Is just that it also depends on the timeframe you are thinking, the consumer still has run away to take more credit long term, their debt is still below 100% of their income. (85% as of Q1 2024)
But short/medium term, they are starting to struggle a bit, and I see the potential for larger problems forming, but temporarily.
That is probably up to their income currently, credit growth has slowed and they are not much direct stimulus anymore going around, so income growth seems to be what is holding them currently (meaning the labor market mainly). But consumers are already starting to spend above their income growth, so there is an unhealthy trend forming there too.
If their real income falthers, because of a recession or another wave of inflation, their spending habits are forced to change temporarily, not much about preferences. In 2008, that pattern happened they started to prefer/buy cheaper options at least temporarily, also because government stimulus aimed for more full efficient options, and you can see it in the chart above the share of light weigh truck declining during this period.
The severity of it and potential problems arising for the consumer are up to the development of a potential recession, and how much the FED and government can intervene because of inflation.
I have to think and research those questions you just asked better, but my base case has been and continues to be that we will end up in a recession eventually.
The timing and severity are just guesses. Right now I don’t see a very severe recession, especially because I don’t see the government allowing it.
Automotive seems to be experiencing their own cycle too, the industry could struggle while the economy is still growing. But in that case is probably even less severe the problems.