The Auto Industry Has Hit a Worrying Peak, Doug Kass Reveals 8 Telling Reasons Why
The auto industry is about to feel some pain.

Doug Kass shares his views every day on RealMoneyPro. Click here for a real-time look at his insights and musings.

Did I Mention I Think We're Seeing Peak Autos?

It has been nearly a year since I first delivered the then-unpopular message of Peak Autos.
Here is a summary of the core arguments for Peak Autos and why auto manufacturers' stocks like Ford ( F) and General Motors ( GM) still may be value traps despite their apparent low valuations:
1. Car companies are offering the largest incentives on price in years.
2. The automobile inventory-to-sales and days-to-turn-sales ratios are back to elevated 2008 levels.
3. Used-car prices (the Manheim Index) have steadily declined.
4. A record level of autos are going off lease and will return to and further depress the used-car market.
5. After years of subsidized, low-rate auto loans, the consumer is spent up, not pent up, as car sales have been pulled forward.
6. Subprime auto loan delinquencies are ratcheting higher, and some auto lenders are turning away from the market.
7. Managements have poorly prepared for the auto down cycle.
8. The risks of protectionism and trade wars have recently increased.

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