{"id":316939,"date":"2026-03-07T02:16:20","date_gmt":"2026-03-07T02:16:20","guid":{"rendered":"https:\/\/www.newsbeep.com\/nz\/316939\/"},"modified":"2026-03-07T02:16:20","modified_gmt":"2026-03-07T02:16:20","slug":"the-car-market-cant-afford-a-global-recession-right-now","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/nz\/316939\/","title":{"rendered":"The Car Market Can\u2019t Afford A Global Recession Right Now"},"content":{"rendered":"

This is probably the year the car market turns it around. I don\u2019t see a huge positive sales swing. We\u2019re not going to hit SAAR 17 million at any point. It\u2019s just that stability finally seemed at hand. There was the pandemic, the chip shortage, the rush to make EVs, then the crash of a new administration and tariffs. The car market has sort of felt like that episode of The Simpsons with Sideshow Bob stepping on a series of rakes<\/a> spread out in all directions. That\u2019s all over, right?\u00a0Natalie Portman Face:<\/a> Right?<\/p>\n

The War in Iran, or the limited police action<\/a>, or whatever, is the next rake. Will it be fine? It\u2019ll probably be fine. I could predict a recession in every Morning Dump, and eventually I\u2019d be right. Mostly, though, the economy has done a pretty good job of pushing forward. Even a middling year would probably be alright for the car market.<\/p>\n

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A global recession, though, would wreak absolute havoc on an industry that keeps getting knocked down and can only get up so many times. Already, the owners of F1 are taking it in the shorts as they\u2019re having to potentially delay or cancel numerous races due to the, uh, organized kerfuffle in the Middle East.<\/p>\n

Stellantis is one of the companies most at risk in this situation, and one longtime company leader has left the company. Toyota is, too, but Toyota is probably in a better position and is trying to strengthen its supply chain by purchasing a chipmaker.<\/p>\n

What Happens If The Economy Looks Down?<\/p>\n

The fact that I keep invoking cartoons in my argument is probably a reflection of the kind of mature, thoughtful analysis you can expect if you are first time TMD reader. My number one, most used reference is to that moment in a Roadrunner cartoon when the character Wile E. Coyote runs off a cliff. In the strange gravity of the universe, the Coyote doesn\u2019t fall until he looks down. It\u2019s not the gravity that kills you; it\u2019s the acknowledgement of gravity that comes before the fall.<\/p>\n

That\u2019s roughly how I feel about the current economic situation relative to the car market. A record number of buyers have negative equity on their cars<\/a>. Sales are slowing down a little. Affordability is a concern. There\u2019s now $1.59 trillion of automotive debt out there<\/a>. That\u2019s all scary, though it isn\u2019t exactly new. This happens from time to time, and it\u2019s not usually fatal. It probably won\u2019t be fatal in this case. It\u2019ll probably be fine.<\/p>\n

A few bad things can happen, and we\u2019ll get through them. The trick is, all the bad things can\u2019t happen at once. The fact that gas prices have risen the most in the last four days since Hurricane Katrina is bad<\/a>, but gas prices aren\u2019t close to a peak. The economy is losing jobs<\/a>, and unemployment is up. That happens sometimes, too.<\/p>\n

I think the question to consider is how long this lasts. If this is, erm, strategic intervention is limited, it\u2019s probably fine. No one looks down. The economy is not dragged into the bottom of the canyon. If it lasts longer, though? What happens next is a little harder to predict. Analysts at equity research firm Bernstein have some thoughts, via\u00a0Automotive News<\/a>,\u00a0and they propose three possible outcomes:<\/p>\n

There is direct disruption to sales inside Iran. There is disruption to vehicle deliveries throughout the region, affecting wider shipments and sales at international players.<\/p>\n

Big regional sellers such as Toyota or Hyundai could feel this pinch. So might producers of exotics and high-end sports cars, such as Ferrari.<\/p>\n

Finally, there is disruption from rising pump prices, due to interrupted oil tanker movement through the Strait of Hormuz. Higher crude prices could negatively affect automakers such as Stellantis, which are heavily invested in internal combustion powertrains.<\/p>\n

[\u2026]<\/p>\n

\u201cAgainst this backdrop, the ongoing conflict highlights the potential magnitude of disruption,\u201d Bernstein wrote. \u201cBy far the biggest risk is that a prolonged war continues to drive up oil prices and undermine confidence in the global economy, crashing auto sales well beyond the Gulf.\u201d<\/p>\n

Obviously, if you sell cars in Iran or rely on moving your exotics in the Middle East, that process might be disrupted. If you rely on shipping stuff through the Strait of Hormuz, that\u2019ll be pretty annoying, too. The biggest risk in the United States, though, is that the confidence goes away. That we all look down.<\/p>\n

