The U.S. light-vehicle market doesn’t appear to be in the best health. While many automakers now opt against issuing monthly sales reports, those that still do are posting some pretty brutal numbers.
This does not bode well for an industry that seemed pretty certain that 2022 would be its recovery year. However, it is on-brand with the slew of announcements made by manufacturers warning about supply constraints and an inability to manufacture at scale. There has also been a growing sense that some consumers may be shunning vehicles that have spent the last several months trading well above what seems rational. Wholesale pricing actually declined by roughly 6 percent since the January record. Though you may not see that represented on dealer lots or even have noticed if it was because last month still saw transactions averaging 14 percent higher than they were last year.
As for sales volume, most automakers were posting double-digit declines for the month of May. Overall, the seasonally adjusted, annualized rate of sales (SAAR) for May fell dropped to a crippling low of 12.81 million, according to Motor Intelligence. That’s to be contrasted against April’s 14.6 million units and over 17 million average from May of 2021.
Automotive News issued a breakdown between the individual brands, noting that the problem appeared to be worse among Asian brands. It also said it didn’t expect the coming months to be much better, as the industry is now staring down the barrel of commodity shortages, sustained inflation, and supply chain problems. On Thursday, LMC Automotive lowered its outlook for U.S. sales this year, knocking off 300,000 would-be vehicles for an even 15 million units.
“The market faces a real risk of turning negative from 2021,” Jeff Schuster, head of global vehicle forecasts at LMC Automotive, stated. “We still have a lift in sales in the second half but it is plausible that an increase will not materialize this year and we could continue to track in the 14 million to 15 million unit selling rate for the remainder of the year.”
From AN:
May volume fell 4.4 percent to 153,434 at Ford Motor Co. and by double digits again at Toyota Motor Corp., Hyundai and Kia as choked supply chains continue to batter automakers, leaving showrooms and lots nearly bare of new cars and light trucks.
Deliveries in May declined 4.3 percent at the Ford brand, the fourth straight monthly decline, with mixed results for the division’s biggest sellers: F-series, up 6.9 percent; Ranger, down 58 percent; Explorer, up 19 percent; Escape, down 55 percent, and Bronco Sport, down 36 percent. Lincoln volume dropped 6.8 percent in May, its 12th consecutive decline.
Ford said nearly 50 percent of its retail sales last month came from previously placed orders.
Toyota, with one of the industry’s leanest stockpiles of new cars and light trucks, said volume skidded 27 percent to 175,990 last month, with deliveries off 27 percent at the Toyota division and Lexus. It was the tenth straight monthly decline for the Toyota brand and fourth consecutive drop at Lexus.
Honda fared even worse as deliveries slumped 57 percent to 75,491 cars in May. This was attributed to the brand’s best sellers ironically not selling all that well. Accord was down 58 percent, the CR-V was off by 59 percent, and the Civic was short a massive 77 percent against last year’s metrics. The reason is now all-too-familiar. The company said it couldn’t get enough parts and had to pause production, leading to extremely lean inventories in the United States.
“We are experiencing record turn rates of more than 80 percent for the Honda brand, with nearly every unit a dealer touches in a month already sold,” a Honda spokesperson. “More than half of our Civics and CR-Vs are sold before they ever even reach a dealer’s lot. Our sales numbers do not reflect the true demand for our products.”
It was a similar story for Mazda, Hyundai, Kia, and Volvo. They all endured similar sales declines in May and faulted the poor state of the industry as the primary cause. Though that’s little comfort considering this is usually the time you see a serious uptick in vehicle sales.
“Historically, the daily sales pace is higher in May than in most other months, with spring optimism in the air, thoughts of summer road trips on the horizon and the buzz of Memorial Day sales,” Charlie Chesbrough, senior economist at Cox Automotive, told Automotive News. “But many of the industry’s normal patterns have been overturned by tight inventory and the lingering effect of the global pandemic.”
The global semiconductor shortage is assumed to continue stifling automotive production for the foreseeable future. Meanwhile, China’s stringent “zero-COVID policy” has effectively crippled the supply lines of many companies that would like to sell things to people living in North America. No matter how you parse through the data, it doesn’t inspire much confidence that the next few months will be any better than the last batch.
[Image: Gretchen Gunda Enger/Shutterstock]
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Relax. We’re in good hands. Trust the experts. Cars in 2022 are better than ever. Automakers have exactly the right product for the times — incredibly lightweight fuel-efficient space-efficient wonders of modern technology.
