Consumer spending in all of the Federal Reserve Bank’s 12 districts saw an uptick, according to the Jan. 16 Beige Book. While holiday sales were slightly higher than in 2011, they were slightly below what the Fed’s district contacts had expected.
Ten districts reported steady or stronger auto sales since the previous report in November. Richmond, Atlanta, and San Francisco had strong sales, while New York and Dallas were mixed but “generally positive.” Kansas City sales slowed, but were higher year-over-year. The outlook on future sales from many auto dealers across the districts remains positive, though dealers expect dimmer sales as consumers spend carefully due to the continuing fiscal uncertainty.
Auto lending strengthened in the Cleveland, Atlanta, Chicago, Dallas, and San Francisco districts.
The next Beige Book will be released March 6.
These captive programs ruin the benefits of leasing for lessees and lessors alike. This is proven through multiple cycles going back more than 20 years. As a pioneer in the auto lease segment, we see the long term effects of these programs and that they ultimately led to our withdrawal from the segment and act as a barrier to re-entry. Take note, the Toyota and Honda models covered with these programs will see noticeable reductions in their future residual values–that is a shame as both makes have a history of stable residual values.
It is hard to imagine the other manufacturers not following with similar programs. I guess we will see 12+ million new cars sold this year after all.