Car sales skyrocketing in Greece
05-13-15, 07:09 AM
#1
Lexus Fanatic
Thread Starter
iTrader: (20)
Car sales skyrocketing in Greece
not for good reasons...
http://www.telegraph.co.uk/finance/e...ing-worse.html
Here is a slightly surprising sign that Greece is in the classic throes of a bank run: car sales jumped by 47pc in April. It was the 20th consecutive month that car registrations of new and used vehicles has risen.
People living in a country gripped by financial turmoil often worry about the security of their money. If it's in a bank, it can be caught up in capital controls or lost through insolvency. Better, then, to spend it. And the purchase of choice is often a car.
This makes motor vehicle sales a decent proxy for financial turmoil (under some circumstances).
Ordinary Greeks, many of whom are not wealthy enough to hold bank accounts outside of the country, are taking their money of the financial system and spending it on "hard" assets.
In December, when snap elections were called in Greece, monthly car registrations soared by nearly 70pc. Since then, bank desposits have shrunk by nearly 15pc of their total value. Another €7bn left the country in April alone.
A similar phenomenon was observed during Russia's financial meltdown late last year. The rouble's crash resulted in many Russians scrambling to make "high-ticket" purchases, including four wheels.
In a strange irony of Greece's woes, German industry is perversely one of the main beneficiaries of the country's banking collapse. Greek consumers, like many of their fellow Europeans, buy German cars more than any other brand.
People living in a country gripped by financial turmoil often worry about the security of their money. If it's in a bank, it can be caught up in capital controls or lost through insolvency. Better, then, to spend it. And the purchase of choice is often a car.
This makes motor vehicle sales a decent proxy for financial turmoil (under some circumstances).
Ordinary Greeks, many of whom are not wealthy enough to hold bank accounts outside of the country, are taking their money of the financial system and spending it on "hard" assets.
In December, when snap elections were called in Greece, monthly car registrations soared by nearly 70pc. Since then, bank desposits have shrunk by nearly 15pc of their total value. Another €7bn left the country in April alone.
A similar phenomenon was observed during Russia's financial meltdown late last year. The rouble's crash resulted in many Russians scrambling to make "high-ticket" purchases, including four wheels.
In a strange irony of Greece's woes, German industry is perversely one of the main beneficiaries of the country's banking collapse. Greek consumers, like many of their fellow Europeans, buy German cars more than any other brand.
05-13-15, 07:58 AM
#2
Lead Lap
Hope Greece comes out of the present predicament.
05-13-15, 08:46 AM
#3
Formerly Bad Co
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Greece is on a downward spiral economically and politically, a very sad development as its people have always earned respect for their rich culture. Although Greece is of course far from an ex Eastern Bloc country, one sees the tendency there as well of buying a car, while cutting seriously on necessities like food and clothing. German cars of course, are very popular and you will see more expensive cars in Prague than in Berlin.
Hope Greece comes out of the present predicament.
Hope Greece comes out of the present predicament.
http://www.cnn.com/2010/WORLD/europe.../greece.taxes/
Its funny you should bring up the eastern block, they are on the contrary. Poland has made a made a miraculous transition to a free market economy. Young Greeks and Spaniards are moving to Poland to pursue their professional careers. Lots of companies such as Facebook, Google, Amazon and dell have made Poland their central European home.
05-13-15, 09:29 AM
#4
Lead Lap
The Grecian problem lies in their culture as much as it lies in their politics. No one wants to pay taxes but everyone wants a cushy government job. Now before you start chasing me with your pitchforks look at the numbers your self.
http://www.cnn.com/2010/WORLD/europe.../greece.taxes/
Its funny you should bring up the eastern block, they are on the contrary. Poland has made a made a miraculous transition to a free market economy. Young Greeks and Spaniards are moving to Poland to pursue their professional careers. Lots of companies such as Facebook, Google, Amazon and dell have made Poland their central European home.
http://www.cnn.com/2010/WORLD/europe.../greece.taxes/
Its funny you should bring up the eastern block, they are on the contrary. Poland has made a made a miraculous transition to a free market economy. Young Greeks and Spaniards are moving to Poland to pursue their professional careers. Lots of companies such as Facebook, Google, Amazon and dell have made Poland their central European home.
Poland is the one ex Eastern Bloc country I haven't visited lately, but I have no particular critique against any of those countries.
Back to cars, I do agree with Bitkahuna that a sudden upsurge in car sale can indicate some nervousness amongst consumers. Seems that most people don't care about the fact that a car might be a very bad investment. I myself know it too, but what the h..., you only live once.
I can only imagine the German carmakers having a lot of headaches to dream up new projects for all the money flowing in - otherwise Angela might have some use for it as tax money.
05-13-15, 11:10 AM
#5
Lexus Fanatic
Originally Posted by nipponbird
Although Greece is of course far from an ex Eastern Bloc country, one sees the tendency there as well of buying a car, while cutting seriously on necessities like food and clothing.
Hope Greece comes out of the present predicament.