I hope you’re being facetious. Who’s good hands are we in exactly? The economy certainly isn’t in good hands. The country is being run but a bunch of incompetent anti-American, anti-Capitalism radicals. We are unfortunately, thanks 81 million brain dead Americans, in their hands and we are headed for (by design) disaster.
Elon Musk has a “super bad feeling” about the direction of the ecomony, but you and I both know that he ain’t too bright — right?
No. He isn’t.
“No. He isn’t [bright].”
Let’s see… in one corner we have an eccentric, outspoken and, admittedly, often uncouth billionaire innovator who’s helped revolutionize several fields, including electric vehicles and commercial space.
And in the other, we have a “professional automotive journalist” (read: some no-name with what appears to be a failed blog) asserting said billionaire isn’t too “bright.”
Hmm.
He’s intelligent, but he’s mentally ill, immature, and petty. As lomng as he continues to be a right-wing troll, the TTAC crowd will love him, even as they despise the electric car movement he boosted.
@teddyc73 – I take it you don’t realize that virtually every country on this planet is facing the same problems?
“Elon Musk has a “super bad feeling” about the direction of the ecomony (Sic)”
I am not filled with warm fuzzies about the economy either but if Musk takes a 40% inflationary hit to his bank account, he isn’t gonna lose sleep. The rest of us, it ain’t pretty.
“ I hope you’re being facetious.”
He is. Don’t worry.
But you are 110% correct. This country has done a major 180 as of Jan 20, 2021 and it’s only getting worse. But this is what they want. They want people suffering like we are. Libs create the problems and then promise people help as long as it’s government reliance. It’s a self fulfilling prophecy.
How can we have 40 billion for corrupt Ukraine and another 6 billion for student loan forgiveness but yet sleepy, stuttering Xiden can’t help with gas prices. Or diesel prices. 40 billion in diesel subsidies to keep the cost of food and products down would be a help.
But remember this is the same installed administration that save us $0.16 cents on a BBQ and then used it as irrefutable evidence that their policies are moving this country in a positive direction. Amazing.
Who are these radicals? I just see a less racist conservative. Who is Xiden? Why on earth would we send more money to the obscenely profitable oil companies?
I’m confused. Do you all like big or small government?
“ I’m confused.”
We know. We can tell.
And who is less racist? Xiden? He is, quite possibly, the most racist president we’ve ever had.
Cute.
Why should we continue to subsidize an insanely profitable industry? Answer the question.
“Do you all like big or small government?”
Speaking for myself (and only for myself), I prefer a government which is:
a) Big enough to walk all over its citizens
b) Small enough to get pushed around by multinational oligopolies
If pushed, I might further admit to a growing preference for government which taxes the rich and subsidizes me (it’s sort of addictive).
In summary, I’m pretty happy right now.
(Our current government is strongly conditioned to leave the private Federal Reserve and the private banksters alone to do WHATEVER they want. Being an ignorant hillbilly, not sure exactly how I feel about this — but those banksters sure do dress nice.)
The market is demanding coal pawred Hummers, but China Joe shut down all the coal mines!
Fer now, we’ll have to just keep burnin’ plastic to stay warm. Oh, and didja know that yer well is a grate place to dump you’re used oil?
I can’t comment about automotive chips/ wiring harnesses/ supply lines, but I can comment about local retail prices. Our local Hyundai dealer is selling Hyundai Elantra SEs for $31K. This is a $23K list car with $5K market adjustment and $3K for the Platinum package which consists of nitrogen in the tires and some car wax applied at the dealership. I think that many people recall that this car carried a discount of $1K+ just a year and a half ago. If you buy this car you will be seriously underwater for quite a while. Somehow spending money on tires, brakes, etc seems like a wise investment if it will buy you another year of use. Around my neighborhood, most of my friends who lease, are buying out the vehicle at the end of the term. Not only do the prices seem like a bargain, but due to the pandemic the cars have half the usual mileage of past leases.
Exactly. I’ve been in the market to buy a Santa Cruz for nearly 8 months… but A) you can’t get one due to limited inventory and B) the one that is on the lot is $5k over MSRP and I am not playing that game. My current truck still works so no sense overpaying for something I don’t need.
