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Edmunds.com Chief Economist Lacey Plache on why a lack of a fiscal cliff deal could benefit auto sales in the long-term.
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Call -- President Obama visiting a Michigan auto plant today discussing the fiscal crisis -- my CNET here.
But our next guest argues in the long run we could see strong auto sales if there is no deal little mining is now is Lacey plus -- Edmunds dot god chief.
Economists -- good to see is so how would we be better off if we go over the fiscal -- at least in auto sales.
Well and we're better off because we're taking hard medicine now so it's the whole pain vs suffering if -- do we want pain now.
And then we're better off later -- do -- to suffer for awhile.
And not be as well off later and it basically we have a lot of a lot of fiscal -- pixel fiscal -- -- rosy -- -- -- -- have to have a not really.
Yeah if we get -- a stronger growth path by taking more hard medicine now.
Then got as well for the entire economy including -- -- OK so you are basically worried about a copper -- not compromise is not gonna solve anything right.
Yeah how or or worse something that just extends the uncertainty.
It doesn't really compromise anything -- there's no compromise at all because that's what's really killing us right now is that.
What we're just plagued with his vast amount of uncertainty businesses are almost paralyzed right now in terms of they're afraid to before with hiring with investing.
This in -- is paralyzing the whole economy really in terms of being able to move forward.
Well how many folks do you think are really postponing auto sales because of concerns about the fiscal cliff because I don't.
I don't hear a lot of people on -- you know here in Manhattan say I'm not gonna buy that because of the fiscal cliff.
At this point we're not seeing a lot of that auto sales have been really strong this year including the fourth quarter we we've seen.
You know just record numbers post recession.
And or looking for really strong year with fourteen point four million or even fourteen point five million to finish and this'll be our strongest year since pre recession while.
Now -- in her case sandy.
I don't know if -- I saw one figure that behavior might have cause the loss of 250000.
Cars.
Of course not all of them will be replaced but most of them will -- I I -- that's.
Into it's it's an awful way to get it but it's a boost for the auto industry right.
Absolutely -- you imagine about the third of the cards will be replaced the minimum will be new cars.
We're looking at a really nice -- to sales and and the thing is is because -- cars.
Had they been -- and their normal cycles wouldn't have all come at once you're not really taking a big piece out of any future.
My cycle so it definitely -- nice silver lighting products sales in the short run.
-- let me just ask you one more question about Chrysler a company that we result we have to -- -- because it was important keep it and an American car company will of course now it's an Italian car company.
And the Italian the parent company Fiat is going through awful times I mean they're bleeding like this live in Europe.
Because -- -- or is there any possibility I know they're not supposed to do this but is there any possibility that the Italians -- creative accounting and everything will.
Will pull some of the profits that they're making from Chrysler here and use them -- -- to pay out to the parent company in Italy.
But -- the possibilities are always there I mean certainly you're talking about a global company.
And C extended you're doing better in one market than others there's always admitted though that shifting around to boost up your weaker spots.
That you at this point I think North America for for all of the automakers has really become a strong point.
And hopefully we can move forward -- resolves some of the underlying uncertainty.
And is going to -- strong 2013 in terms of modest sales.
-- well again Europe US may be doing well but Europe is doing terribly right now -- Flock he had his dot com chief economist -- thank you very much good to see at least one area -- well.
