One week after the U.S. government debt has been downgraded by Standard & Poor's, credit remained both affordable and available for the vehicle industry. However, consumer confidence remains a major worry even if the vehicle manufacturers state that they will stay on-track in terms of sales and production for the rest of the year.
In an informal online survey conducted by Automotive News of vehicle dealers in the U.S., at least 70 percent of the 372 respondents stated that based on their floor traffic and sales, consumer confidence is low. One respondent shared that “the phones have stopped ringing.”
Another responded stated that several customers have said that they will be holding off on purchases due to the drop in stock market. Don Johnson, U.S. sales boss at General Motors, informed analysts last week that consumer confidence is currently “pretty fragile” and that it has been “ebbing and flowing throughout the year." However, he further stated that “there is continuing pent-up demand in the market."
On the other hand, Nicholas Stanutz, who is Huntington National Bank's senior executive vice president in charge of auto finance and dealer service, commented that consumers are “skittish,” stating that what’s likely to change is consumer confidence. He added that the stock market is “deteriorating, eroding wealth.”
Also, he stated that the economy is vulnerable and there is a "much higher probability of a double-dip now,” and as a result, car sales will drop. On another note, Subaru of America’s COO Tom Doll commented that the market dip "appears to be an overreaction to the downgrade." He added that as of this time, he does not believe that this is going to affect their sales or production plans.