“…Platinum package which consists of nitrogen in the tires and some car wax applied at the dealership.”
Allegedly…
So you telling me I now have to bring my nitrogen detector along to buy a car? Geez….
That would be me, buying out my lease also in 4 months, a 30 K mile lease, I only have 18,900 miles on a 2020 Equinox, someone from the stealership has been calling me biweekly trying to offer me an early lease turn in, NOPE!
So that redgolf should be blackequinox?!
“an industry that seemed pretty certain that 2022 would be its recovery year”
Recovery from record profits? Sell fewer cars, make more money. Sounds like they were doing pretty darn well.
The dealers might be suffering, but the manufacturers are swimming in gold.
And how do you know the automakers are “swimming in gold”? They have expenses too you know. Do you know how businesses work?
Ford lost $3.1B in Q1, their income from operations fell from $2.9B to $1.59B and their 2021YE guidance was based on about 15% production increases.
insideevs.com/news/582626/ford-3billion-net-loss-rivian-stock/
They aren’t in a dire situation but it isn’t “swimming in gold” either. Even if the goal is permanently high transaction prices the industry is underproducing units.
True, but $5 billion of that loss was from Rivian.
The overall loss was due to Rivian, but they had several operation-specific metrics that were down as well.
Here is Honda’s situation:
bloomberg.com/news/articles/2022-05-
13/weaker-yen-helps-honda-s-annual-
profit-but-fails-to-lift-outlook
Again, these companies aren’t on the verge of bankruptcy or anything but they aren’t in this situation by design either. There’s no reason for Honda to have almost 60%(!) lower production when they already had low incentives and low inventory days.
The Dealers are the ones that are making out like bandits. Vehicles that they regularly sold at a discount now have a minimum $5k ADP and many have much higher ADP stickers than that. Their costs are down too since they aren’t floorplaning many vehicles, either they are custom orders that are sold before they were made or they sell the day they get put on the lot instead of hanging around for 30-60 days. Then they have the lease buy out scams, which the mfgs are finally cracking down on where they process it as a buy out at the existing residual, well below market price and then of course sell it at market price.
New vehicles are simply too expensive. Look at this used car deal below. How can you beat this?
From carmax.
2014 Toyota Camry
63,090 miles
$11,552
It would have been $12,552 but it has the Camry ding.
A new Camry LE is $25,845. The average Camry hits the crusher at 18 years and 200k miles. So a 2014 Camry has consumed 33% of its useful life. But it costs 46% of the price new. This isn’t even accounting for the maintenance and repair costs involved in taking a Camry from 100k to 200k miles.
If you can find a new Camry for under $26,000 before taxes, buy it.
How could anyone in their right mind think 2022 was going to be a recovery year with Dementia Joe, the worst most incompetent president in decades, and the Democrats, a bunch of anti-American, anti-capitalism radicals, in charge. This country is headed for disaster (by design) not recovery.
I don’t think Joseph R. Biden, Jr. and the Democrats are so bad… and if they send me or any of my family members another check soon I might maintain that opinion.
(If not, well, we shall see. When are the midterms again?)
[Dear Mr. President, We don’t have any student loan debt. Cash is preferred to loan forgiveness. Thanks! – Our Little Family of Voters]
You realize those government checks (paid with borrowed money, not taxes) is the reason for inflation, right?
Inflation is caused by too many dollars chasing too few goods (supply chain). The too few goods due to supply chain problems is directly influenced by the high price of fuels, which adds to inflation.
The high price of fuels is due to restrictions on energy production by the same government sending you the checks. If you like those checks, cash them and spend them before they’re worth even less.
Jesus, Teddy, enough. We get it – you don’t like Joe Biden.
Even Joe does not like Joe right now. It is why he is identifying as “Brandon” now.
Biden may not be a stellar President, but when I look back to who her replaced, I’m very grateful to the American electorate. And I’ll put up with some worldwide (not just American) inflation due to a pandemic and a war (not a President’s playing with the economy), just to ensure I’ve still got my right to vote.
I get voting against Trump in a laughably vain hope for something better, but anyone who still supports Joey Sh|tbritches at this point is a waste of space and air.
Biden is an awful president and no way in he// he’ll get re-elected. Best we can hope for right now is that he makes it to the end of his term because right behind him is the worst & most incompetent VP this country has ever seen. That’s what happens when you get chosen as a running mate based solely on your gender and skin color.
