If you think it’s a buyer’s market for new cars, oh man are you right. But you ain’t seen nothin’ yet. Literally. “At the Long Beach port near Los Angeles,” Reuters reports. “Toyota Motor Corp vehicles including Prius hybrids, FJ Cruiser sport utility vehicles and Lexus IS 250 luxury sedans are being stored on a vast construction site that will one day be a new container terminal. The site became a gigantic parking lot when Toyota and Daimler AG’s Mercedes-Benz asked the port for space to store thousands of vehicles that dealerships have not been able to take on due to sluggish sales.” Imagine this. “The port has not counted how many additional cars were being stored, but Wong said Toyota has leased an additional 23 acres of space while Mercedes-Benz has leased about 20 more acres.” So, if the ports are choking on new cars, where are Motown’s unsold machines? Everywhere, our spies tell us. Everywhere. Import or domestic, their products don’t have an idefinite shelf life. There’s only so long the manufacturers can afford to keep these new cars off the market, propping-up new car prices. Bottom line: as predicted here, new car prices are headed for one Hell of a crash. And soon.
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Wasn’t so long ago that Chrysler rented Space at Detroit Metro Airport to store their excess vehicles too?
Anecdotal data: bought a used car Saturday at a new-car dealer. (2006 Grand Prix GXP — man, does it move — for my wife. Life is good when your spouse likes fast cars! But I digress.)
Showroom was busy, but F&I guy said used car sales were solid, but new car sales were in the dumper.
You could hear crickets chirp in other dealers’ showrooms that day.
As the recession enters a depression and a multitude of people become homeless those parked vehicles may become the next “Hooverville.”
TTAC needs to commence a contest for renaming “Hooverville,”
A more modern, apt term for the coming hordes of squatters ekeing out a living while those at the apex receiving the bail-out money continue their elite-class life-styles.
Not that there is anything wrong with that since, as so many politicians and elite shills babble, there is no class problems within the USA.
Cough.
This whole deal with the “Big 3” really should be no surprise. Not sure of the tech details, but I think it was the 70 when you could truely say, “American Made”. Aside from a few boat makers in New England, Farmers, and maybe California wine makers; American craftsmanship flat out sucks. I am sure there are some others out there that have pride in what they actually do for aliving. By and large Americans have an entitled attidue that lacks professionalism and pride of ownership in what WE do, and how WE do it. If it weren’t for the children of Michigan I would invest all the money I own into a campaign that would have the big three hat in hand at traffic lights not Congress. Face it, the almighty US of A is seriuosly lacking where it counts the most, responsibilty.
Oh by the way, I have movers coming next month to deliver all of our posessions from Germany, and I am sure that these, pompus, apathetic, low self esteem, “I’m just doing this job for right now”, degenirets will destroy all we we own. Why because they like the CEOs, and leaders of our Country don’t think past the First thought, “what if it was me”.
Say it aint so, I dare you!
Well, jeez, klaus templar, I kinda hope the movers get to read your post. Maybe you should print it out and hand ’em a copy.
LOL.
So this is what happens when greed and stupidity come to a grinding halt?
Maybe I can trade my S550 in for an S600 !
“come on, it costs you guys money to keep this S600 on the docks…let me help you !”
kntemplars,
Everybody thinks they’re the only conscientious workers. I like my late uncle’s attitude. He respected experts. Didn’t matter if you were a gardener or an eye surgeon (which is what Uncle Floyd did for a living), if you did your job well he respected you.
kntemplars, normally I ignore 99% of the hormonal discharges like the comment you just posted.
I think this makes it 98.2%. Oh well. I guess enlightened souls like you should feel free to protect your intellectual property in China. Your small industrial business in Germany. Your family in South Africa or Zimbabwe. Your high quality education in Mexico. Your politically incorrect views in Britain. Your spouse’s rights (or your rights) in Saudi Arabia. Or your money in any of these countries once the government gets a little ornery with what you actually do for a living.
Trust me. I’m no fan of what the American government has become in the Bush era. But that has absolutely zip to do with the people here who, more often than not, do have a good work ethic and attitude.
LTFU!
You may want to take a gander about the average hours worked by Americans and the number of patents and start-up’s that are done here vis-a-vis most other developed and developing countries.
I’m willing to bet that maybe with the exception of perhaps Israel, Taiwan, Hong Kong and certain sections of Eastern China, the Netherlands, and perhaps Australia, oh… and any place that is either a protectorate or commonwealth with an exceptionally affluent citizenry… oh and Fiji too. With the exception of those places, and maybe Canada, Japan and Europe, we’re indeed the best. Or at least near the top. Maybe the upper middle.
I would have thought Mercedes and Toyota would have been able to scale back production to avoid this. I imagine this is nowhere nearly as bad as the 3 months’ worth of Suburbahoes GM has sitting around.
Flashpoint :
December 7th, 2008 at 10:42 pm
LOL.
So this is what happens when greed and stupidity come to a grinding halt?
Maybe I can trade my S550 in for an S600 !
“come on, it costs you guys money to keep this S600 on the docks…let me help you !”
Why stop at an S600? Go S63 or S65! :D Having so many benzes on the lot sure isn’t going to help their resale values.
The few assembly lines moving have slowed to a crawl. The mfgs are killing time until the 2010 model year re-tooling. It is like there is a game of chicken going on between the domestic auto mfgs and their bloated dealer channel. Swollen inventories and high(er) cost vendor financing are the only tools the Big 2.00008 have to run off dealers, given the state franchise laws.
How long can the greater dealer channel survive?
I would have thought Mercedes and Toyota would have been able to scale back production to avoid this. I imagine this is nowhere nearly as bad as the 3 months’ worth of Suburbahoes GM has sitting around.
