THE bravado of America’s car industry is typified by the new Ford GT, the biggest star at the Detroit motor show. The superfast hypercar, unveiled on January 13th, demonstrates a self-confidence born of an incredible turnaround since 2009 when GM and Chrysler sought bankruptcy protection, and Ford narrowly avoided the same fate. But the GT also represents an escapist fantasy. America’s booming market has hit a peak, and there will be far more to worry about than going from 0-60mph in a few seconds.
The jovial mood in Detroit may appear reasonable. Sales slumped to 10m vehicles in America in the depths of the financial crisis. The recovery has been swifter than anyone imagined. After gains of over 1m in each of the past four years, car sales hit 16.5m in 2014 the best since 2006. But the turbocharge is at an end.
Analysts and even some carmaking executives reckon that if there are further gains they will be modest for the next few years. Despite cheap credit, cheap petrol and rising employment, car buying has peaked. Pent-up demand from drivers wanting to replace their old bangers is largely spent. Other trends are at work too—young...Continue reading
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