Cars are overpriced. Consumers are being pummeled by inflation that is closer to 15%-20% than the “official” 6-8% (both of these are late 1970s territory).
History rhymes. This is looking very much like June 1979. The difference being that, unlike 1979, when the government was trying to deal with the situation, the US and EU regimes are doing things to make the situation even worse. The money pumping. The sanctions against Russia. Reducing electrical generating capacity by replacing reliable coal/oil with solar and wind.
Look for car sales to stay low and go lower in general–but for sales of low-priced, fuel-efficient ICE cars to go up.
By 1980, the price of a Corolla and a base pick-up truck at your friendly Chevy/Ford and Toyota dealer were pretty close.
At the end of the day, people still need a vehicle that will run reliably and can carry the driver and a few people and/or luggage. Preferably with A/C. Everything else is “nice to have”. The Japanese cars of the 1970s, particularly Honda and Toyota in the late 1970s best offered these virtues. Today it’s the Koreans.
Right now is a good time to buy the most basic, least optioned, most fuel-efficient car NEW, because I’m betting in 3, 6, 12, 18 months these cars will cost even more, and interest rates for your loan will be higher.
Today’s vehicles are pretty well-built, so they should offer more reliable transport as we enter what seems likely to be the worst economic era the US has experienced in our lifetime.
The Asians can go downmarket pretty without too much difficulty. They already make decontented Hyundai Accents and Toyotas, even with manual transmissions, for other markets.
The Americans cannot. OUCH.
There are some similarities for the American based car makers in 1979 who were under pressure to design more fuel efficient cars and bring them out soon. GM spent millions developing the new generation of full size, compact, and midsize front wheel drive cars and to develop newer smaller more fuel efficient engines. The new GM cars for the early 80s were hastily developed and many shortcuts were taken and as a result the quality suffered. Smaller more efficient cars were in short supply and commanded premium prices. True Detroit manufacturers earnings were lower but nevertheless there was much pressure for them to develop new more fuel efficient cars to compete with the Japanese cars and to meet the impending Government standards.
If high fuel prices continue, the Big 2.5 could really have market share problems. Ford only really offers the Escape/Maverick as anything remotely close to cheap/fuel efficient. Stellantis only has small Jeeps. GM has an aging midsize sedan and a raft of small Korean hatchback SUVs. Meanwhile Toyota still has several small fuel-efficient cars and actual choice in Hybrids. We borrowed billions to bail these companies out to see them shut more American factories and build cars out of step with what the public needs. The electric transition is promising but optimistically the payoff is 8-10 years off.
@NJRide–There in lies the problem with the Detroit 2.5 but Detroit manufacturers are spending billions to develop EVs. GM could bring small cars from South Korea and China but even then it would take them some time to do it. I don’t believe Stellantis will bring in more Fiats nor will they bring in French cars that has been done before unsuccessfully. I think at this point Detroit will not develop any new ICE vehicles.
ICE vehicles are far from dead, Big 2.5 or otherwise. It’s not like any of us live in the absolute most efficient shelter/cube possible nor eat just what it takes to stay alive only and or healthy.
My gas guzzler is crazy reliable, and cheap to own otherwise. So screw it.
@DenverMike–I don’t think ICE is dead but by 2030 it might be harder to get a new ICE even in a truck but I believe trucks will be the last ICE vehicles made. We could easily have many ICE vehicles well into the middle of this century. Might be fewer gas stations. With proper maintenance most vehicles will last at least 200k and many will beyond that. I don’t believe most manufacturers are going to spend billions developing or redesigning new ICE vehicles because regardless of which political party or who is President they see an end to ICE in the future with impending regulations not just in the USA but in Western Europe, China, Japan, and much of the developed countries. In more rural areas especially farming communities they will be slower to adopt EVs and that could be years or decades past when most urban areas go mostly electric. There will be collectors and car enthusiasts that keep their classic ICE which I appreciate anyone who restores and keeps old vehicles going for the sake of history and future generations. Automobiles and trucks have been a good part of our history and culture. It brought a warm feeling in my heart and smile to my face when my nephew found and restored my Granddad’s 63 IH 1000 stepside pickup with the straight six and 3 on the tree. I might not drive an older vehicle but I appreciate those that restore and keep them running.
“Reducing electrical generating capacity by replacing reliable coal/oil with solar and wind.”
