Interesting take on pricing and availability

[cb1111]

Is This The Auto Market Crash We’ve All Been Waiting For? (msn.com)

 

[Acadia18]

Overall, we are nearing predictions of when the car market may come down big.

Each month, I sit on a 2 and a half hour call with some analysts from Moody's, where they discuss where markets are, and where they're predicted to go.

The one thing I've learnt from those calls is that no one can predict where or when things are going to happen, and that scene in South Park where they base their economic decisions by chopping a chickens head off is scarily accurate.

 

[vjmvjm]

Is it just me, or does the article not provide any real evidence of why the market crash will happen? And exactly how does one define a "market crash"?

Sounds like this was written by a journalism major (actually, Martin holds a B.A. in English and Creative Writing) without much business / economic education.

The article mostly ignores the shift to EV production, the rise of the Chinese auto industry, and predicted overcapacity of auto plants worldwide. Which will have far more effect on prices than anything mentioned in the article.

 

[JC_451]

Dealers are making record profits with these limited inventory lots. Most manufacturers still aren't able to provide enough vehicles for them to start piling up at lots because demand is actually still very high, even with the high prices/borrowing costs.

I kept waiting for the correction too, but it just never came. Eventually, maybe, but who knows at this point. People buying a car at msrp are like heroes at the moment. I feel like we're still pretty far from things getting any better than that.

 

[MonkeyMD]

I've seen a few 0% APR lately which I haven't seen in the last 3 years.

 

[vjmvjm]

Dealers are making record profits with these limited inventory lots. Most manufacturers still aren't able to provide enough vehicles for them to start piling up at lots because demand is actually still very high, even with the high prices/borrowing costs.

I kept waiting for the correction too, but it just never came. Eventually, maybe, but who knows at this point. People buying a car at msrp are like heroes at the moment. I feel like we're still pretty far from things getting any better than that.

Depends on the vehicle. Consumer Reports just posted SUVs selling below MSRP, from 10 percent off a Chevrolet Equinox to 6 percent off a GMC Acadia (Cadillac, Ford, Lincoln, and Mazda also on the list). Higher prices and interest rates, especially for subprime borrowers, have affected demand.

 

[sterkrazzy]

I feel like right now the market is in this weird place where there's actual inventory and people aren't buying as much, dealers aren't selling as much, but there's been no price adjustments. Might see some lower prices here and there already, but I think we're right at the beginning of seeing prices coming down. Not that MSRP will come down, but discounts off MSRP should be coming back.

 

[cb1111]

I feel like right now the market is in this weird place where there's actual inventory and people aren't buying as much, dealers aren't selling as much, but there's been no price adjustments. Might see some lower prices here and there already, but I think we're right at the beginning of seeing prices coming down. Not that MSRP will come down, but discounts off MSRP should be coming back.

If you raise MSRP and give a discount, then you're back at the "real" MSRP.

 

[victorofhavoc]

If you raise MSRP and give a discount, then you're back at the "real" MSRP.

Yeah no kidding...

I bought an autobahn gti 1 year old with 13k miles on it for <23k$ in 2017 and I'm still being offered 20k+ for it from dealers today... That just tells me there are a lot of people willing to pay a lot more today than they were a few years back. If I'm a manufacturer and selling the same car from a few years back, all of my upfront costs have been accounted for at this point, so why change profits by producing more and charging less?

It's no different for my q7 either... They're offering me the same amount I paid for it, and an equivalent newer q7 will run me nearly 40k more than I paid for my current one.

I think that nothing is going to go back to the way it was before. EV are expensive to produce, so average car cost will keep climbing, especially as many countries try to reduce private vehicle ownership for environmental reasons. Gas cars are going to climb in cost just because they can and will be produced less (so per car development cost goes up). Really this reads to me like there will be more conversion and maturation in the manufacturer market by moving to direct to consumer models and scaling cars to be more product-like in nature, where all features ship on all models and you simply subscribe to what feature you want as the owner, regardless of being 1st, 2nd, 3rd owner, etc... Guess we'll see!