[Z-man]

Interesting perspective, kaisen.

Here is something I considered which is related to the topic at hand, and you alluded to it in your last post:

Right now, it seems folks are holding onto their cars a bit longer. A couple of reasons for this:
1. The economy. (Maybe I don't need to replace my BMW 7-series every other year -- maybe I can wait 3-4 years...)
2. The cars are built better - even the domestics! (Yeah, the big-3 may be a couple of years behind the Japanese in terms of durability and reliability, but they have increased quality across the board significantly.
3. Unknown future. Those still on 'solid' financial grounds are not sure if they will remain there in the near future.

Ok, so it is a fact that new car sales are down. But when the economy picks up, what is going to happen? I suspect that you will see a resurgance of the auto industry. Perhaps not as soon as 2011, but in 5-10 years, car companies will be selling new cars and making more profits. Why?
1. In a few years, the average age of a car on the road will be 15+ years. At that point, folks will have gotten beyond the depreciation value of the car. IE: their cars will owe them nothing. Then, it will be financially appropriate (from a frugal perspective) for folks to purchase new cars.
2. Less competition. Chrysler and GM are on very thin ice. I suspect that one of those two automakers may fold partically before all this is sorted out. Kia and Hyundai are probably close to the same situation, in terms of the US market. Those car makers and dealerships which remain will have the opportunity to make some money.
3. The auto industry will change - how? Don't know. But with the perception that cars are bad for the environment, car makers are being forced to develop new technologies. While I don't necessarily agree with the whole Al Gore "doom and gloom" camp, whenever an industry is forced to push the limits and develop new technology, that is a good thing. I suspect that in a few years, the fuel cell technology will mature and become a viable means of propelling a car. Hybrids may or may not last long, but if they do, they will be vastly different than what we have around today.
Another change for the auto industry will be revamped product lines. There is too much inner-brand competition. Ex: Honda Fit vs. Honda Civic coupe. Ford Escape vs. Ford Edge. Toyota Corolla vs. Matrix. Mercedes ML vs. GLK vs. GL. As product lines narrow, there will be less processing costs. Or, car makers will find ways to maximize sharing of components between product lines. All these are good things.

So while the car industry is currently in dire straits, I suspect that the future of the car is a bright one indeed...

Just my $0.42,
-Z-man.