WTF is unreliable about solar and wind? With energy storage systems you get power when it’s dark and when the wind isn’t blowing. Besides, the most reliable power is power you generate and store on your own property. Run your car on it and power your house.
Texas is still having problems with fossil power:
https://www.texastribune.org/2022/01/05/texas-power-grid-natural-gas-cold/
https://www.texastribune.org/2021/02/16/natural-gas-power-storm/
Yeah, the morons did forget to order winterization kits for the wind turbines, but I assume that’s be rectifid.
“With energy storage systems you get power when it’s dark and when the wind isn’t blowing.“
Solar or wind+ Energy storage is expensive. The only way these alternatives can compete with fossil fuels is by creating a phony externality known as “carbon emissions.”
Regardless of the political leadership or lack there of I doubt the U.S. auto industry is ever returning to pre pandemic times. The days of dealer lots filled with vehicles, some heavily discounted to move are over. The past couple of years vehicle shortage has taught manufactures and dealers they can make bigger profits selling fewer vehicles. I can envision future dealers having 1 or 2 demo vehicles per model that don’t get sold until a new demo arrives and customers order the options they want and wait for their car to be manufactured and delivered.
” I can envision future dealers having 1 or 2 demo vehicles per model that don’t get sold until a new demo arrives and customers order the options they want and wait for their car to be manufactured and delivered.”
Sounds good to me. Every new vehicle I’ve ever bought I would have been more than happy to wait 4-6 months and get it exactly the way I want it. That’s what I love about Polaris’s Spring Snowcheck program for their snowmobiles. Choose model, trim level, engine size, track length & lug height and the colors you want and wait over the summer for it to arrive in the fall. Only way to roll!
“The past couple of years vehicle shortage has taught manufactures and dealers they can make bigger profits selling fewer vehicles.“
The only reason manufacturers have been able to get away with this lately is because the part shortages are affecting everyone. Under normal conditions all manufactures absolutely want to sell the most vehicles they can.
@Master Baiter – Agreed. If a manufacturer gets an upper hand on the supply side, they will flood the market to gain market share.
I have found that many if not most dealerships have gotten rather predatory and act like you owe them a favour and should be grateful for them fleecing you when you buy a new vehicle with massive dealer markups. The same is occurring with used vehicles. I’ve seen many dealers asking new prices for three year year old vehicles
Most dealerships I’ve contacted have had virtually no interest in courting my business. This is what we got, take it or pizz off is their attitude. You’d think that they would be chasing after new business.
@Lou_BC–I think in the truck market Ram will be the first to flood the market to gain more market share and Ford will try to hold out trying to stick to their new customer model of selling a little less by customer order making more per truck but as soon as Ram takes sales away from Ford then Ford will crank up production. GM might or might not follow but if they do they will be the last to increase production. Hyundai and Kia might increase production to gain on Toyota and Honda and the Detroit 2.5 on the suv and crossover market. I don’t think GM is as interested in market share as much as profit per unit.
@Jeff S
In my town the Ford dealer appears to have the most pickup inventory followed by Ram and lastly GM.
The local Ford dealer routinely inflates the price of new trucks. That’s on top of the usual dealer add-ons. I saw a Ford Ranger with a $5,500 “market adjustment” plus roughly 2k dealer add-ons. A mid-level XLT was priced almost at $52k. In comparison, my diesel ZR2 has a $55.4k price tag.
New vehicles are selling for above MSRP and the average age of vehicles on the road just reached a new high of 12 years.
“If management can’t sell Pontiacs, you don’t get rid of Pontiac, you get rid of management” say goodbye Mary.
Buickman
Founder
GeneralWatch.com
jdollinger.com
DollingerDifference.com
Some scrappage statistics from Row 52:
For the past week:
-48% of cars scrapped were 2004 or newer
-56% were 2003 or newer
-76% were 2000 or newer
-85% were 1997 or newer
My supposition is the average car being scrapped was probably sold late in the 2003 model year, meaning 18.75 years old. This number which has grown a bit during Covid and the supply crisis seems to be stagnating. This makes sense because 200k miles would seem to be a support level where many vehicles would get scrapped and many would hit 200k in this age range. I believe we have hit peak lifespan for now it seems there is resistance to cars lasting on median to 19 or 20 years which would lower demand. And it is possible in a better supply situation that the lifespan could fall slightly. (I believe long term the increasing electronics may inhibit lifespan, todays peak scrappage vehicles are a little before the screen boom).
