ctober was a great month -- if you
sell cars. General Motors' new car and truck sales rose a record
31% in October over the same month a year ago. Sales of those big,
expensive SUVs were up 63%. It was GM's best month in five years.
At Ford, the increase was 36%, as October vehicle sales bested a
monthly sales record that had stood for 24 years. At Ford's Mercury
division, sales were up 60%. And we're not talking compacts here,
either. Sales of the big Mercury Grand Marquis doubled.
Heavily promoted 0% financing had a lot to do with all of this,
clearly. Even so, the news on the financial pages suggests that,
even with unemployment reaching a new five-year high, American
households still have money to spend.
Unfortunately for the travel industry, they apparently feel
better about spending it on cars than on cruises and tours. Record
car sales also mean that a record number of American families,
maybe a million households, took on a new car loan in October. Even
with generous financing terms, does this mean there will be less
disposable income available for travel?
Is the good news in Detroit bad news for travel? We are of two
minds: long-term and short-term. Taking the long view, there's no
evidence that people buy cars instead of travel; only that they are
buying one and not the other. Even with a new car in the garage,
people will travel. They have before, and they will again. In the
long run, travel will get its share.
On the other hand, people may be less likely to spring for a big
vacation in the immediate future if they've just taken on a new
financial burden. Maybe agents could hedge their bets by grabbing
some brochures and heading over to the local car dealership, where
the salesmen surely have money to spend on vacations -- if they're
not too busy.
Just don't let them sell you anything.