According to an article in the Dallas Morning News new car and truck sales in the Dallas-Fort Worth area dropped 13.8 percent in 2008. Car sales nationwide were down 18 percent in 2008, so Dallas-Fort Worth actually faired better than the national average. But the nearly 14 percent drop in car sales are the worst Dallas-Fort Worth has seen in over 10 years.
Not surprising news, since the automobile industry is fueled by the free flow of easy credit. But with the rise of foreclosures , bankruptcy and the current credit freeze many Dallas-Fort Worth residents are simply unable to find the cash or credit to pay for a new automobile. The automobile industry became fat during the housing boom, expanding on a consumer base that had an seemingly unending supply of credit; but now that the credit is gone so are the customers. Could we see a huge contraction in the automobile industry in the coming year as more individuals face job losses? Will automakers face bankruptcy as dealerships face decreasing demand and sales? And what about all of the vehicles with car loans that are in default, how many will be repossessed as the owners face their own set of financial problems including foreclosure and bankruptcy?
We can expect to see many car dealerships go bankrupt as consumers hold back on purchasing new vehicles. We may even see the bankruptcy of an automaker as tough economic conditions sift out those who have failed to adapt.