Cold, snowy winter brings hot deals on cars
A used car lot.
It's been a winter of discounts for the car industry, and it's not over yet – neither the winter, nor the discounts. The major manufacturers have announced they're extending reduced prices through the end of March, hoping to lure reluctant buyers out of the house.
And we all thought the car industry was recovering nicely from the economic downturn.
The last four months of 2013 were strong for car sales, particularly pickups and SUVs. But this year put the brakes on that. So when will business return to normal?
"The weather's going have to get a little warmer, number one," says George Magliano, an economist with IHS Automotive. "This winter's killing me here."
It's not just the endless snowstorms and freezing cold that are pummeling sales in much of the country. Magliano says it's also the uncertain economy. Even the Chevy Silverado, recently named truck of the year, has seen inventory pile up.
But Magliano says manufacturers have no plans to trim production. Instead, they plan to keep the incentives going.
"We've got a house cleaning going on here over the next three to four months," he says.
He adds that these incentives aren't hurting carmakers yet. That's because they have been selling their cars at high prices for the past couple of years. So the industry has a cushion -- for now.
Magliano says when spring finally arrives, automakers will find out if they have a longer-term problem.