If fleet stays at 283M this age of turnover would imply demand of 15.1 million replacement units. Fleet has grown every year since 2012 though I could see a flatlining or slight decline in fleet. Overall 12.8 million is truly recessional and unsustainably low without either a large decline in fleet or increase in age of cars. I do see support for used car prices remaining elevated in the near term.
Lots of factors! GENUINELY very smart people, maybe some of you, might be able to put enough puzzle pieces to see what direction we are going. I already gave my two cents, based on my incomplete, distorted perception of what I see and read.
Americans are getting older, which should depress ‘replacement demand’. Younger Americans are poorer today than they were a generation ago, which should depress prices, since they have less to spend. More people are working from home, which reduces use and need for replacement.
Prices of housing (buy/rent), food, energy are rising much faster than incomes, which depresses demand.
Against that, we have the aging of the fleet. Whatever the exact number, it is older than ever. BUT todays 8-20 yr old vehicles are comparable to 4-10yr old vehicles in 1980, in terms keeping them on the road. So the “technology” adjusted age is lower.
The supply disruptions created by the goverment’s COVID measures depressed production MORE than the drop in demand. One reason is the uneven impact of the pandemic. New car buyers are generally upper middle class and up (a big change from the 60s/early 70s when Alice the waitress would actually buy a new car). These folks were not only less affected by the pandemic, but working at home increased their disposable income. This damped the drop in demand.
Resulting situation led to empty car lots, OUTSIZE profits for dealers and generous once for automakers, all on less volume.
IMO, that’s all starting to change. The new normal will be lower sales volumes (say 10-13 million a year in the US), where $30,000 MSRP will be inexpensive (think Chevy Trax, Hyundai Accent, etc), and truck transaction prices will drop as less-contented cheaper trucks, in lower numbers return.
Of course, I could be wrong. Some note that “when gas prices drop again”. I say they are never dropping again. But I said that before and was incorrect, so what do I know? Fracking saved the day in the teens. Who will rescue us now? Maybe the electric cars—which I am very dismissive of. But I could be wrong…
I think you have a great point about technology-adjusted age though I believe there will be a slight reversal once the mid-2010s years cars age into the senior vehicles due to way more electronics.
@NJRide, I totally agree with you! I think a Camry from say 2004-2015, or similar Accord, or a 2008-12 Chevy Malibu, Subaru, or similar vintage Toyota/GM/ non-turbo Ford Truck are probably the most reliable vehicles we will ever see.
But at this point, these are 10-15 years old already… As much as I miss my trouble-free, reasonably fuel-efficient Malibu, had I kept it, I’d have a an 11-year old car with about 140k miles. Is that a better bet than a new Malibu? Actually, some chance it is–the new Malibu comes with a 1.5 Turbo, vs a 2.4 liter normally aspirated four, and a CVT vs a 6-speed auto. The new Malibu is more efficient for sure (I know from renting). I bet in 8 year, 100k miles, both those cars will cost the same in repairs…
But the 10 year old Malibu won’t be as trouble-free as a new Camry, or a Subaru with a stick (I don’t trust CVTs, or turbos, for longevity)
A lot of frivolous, but necessary, electronic BS plagues new cars. Besides the annoying touch screen, we’ve replaced ignition keys with “keyless”. You need working fob (battery), a working receiver to get the signal, and a working module to process. Needless complexity.
Agree the increased use of electronics will limit the lifespan of newer vehicles. Also more insurance companies are totaling vehicles that have been in an accident that are older because it is cheaper to pay out the Blue Book value. Blue Book values for the most part are lower than what the vehicle sells for retail regardless of condition and mileage and insurance companies tend to pay out the lowest blue book value. Replacing an air bag can be enough to total a vehicle and even the slightest body damage that doesn’t even effect the drive ability on a 10 year old or more vehicle can total it. I had a body man that had a 12 year old Camry in his shop with a rear fender damaged that the insurance company was going to total and this car had an otherwise solid rust free body with good paint and was drive able but it had high mileage. In many states once an insurance company totals a vehicle it will have a salvage title and cannot be re-insured.
So I was on my local auto strip for three hours yesterday, getting a windshield replaced in one of the cars….
I walked four miles, one end of the strip to the other. I walked behind the strip mall buildings, past and through the dealers.
