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July 1, 2008
How about the scrap metal business?
Here is a business idea. Get into scrap metal business for cars. CIBC has a new report out predicting that $7 gas will cause about 10M cars to be scraped over the next 4.5 years. I agree. Humm, how to capitalize....
A 6% scrappage rate would take roughly 14 million
vehicles off the road every year. For the number of
vehicle registrations to remain constant in the face
of that decline, there would have to be an offsetting
number of new vehicle sales that year. But given their
link to fuel prices, new vehicle sales will be at least three
million below that number by 2012. Our projected 11
mn vehicle sales in 2012 will be the lowest level since
the early 1980s. Summing up the cumulative difference
between new sales and scrappage over that period
suggests that somewhere in the neighbourhood of ten
million Americans will be coming off the road over the
next 4½ years (Chart 10).
Posted by Martin at July 1, 2008 11:02 AM
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