We are of the opinion that CMS is not as dumb as some media and pundits would like you to believe. More important CMS is quick to adjust to the economic environment.
The Canadian economy is powered by CMS having evolved into a consumer economy.
Looking at Canadian auto sales:
We mentioned sometime ago that free flowing money was powering auto sales. Sales records are broken on a monthly basis.
Now presumably CMS is in deep yogurt with long term loans and rolling over deficiencies, and it begs the question how long can this last before it blows up?
If you remember in the good old days of leasing the question a few years ago was how long can it last before it collapses under the weight of residual risk?
The reality, free flowing money has raised auto sales to new heights that have shattered records forthe past couple of years.
While CMS is contantly evolving from an ownership to a mobility model when it comes to vehicles.
Consider the most successful manufacturers in Canada have improved, tweaked, calibrated, at times pivoted the mobility model. These manufacturers were not exclusively in the ownership model, and have successfully expanding their own mobility model.
While the pundits are waiting for the sky to fall. The Canadian Consumer is offered a myriad of monthly incentives, from competing manufacturers, is enabled to roll over deficiencies, all at a constant monthly payment.
The other Canadian Consumers that have been on the mobility model for a longer period of time simply replace one leased vehicle with another.
As the pundits have an ongoing discussion of "social media" relating to the auto business, and other pundits discuss the disadvantages of long term financing. The Canadian Consumer keeps on expanding the mobility model empowered and enabled by manufacturers and the financial services.
With increasing talk of autonomous vehicles, which consumer wants to keep any vehicle for any lenght of time?
We could keep on going...what do you think?