BMW-little to nothing. Range Rover, two cars in the showroom. Toyota, a few used pickups out front. Honda, a few cars in showroom, no stock. Acura was odd. Showroom full, front lot four cars, but two blocks away, behind a closed furniture store, about 25 new MDX, TLX and a few others-I’d not be surprised that they are…lying about stock, especially this dealer-all the Acura I saw were either made in US or Canada. Lexus, very few new and all that mid range truck.
This strip is in Bedford Hills, NY, a painfully affluent area north of NYC-till recently, literally anything you might desire, just bring ca$h. The trade in forecourt of the BMW dealer used to be fun, cream puffs all….
I just re-did the lighting on the 2008 MDX, which is EOL at 235k miles, but the Q5 mama would want isn’t easy to come by. I’m not alone, I’ve noticed it takes longer for parts to arrive or source-as a serial DIY guy my normal websites have “out of stock” or “unknown when ships” frequently. Getting a set of discs for the C class was harder than anticipated.
My local Chrysler-Jeep-Stellantis shop gets a row of Grand Cherokees occasionally, all identically optioned. The Chargers/Challengers are nowhere to be seen, and the classic Jeeps/Gladiators ? None.
If you want to be even more scared, r/askcarsales on reddit tells the story from the dealer’s POV.
Yeah some of those cases the “bare” lots seem to be because the vehicles are “in hiding”. I drove by the local rail yard where GM and Chrylser vehicles are unloaded. I have never seen it packed like it was this week. Of course many may be custom orders that are already sold.
True most of those vehicles being unloaded are customer orders. That was true of my Maverick. It was delivered at my dealer with 5 Mavericks on the same truck and all of them were custom orders. My salesman told me that customers that ordered them all had appointments to pick them up. I know that most of the Mavericks leaving the factory from Mexico have been retail customer orders. Took me 8 1/2 months from the time I ordered it to when I received it.
@Jeff S. It’s the same thing here. Everything is sold before it hits the lots (for the most part.) I see some inventory at a Buick and Infiniti dealer I pass on a regular basis, but the Cadillac and Honda dealer next door has nothing but used cars and what looks to be some demos.
That’s how I bought my car. Back just after the new year started, I sat down with the internet sales rep at the Mazda dealer, I came in knowing what I wanted, we took a test drive in a demo MX-5 that was sold at one time but the owner backed out, and then I placed the order with the deposit. Fast forward to April and my car arrived on one of two trucks that dropped off that batch of Mazdas – all of them spoken for.
I’m in the camp thinking this is going to be the new normal until the years of overpriced new and used cars crashes car sales and causes even more harm to the economy. I think greed is what is going to bring this whole house of cards burning down. If gas prices stay high or get even higher, I can’t imagine that 15 mpg large trucks and SUVs will continue to sell like they are now.
The only way we get out of this rut is additional factories worldwide to build additional parts and electronics. We’re living with Covid now and business as usual but the shutdowns were a worldwide kick to the groin here.
@theflyersfan–Fortunately you did not have to wait as long as I did. I ordered my Maverick on July 26 last year and took delivery on April 8 this year. There are Maverick orders before mine that still haven’t gotten the Mavericks. Maverick forums and Ford Authority did say that items like the Ford 360 and other additional electronics would delay the manufacture because of the chip shortage.
I found the most frustrating part of searching for a new truck was wading through multiple dealership website listings to find out that almost all of them had been sold or had deposits. Only a couple of honest dealers listed “deal pending” on their vehicles. I wasted a massive amount of time talking with salesmen with no product to sell me.
GM did change the order deadline on the Colorado so one does have 2 more months to put in an order. I no longer care since I have one arriving June 9.
@Lou_BC–Congratulations on getting your Colorado sooner than later. Not too bad getting this Thursday.
I did my part. I hadn’t bought a new car since Nov 2006. You’re welcome, Mazda.
We had a situation here at work in late 2020 where we said “Let’s hold off ordering this long-lead-time, single-source item until our inventory level gets a little lower.”
Since then, we’ve been in a constant state of months-long backorders.
This is why my sympathy for the chip shortage only goes so far. If they hadn’t canceled the orders… it wasn’t like they weren’t going to use the chips eventually; but when trying to run low inventories, we see now what happens when it all goes wrong.