As of Nov. 1, the import brands had an avg of 87 days supply and the Detroit companies had 115 days supply. Either way, three or four months supply is not healthy whether you say
Tages-Versorgungsmaterial
or
幾日の供給
Say anything you want in response to my comment that will follow, for it can not and will not undermine the basic truth of it:
All the world’s a stage, and when you have such disparate living standards in different parts of the world, and the formerly less fortunate can gain instant access to the latest and greatest research and development and means of production, you’re going to have a true race to the bottom in lifestyles and economic safety for the men and women who USED TO MAKE MORE.
Tell me how GM, Ford, Chrysler, or even Toyota, Honda or Nissan are going to compete with Kia and Hyundai, when new Sonatas are being sold pretty much loaded for around $14k new, and the V6 version is being sold an eyelash under $16k new?
And when the Koreans devalue their won and the Japanese artificially devalue their yen (much to the dismay of the ‘carry trade’ crowd on Wall Street), the deflation will only become more pronounced.
Don’t be surprised to witness an epic race to the bottom in terms of living standards over the next 5 to 10 years – the culmination of Ross Perot’s successful predictions of what alleged ‘free trade’ in a manipulated world would result in (a prediction made some 16 years ago when he ran for POTUS).
The good thing is that Pelosi and Frank can give our money to Detroit to keep the workers employed. This will allow them to keep busy cranking out even more cars that are overpriced and hence no one will buy and hence to fill up even more real estate.
“The more inventory a company has,… the less likely they will have what they need.”
. . . . . . . . . . . . . . Taiichi Ohno
and,
From “The Toyota Way” by Jeff Liker:
Principle 3: Use “Pull” Systems to Avoid Overproduction
Guess that idea got lost somewhere. If the local small Toyota dealer’s lot is any indication, they have way more FJs than they need without those shown in the picture. A sales guy told me a few weeks ago that he couldn’t remember when anybody even drove one.
Read an interesting article a few days ago about current life in Japan. About one-third of workers are temps who make about two-thirds the pay of permanent workers. The temps can be canned anytime and get no unemployment compensation.
There was an official “cars to the acre” measurement in the UK in the 70s. Maybe that will come back.
To continue the GM/BL comparison, BMC built a multi-story car park to store produced vehicles next to their factory. At the opening ceremony the line foreman was quoted as saying “I’ll fill that bugger in a week!”.
According to sources he did too.
ohsnap:
Where do you buy cars?! If I could sell loaded Sonata’s for $14k, I would be selling 100s a month! A $20k base Sonata with $500 markup and 600 holdback has a $2000 rebate. That gets me to $16,900 all in. Where does the other $2900 come from?? Let alone a loaded one.
It doesn’t matter which brand you choose, foreign or domestic. Everything is slowing down.
A glancing view of dealer lots from the freeways in Houston, TX shows full lots in front and a growing overflow area out back. When I see Toyota and Honda dealers crammed full of new vehicles, I know the economy is tight.
But… do we have any objective evidence that prices are really dropping? My Saturday newspaper certainly doesn’t really show any spectacular deals yet…
Look out your window flying into Detroit Metro. Chances are you’ll see some acreage of fresh metal parked in the overflow lots. Hell, they can start filling the old Smith terminal.
Robbie…me neither. Which begs the question, are the auto manufacturers hanging on or do the deals come when you show up at the dealership, modest offer in hand? I haven’t even seen firesales on Chrysler products which they should be ushering out the door at bargain prices.
Robbie: You can get some pretty spectacular deals, you just have to show up at the car dealership and start talking to the sales manager. With the end of the year coming about I’ve seen some really absurd deals lately, like 5 figures off sticker on some luxury 2008 cars.
Tell me how GM, Ford, Chrysler, or even Toyota, Honda or Nissan are going to compete with Kia and Hyundai, when new Sonatas are being sold pretty much loaded for around $14k new, and the V6 version is being sold an eyelash under $16k new?
Over time, if Hyundai can increase its market share, it will be raising its prices. The prices are this low only because they are trying to gain market share, get past their once-poor reputation and utilize their massive production capacity.
Many of Hyundai’s sales in the US are going to fleet, especially rental. As they increase the retail sales, they will be able to afford to raise their prices. But right now, the demand isn’t there, so the cars remain cheap and the rest of the company can carry them. For now, they have no choice but to sell at a discount.
My price point of $12K for a nicely equipped 4×4 Silverado may be too high…
Is this the famous “PULL” system I see touted so much? They must be pulling on the wrong thing.
I fail to see how getting $10k off a $45k pickup truck is a deal when the thing has no right costing more than $20k to begin with.
Nobody has pointed out that vehicle prices have hyper inflated at the same rate as houses, and a serious market correction is in order. When a VW Golf (granted, top-of-the-line) sells for almost $40k there is something seriously wrong with the world.
Templar,
The amount of car makers that actually employ craftsmen to build cars is very small. Those cars usually cost over 100k. If you are indeed a person who can do a job really well, to the level of craftsmanship that you seem to demand, then you can likely afford one.
The truth is, most people DON’T WANT craftsmanship anymore. They want quality manufacturing at a value price. Given the choice, very few people will pay the 3x cost to have an expert do anything.
I will bet dollars to donuts that if you looked harder, or knew the right people to call in the first place, you could find movers who, at a much higher cost, would move your goods with extreme care.
You don’t always get what you pay for, but you very rarely get what you don’t pay for.
—–
Retarded Sparks brings up a good point. Do the car makers usually double their money on their variable costs? If so, will the bottom be 50% off?