timwest
Long

USA Population is up 50% since 1976 but not Auto Sales

FRED:ALTSALES   Light Weight Vehicle Sales: Autos & Light Trucks
742 12 18
When we look at auto sales, do we adjust for the number of people in America?

If you see the lower chart, you can see we are just over the trend in Light Vehicle sales. The trend is 16 million and we hit 18 million and backed off to 17 million recently.

It sure looks like the number of cars sold "per person" in the USA is down dramatically over the last 40 years, which means there is plenty more upside potential in auto sales.

These are more tools are available for you at TradingView in the "Economic Data" section that you can graph. Graph and learn.

Tim

12:16PM EST 9/12/2016
Comment: A year has gone by and the negative forecasters and analysts probably wished they had looked at this long term data I posted back then: Auto sales are up and this is despite the fact that lending has been cut back by sub-prime sources. The job market remains strong and the hurricane season was also a monster which destroyed hundreds of thousands of cars this year. Either way, the trend is up. People need cars to get to jobs and financing will be provided to people who need basic transportation. $GM was recently at an all time high, among others. For more sharp insights, keep using TradingView's powerful data and graphing technology.

Dec 3rd, 2017 9:20PM EST
Comment:

Commenting and updating 4 months later: still holding high.
Comment:

I made a "mid-point" base of 1976-1986 to get a new calculation so it isn't "as bad" as previously mentioned.

Cheers.

9:34AM April 17, 2018
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Auto sales on average have gone up 25% with doubling of the population therefore, the correlation in car sales is weak with respect to population. Also, note that the standard deviation (variation around the mean) are large, a swing of 6 million in car sales on a mean of 15 million in sales. therefore , the betting on car sales are better close to the extremes... or to go with potential winners as technology shifts are happening... Best bets in car are VW (VLKAY) and GM at this time.
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mazdaki mazdaki
Correction by Mazdaki.... The correlation between population and New car sale is shown by the graph to be 2 to 1 (50% increase in car sale results in 25% increase in new car sales).... but the problem is that the new car sales varies more with other factors: especially economic factors where the variation in car sales is about 6 million units from the mean of 16 million.
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Where do we short this?
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i think thats because revenu are less than 40 years ago

http://www.economicgreenfield.com/2011/09/14/u-s-real-mean-household-income-growth-chart-1967-2010/
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timwest felix997
@felix997, Good point for sure. Income has been weak. And probably weaker if the real inflation rate was shown. Most economists argue that inflation has been under-reported for well over a decade. Cars last longer, are more reliable and get better gas mileage, so those factors help the cost of a car as a percentage of income per year to be flat to down over the past 20 years. It's time to keep pushing for more efficient vehicles through incentives to turn in gas-guzzlers.
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Did you account the use of resold cars? I assume all purchases throughout times are contributing to the further repurchase - i wonder if that is playing into this stat. If the amount of actual Buys are stable and relative to the population growth, its just not new cars anymore
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@2use, More data would certainly give us more info. I see so many bearish forecasters being very negative about the prospects for auto sales, but not considering that lenders are still making loans to new buyers and not factoring in that car sales are still low relative to population. I also think that Trump wants to get the economy going again, and he may eliminate the automobile sales tax for cars on a scale under the annual median income. Eliminate dual sales tax on cars that are used also. It doesn't make sense for states to collect taxes on cars when they are re-sold. So wrong.
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With great data we should unearth great conclusions and insights. From this regression, you can see that 16 million is the "central tendency", which should slowly rise over time and should rise even more when you factor in population growth.
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Insightful..thanks for highlighting the Data section. Useful tools in there
+1 Reply
timwest Bwstrading
So many amazing tools.
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