If that happens, then all those people with upside-down cars can\u2019t make car payments on cars that will, suddenly, lose value. The current plan of pushing out a lot of cars with gas engines, as Stellantis is planning to do with the return of V8 engines, is a lot harder to pull off if gas prices are high. Carmakers like VW are already short on cash, and any borrowing in order to change directions is going to get tougher.<\/p>\n

The car market needs a boring year.<\/p>\n

What\u2019s F1 Going To Do?
\n\"Yas<\/a>Photo: Newspress<\/p>\n

The expansion of the Formula One calendar has taken place primarily in the United States and the Arabian Peninsula. This year, there\u2019s Bahrain, Abu Dhabi, Qatar, and Saudi Arabia. Hell, this weekend\u2019s race in Australia is the Qatar Airways Australian Grand Prix.<\/p>\n

For reasons both financial and aesthetic, the expansion of racing in the region makes sense. While plenty of new fans are here for the incredible cars, talented drivers, and the drama of racing, for some, it\u2019s just another Instagram backdrop. The whole illusion of wealth created by people posing in grounded private jets, drinking champagne against one of any number of supposedly \u201csafe\u201d urban backgrounds.<\/p>\n

The illusion of safety has been pierced, and it would be unwise to have a race there\u00a0right now. This is having a big impact on the company, as\u00a0Bloomberg<\/a> reports:<\/p>\n

Liberty Media Corp.\u2019s Formula One has seen $1.9 billion wiped off its market value since the Iran war began, as concerns about races in the Middle East weigh on one of the world\u2019s most popular sports.<\/p>\n

The new F1 season begins this weekend in Melbourne, Australia, the first of 24 races in 2026. Uncertainty surrounds two races next month in Bahrain and Saudi Arabia, with the conflict ramping up across the region. The Qatar and Abu Dhabi grand prix are due to round off the season toward the end of the year.<\/p>\n

Shares of Liberty Formula One, the vehicle that owns the competition, have dropped over 7% in New York so far this week.<\/p>\n

As always, against the backdrop of real human suffering, share prices aren\u2019t really that important, but it\u2019s yet another reminder that we all share oxygen on a little ball that is negligibly small in the vast ocean of space.<\/p>\n

Chrysler CEO Leaves Company To \u2018Focus On My Family\u2019
\n\"Christine<\/a>Photo: Stellantis<\/p>\n

When I took this job, it was partially to focus on my family. The whole filmmaking thing was so much fun, and I\u2019m grateful I had the chance to do it, but my kid is only going to be a kid for so long and being on the road that much sucked. I\u2019m so lucky that The Autopian launched when it did and that I was invited to come along for the ride.<\/p>\n

So I try not to be suspicious when people say they leave a job to focus on their family. It happens! That\u2019s what Chrysler and Alfa Romeo North America CEO Christine Feuell told the\u00a0Detroit Free Press<\/a>:<\/p>\n

Feuell told the Detroit Free Press she is leaving the company with \u201cimmense gratitude,\u201d saying she left to spend more time with her family.<\/p>\n

\u201cMy decision to leave Stellantis was not easy but I needed to step away to focus on my family,\u201d Feuell wrote in a message. \u201cI leave with immense gratitude and complete confidence in the talented team that I had the privilege to build and work alongside.\u201d<\/p>\n

There are more important things than work.<\/p>\n

Toyota\u2019s Denso Unit Might Buy A Chipmaker
\n\"Denso<\/a>Photo: Toyota Gazoo Racing<\/p>\n

Toyota has been on a bit of a buying spree lately as it spends cash to try to take control of more of its operations. This stuff is not as exciting as winning on Sunday if you\u2019re a Toyota fan. However, there\u2019s no sell-on-Monday if you don\u2019t have the parts to make the cars.<\/p>\n

The latest venture from Toyota is an attempt to buy Japanese chipmaker Rohm.<\/p>\n

Per\u00a0Nikkei Asia<\/a>:<\/p>\n

If the deal materializes, the two companies would be a major force in Japan for power semiconductors, which are used in electric vehicles and data centers.<\/p>\n

The proposal was apparently made in February or earlier, and Rohm has set up a special committee to discuss whether to accept it. If Rohm rejects the proposal, Denso may proceed with a hostile takeover bid.<\/p>\n

Denso commented Friday on its proposal for Rohm, stating, \u201cwe are considering various strategic options including the acquisition of Rohm shares.\u201d The company also said no specific decisions have been made at this point but that it will \u201cpromptly disclose any material facts that are decided to be disclosed.\u201d<\/p>\n

Seems like a smart buy to me.<\/p>\n

What I\u2019m Listening To While Writing TMD<\/p>\n

Peter said this song, \u201cIt\u2019s A Miracle\u201d by Culture Club, was stuck in his head, and it\u2019s amusing to me to keep it there. Also, it\u2019s a bop.<\/p>\n

The Big Question<\/p>\n

Where would be the worst race track currently in existence to have an F1 race right now?<\/p>\n

Top graphic images: Jeep; The Autopian\u00a0<\/p>\n

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