05-13-15, 01:18 PM
#7
Lexus Champion
Well, as an auto enthusiast myself, I can understand the desire to have a new car (and not just something on four wheels that is just basic transportation). But, as with most other things in life, common sense and some restraint has to be used. Why spend money on a car if that money is needed elsewhere, for personal or family reasons? If one can afford both........fine, go for it. But the family and life's necessities have to come first. Yes, in some societies and places, a car is more or less a necessity....especially if one cannot live close to to the job, or if public transportation is limited. But, again, if one can afford a new upmarket vehicle, fine. Otherwise, he or she would be better off looking at the smallest and/or least-expensive vehicle that they and their families can afford.
The Greeks (and the Russians earlier) are not buying new cars because they are a necessity; they are buying new cars because it is a hard asset that is much safer than leaving it in the bank.
If your money is in the bank but the bank or the value of your currency collapses (as was happening to the Ruble), you have lost your savings. Better, then, to park your money in a hard asset that can be easily traded for cash later (if needed), like a car.
There are probably very few hard assets that are as available to most of the Greeks as a new car. Houses are too expensive to purchase outright and trading it later for cash is more difficult than selling that nice German car.
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05-13-15, 01:24 PM
#8
Lexus Champion
Ethan Hunt (aka Tom Cruise) and the Impossible Missions Force is going to save Greece?
That may be better than what the real IMF (International Monetary Fund) would do.
05-13-15, 01:29 PM
#9
Lexus Fanatic
Originally Posted by Sulu
The Greeks (and the Russians earlier) are not buying new cars because they are a necessity; they are buying new cars because it is a hard asset that is much safer than leaving it in the bank.
If your money is in the bank but the bank or the value of your currency collapses (as was happening to the Ruble), you have lost your savings. Better, then, to park your money in a hard asset that can be easily traded for cash later (if needed), like a car.
05-13-15, 02:32 PM
#10
They do have such a scheme that covers deposits up to 100,000 Euros, however if the ultimate guarantor - in this case the Greek Government - don't have any money either then you're stuffed.
05-13-15, 02:52 PM
#11
Greece is on a downward spiral economically and politically, a very sad development as its people have always earned respect for their rich culture. Although Greece is of course far from an ex Eastern Bloc country, one sees the tendency there as well of buying a car, while cutting seriously on necessities like food and clothing. German cars of course, are very popular and you will see more expensive cars in Prague than in Berlin.
Hope Greece comes out of the present predicament.
Hope Greece comes out of the present predicament.
Also, Greek GDP and employement numbers are worse than almost all of EU eastern europe countries.
And fun fact, right now best selling car is Toyota Yaris, best selling brand is Toyota for Q1 2015, 2nd is VW and 3rd is Nissan.
So this is definitely not Germany situation where you have BMW, Audi and MB models in top 10 every month. Best selling top 10 vehicles are small cheap cars - Yaris, Micra, Polo, Corsa, I20 and 208, in that order.
05-13-15, 07:27 PM
#13
Lexus Champion
The bank account may be depreciating faster than the value of the car -- here one day and gone the next. If they left the money there and suddenly the government freezes all accounts or banks suddenly collapse, there is nothing left.
When you can no longer trust the institutions -- the banks, the government -- it is time to take your money into your own hands and put it somewhere where it is not in a big institution. What could be easier than buying a car?
05-13-15, 07:34 PM
#14
Lexus Champion
When the government (or another, lending government) has to call in the IMF (the International Monetary Fund, not Tom Cruise), things are in really desperate shape. The conditions they impose are drastic. It is not surprising that there is a run on the banks.
At least Greece is still in the strong Euro but if the rest of Europe is successful in kicking them out and Greece has to start using their old currency again, they will be in even worse shape (see what happened to the Ruble?).
05-13-15, 09:05 PM
#15
Lexus Fanatic
Thread Starter
iTrader: (20)
until recent tepid 'reforms' 1/3 of the Greek population 'worked' for the government, mostly in 'make work' worthless 'jobs', of course with great salaries and benefits and pensions. when reforms were implemented and some govt jobs went away, of course the party in power was kicked out and the socialists now run things, as they promised to stop the 'austerity measures' - meaning they want to allow greece to continue to operate as a fiscal drunk, spending OPM (other people's money) namely, the rest of the EU.
greece lied to get in the eu, and once in, used new borrowing powers to spend like drunks with no hope of paying it back. finally the rest of europe said 'wait a minute' but they didn't know just how big a hole greece was digging (with shovels and excavators paid for by 'real' economies, like germany and the uk).
when germany lead the charge to drive a hard bargain to push greece to change its spending ways, there's the usual cries of how 'austerity' stifles economic growth. seriously? how about lazy people, high taxes (for those that are honest), corruption, and fiscal madness stifles economic growth?
eu should excise (cut off) greece immediately. meanwhile, back to this article, the greeks know the party's over and they could soon be completely broke, so might as well get a new car!
greece lied to get in the eu, and once in, used new borrowing powers to spend like drunks with no hope of paying it back. finally the rest of europe said 'wait a minute' but they didn't know just how big a hole greece was digging (with shovels and excavators paid for by 'real' economies, like germany and the uk).
when germany lead the charge to drive a hard bargain to push greece to change its spending ways, there's the usual cries of how 'austerity' stifles economic growth. seriously? how about lazy people, high taxes (for those that are honest), corruption, and fiscal madness stifles economic growth?
eu should excise (cut off) greece immediately. meanwhile, back to this article, the greeks know the party's over and they could soon be completely broke, so might as well get a new car!