car sales – indexed to a starting point in 2006. It comes from David Lesne, an analyst at UBS, and his team. After the 2008 financial crisis, tire sales rebounded, especially in the United States. In Europe (blue line), sales fell sharply in 2013 before continuing to fall. In North America (brown line), it appears that the downward change occurred in 2017:
New car sales recently peaked in the United States. But this year – 2019 – they suddenly plunged. Auto sales declined 1% in February and 3% in January, according to JD Power and LMC Automotive. More than 7 million Americans have recently committed a "serious delinquency" on their car loans, a new high since the financial crisis, according to the Federal Reserve Bank of New York.
Finally, here are the data on tire sales in China. New tires and replacement tires plunged into the world's second-largest economy:
Worldwide, employment is breaking records. The Chinese economy continues to grow at a rate of 6% per year. There is wage growth in most western economies. Consumers should be very confident in buying new cars. Still, the auto sector is behaving as if it were already in recession, with mill closures and thousands of layoffs worldwide.
This is worrying for observers of the recession.
Cars are so important that they can have a macroeconomic effect on the economy.
Germany and Britain are the Straits of Europe. They depend on each other for parts, manufacturing and sales. However, because of Brexit, the relationship is collapsing. Britain's departure from Europe will erase GDP growth, regardless of the quality of a trade deal that Prime Minister Theresa May can obtain. But Germany will also lose, because logistical and fiscal obstacles stand between it and its main partner in car manufacturing. According to Reuters:
"A Brexit without agreement … would drive up UK import tariffs for German cars by about 10%." For heavy trucks and vans, fares up to 22% s & # The combined impact could reduce it by as much as 0.7 percentage points of German long-term gross domestic product (GDP) growth, show separate estimates of Commerzbank and the Ifo Institute. "
A serious Bloomberg article recently claimed that the popularity of carpool services, such as Uber and Lyft, was at the root of the decline. Business Insider has already supported this case. Uber has practically admitted that he wants to end private cars driven by humans to the benefit of a driverless fleet, ending 40,000 jobs in London alone.
The guys from Lyft are right. Automated and driverless transportation services will likely reduce the demand for cars in the future.
It is hard to say whether the auto sector suffers from the fact that the global economy is weakening or the slowdown in the economy is hurting cars.
Either way, it's not good. We are at the end of an era.
Buckle your belt. We will have a bumpy ride.
The failing auto industry is pushing us into a global recession
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According to Morgan Stanley, the UK automotive sector has "exactly the same problems" as the mortgage market 10 years ago.
The British suddenly stopped buying cars
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