Roughly six million auto borrowers with shoddy credit scores are at least 90 days late on making their loan payments, according to new figures released by the New York Federal Reserve. The percentage of delinquent subprime auto loans has raced to the highest level since 2010.
Since the end of the Great Recession, there’s been an explosion of auto loans, growing to more than $1.1 trillion. That, along with a far stronger economy, has helped fuel a boom in U.S. auto sales.
While Detroit’s sales slowed down earlier this year due to rising prices, General Motors (GM) and Ford (F) on Thursday said sales accelerated in November. The industry is now back on track for record sales in 2016. It could be the eighth-straight year of increases.
But part of those sales may have been fueled by easy availability of credit for borrowers with poor credit, who are evidently now struggling to pay off those loans.
“We need your help,” Tesla wrote in a Feb. 19 e-mail to its customers in Indiana. The state legislature was about to move forward with a bill that would have forced the electric-car maker to find a franchisee to operate its one showroom in the state, setting a precedent that would make it harder for Tesla to open others elsewhere. The company claimed the legislation reflected the interests and influence of one rival: General Motors. “Don’t let GM tell you that your only option is to buy a car from a traditional franchised dealer by shutting out Tesla,” the e-mail continued. Tesla asked recipients to contact their lawmakers.
General Motors, which has recalled nearly 29 million cars globally so far this year, is pushing back against critics clamoring that it should recall another 6 million pickups and SUVs for a problem with brake lines.
GM says the problem with the brake lines is due to normal wear-and-tear on vehicles that are all at least 10 years old, and that the problem only occurs in the so-called “Salt Belt” where corrosive salt is used on the roads during the winter.
She’s lived and breathed GM most of her life. She’s worked there since age 18. “I was on the line…all day long,” the now first female CEO of a major american automobile company recently told “Fast Company” Editor-at-large Jon Gertner over tea. Here’s a look into how Barra will lead GM.
If I were more of a betting man, I’d wager that Mary Barra is a very clever poker player.
How would I know?
A few weeks ago, Barra–the newly appointed General Motors CEO–came through New York City on business and met me for coffee one afternoon in Greenwich Village. (Actually, Barra ordered tea.) If she had any inkling at the time that a big promotion was coming down the road, and that she’d be named the first female chief executive of a major American automobile company, there was no telling.
Instead, the conversation veered from talk about GM’s big cars (the new Cadillac) to its spunky smaller models (such as the Chevrolet Sonic). We took detours into the company’s view on the future of the Chevy Volt (still very positive) and spent a few minutes circling around whether GM perceives a market in tiny, low-impact, city transportation vehicles (entirely plausible).