It’s not only the used car dealers that are suffering. Every facet of the auto business is feeling the heat. Credit is tight, meaning prospective car buyers will need a better credit score if they want a car loan. On top of this, consumer uncertainty and economic woes are persuading consumers to hang onto their old cars a bit longer than they normally would.

The results have been nothing short of devastating. Used car dealers have seen about half as many customers on showroom floors this year, according to The New York Times. Industry insiders and experts don’t expect a miraculous turnaround, either. Ford Motor Co. execs are predicting industrywide December sales numbers to drop by 35% from last year. And they don’t expect the first quarter to be a lot better.

December was especially brutal to General Motors as well. GM posted a 2008 U.S. sales drop the likes of which has not been seen in 49 years, dragged down by a 31% drop in December. With 2008′s numbers now officially in the books, GM’s total sales of 2.95 million cars was the least the company has posted since 1959, according to Automotive News.

The industry is, indeed, in turmoil. But there’s one company in the auto biz that’s prepared to weather the storm. And when business as usual finally returns, this industry leader will emerge stronger and more profitable than ever before.

In a recession like this one, consumers put off the purchase of big-ticket items like appliances, furniture and, of course, cars. This company is in no way immune to consumer tendencies. As consumer confidence returns, however, we can expect this business to return to an annual growth rate that’s well in the double digits.

So are we crazy to bet on a car dealer in the midst of this painful downturn? Click the link below to join our readers at Penny Stock Fortunes and decide for yourself…

Best,
Greg Guenthner

January 15, 2009

Buying the Auto Industry when Everyone’s Selling was originally featured in the Penny Sleuth.