Because right now, I’m pretty sure every EV and Hybrid they could make would sell.
…and just like last time gas prices went wild during Katrina, soon as they’re back down those EV’s and Hybrids will get traded in for the biggest pickup or SUV available.
I don’t think we are going to see cheap gas prices like we have in the past. We will see prices stabilize and go down but not way down. Oil companies can make more money limiting the supply. Also I don’t believe auto companies are going to crank out as many new vehicles as they once did. They will increase production but they can make more profit not making so many vehicles that they have to discount them. I have a hybrid but I will not be trading it in if gas prices go down because they might not stay down and will likely go up again.
“Oil companies can make more money limiting the supply…”
I guess they just figured that out in the last year or so. Same with the car companies–they want to sell fewer vehicles to make more money…Right.
Have you ever studied even basic economics? It would appear not. (I have an MBA, in case you were wondering.)
@MBA,
In the attached diagram, can you please explain why Qm is less than Qc? (Note also of course that Pm is higher than Pc)
https://en.wikipedia.org/wiki/Profit_maximization#/media/File:Monopoly-surpluses.svg
You posted a curve titled, “Price Setting by a Monopolist”
The auto market is not a monopoly. And neither is the oil market.
Having said that, we’re in an unusual situation at the moment due to supply side disruptions caused by COVID lockdowns. I would hesitate to apply any general economic principles to the current situation.
I don’t agree that we’ll never see low oil prices again, or that we’ll never see dealer lots stocked with automotive inventory.
Speaking of Transportation-Related Industries With Absolutely No Aspects of Restricted Competition To Be Seen Anywhere Ever:
https://documentedny.com/2021/11/23/taxi-cab-medallion-explained/
There is a point where over producing can lead to less profit a company can make more profit by meeting the point where supply meets demand below that profits are less above that profits are less. The problem is determining exactly where that point is. If you recall 2 years ago too much oil was produced more than what could be refined and as a result the excess oil could not be all stored leading to negative prices. This is true of anything. There is a point where producing too much reduces profit. Oil companies and car companies are in the business to make a profit they are not charitable institutions. Stockholders demand maximum return from their investments. Yes I have a Business degree and have taken several Economics courses and no they didn’t just figure out that making less means more profits many times it doesn’t.
“I don’t think we are going to see cheap gas prices like we have in the past.”
I fully agree. OPECkers and various other despotic regimes that typically rely on oil revenue are not going to be in a hurry to ramp up production. Geopolitical instability is going to keep oil prices high.
Militaries need fuel and high prices will reduce consumption by civilian consumers. Combine that with many democracies wanting to shift away from hydrocarbons will also mean there won’t be much effort taken to drop the price of oil.
It already looks like the Democrats in the USA are going to get slaughtered in the next election cycles. Does that mean they say “fook it” and aggressively push an anti-oil agenda or do they go all out to mitigate an electoral slaughter? We will see soon enough. With that being said, one has to realize that this is a global problem that politicians around the world are facing.
@Lou_BC–Agree high inflation and product shortages usually go against the party in control and so does high unemployment which we do not currently have. I doubt much will be done on guns despite the mass shootings in Buffalo and Uvalde the Republicans have been successful deflecting this as an issue. Pocketbook issues usually determine who wins in uncertain times.
Ford Motor gross profit for the quarter ending March 31, 2022 was $5.440B.
WHEW…THATS ROUGH….
LMAO
Public Service Announcement: If you notice fewer postings this week from some of TTAC’s Most Intelligent Commenters, please understand that they are (probably) very busy attending the invitation-only Bilderberg Meeting this week in D.C.
At that price the Camry is a steal. However, my fusion was fixed at a reasonable price so I will stick with it. The dealer even asked if I want to trade in my Fusion with 134,000+ miles on it. This illustrates how desperate dealerships are for used cars. Last year the local Ford dealer called my brother asking him to trade in his Ecosport. Even a rather ordinary vehicle like the Ecosport is a valuable commodity on the used car lot.
Can’t wait for the car dealers to go the way of the travel agency, the current situation shows they do nothing but get in the way. I have been considering buying a new car since with the inflated used car prices the difference between used and MRSP is as small as it will ever be. Unfortunately my local dealer has huge markup and out of state dealers have not been willing to work with me at all. If I could order directly from the manufacturer and pickup at a service center I would be counting the days to drive away in a new car that better fits our needs.