Things have gotten so bad out there that even a used-car retailer is handing out pink slips. CarMax
Remember when a used-car dealer was supposed to weather the storm of a softening economy? Potential new-car buyers would instead opt for cheaper resale rides. Unfortunately, that theory was shot to bits last week, when CarMax posted horrendous quarterly results. Revenue fell by 13% and profits shrank by nearly 80%.
The company has relinquished market share in the used-car market, no doubt to more value-minded chains like America's Car-Mart
Does this mean we're holding onto our cars longer? Not exactly. Auto-parts specialist AutoZone
Clearly this isn't a good time for the automotive industry. Big-ticket purchases, even on the discounted used end, are faltering. That throws a wrench into the system of a company like Sirius XM Radio
Sirius is considering options like offering up a sliver of its content to inactive receivers as a way to court new subscribers, but it doesn't help the company if new and used cars are collecting dewdrops on the dealer lot.
The lull won't last forever, of course. Consumers will eventually flock to upgrading their wheels, with new or used cars. The longer the wait, the greater the pent-up demand. Unfortunately, judging by CarMax's move this week to scale back its workforce, it seems that even the used-car giant doesn't see any near-term relief.
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Longtime Fool contributor Rick Munarriz isn't in the market to buy a car, new or used. He does not own shares in any of the stocks in this story. Rick is part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool's disclosure policy reads by the dashboard light.