Recently, CarMax, the largest used car seller in

Recently, CarMax, the largest used car seller in the U.S., performed much worse than expected. In the latest quarter, which ended on Aug. 31, sales fell 6% from the same period last year, and EPS was $0.64, a sharp drop from $1.04 expected, baffling the market.

So the stock price fell by more than 20% in an instant. Earlier, there were signs that the automobile market was getting a little worse, but it was not revealed much, but it seems that CarMax’s performance hit it

However, there was a decisive factor that was blocking the deteriorating atmosphere. It is a subsidy for electric vehicles that ends on September 30.

The electric vehicle subsidy ($7,500 for new cars), which was introduced by the Biden administration through the Inflation Reduction Act (IRA), will be terminated by the “One Big Beautiful Bill Act” introduced by the second Trump administration. The 28% increase in electric vehicle sales in the month of September ahead of the end was also attributed to each company’s aggressive discount policy to see the last effect of the subsidy.

On the other hand, sales of gasoline and hybrid vehicles are expected to decrease by 2.5% during the month of September compared to the same period last year. Analysts say that it is also due to the fact that consumers, who were concerned about policy uncertainty this year, pulled their cars even before the U.S. declared a tariff war with the world.

Furthermore, there are no factors to drive vehicle sales after September. It is currently reasonable to anticipate a situation where temporarily significantly increased sales will have no choice but to ‘roll back’ once the IRA’s electric vehicle subsidies and discounts are over. Market analysis is currently flowing in this direction.

Car sales should be viewed sensitively because car sales are the most important factor in showing the overall economic situation along with consumption. It is a product that requires a large amount of money and a lot of loans. Then the real estate market begins to take a hit.

Even before the 2008 financial crisis in the United States, the automobile market showed signs. Before the subprime burst, the automobile sales market, which had been on the decline since 2007, began to collapse in early 2008.

Of course, this is very different from the financial crisis in the United States. However, the biggest example of the result of the previous decline in car sales is this time.

+
Despite the fact that the AI bubble theory is still booming, no one can be sure how long the market will continue to be strong. Uncertain indicators that need to be examined are emerging one by one.

The latest indicator is falling vehicle sales in the United States. Last Friday’s coffee pot pointed out how to view the signs of the automobile market.