Anyone work for or with the auto industry right now? Ordered a car a few months back because I was told it would take up to 12 months to receive my order. No big deal. Either way, here we are less than three months later my order showed up. I think I'm going to pass on it and have them order me another because it's a little too early (Need to finish up my current lease and unlike my lucky friends I have no equity in it). They were warning me about MSRP and it could be higher. Are they changing the MSRP more often to adjust for inflation? Or is my sales guy just pushing for me to take it. I'm not stressing about it just trying to make a smart decision.

During the pandemic, there were massive supply chain issues that screwed up supply/demand ratios. Used cars soared in value. Most manufacturers were unable to react to the changing landscape quickly. Some, such as Tesla, were able to substitute components and re-write software to accommodate secondary, even tertiary suppliers. Now that supplies are restored legacy auto companies are finding that there's significantly reduced demand for their products. The only domestic automaker with significantly growing sales in the US is Tesla. GM had a very modest increase. Everyone else is down, some, such as Nissan, Honda, and Mazda, are down massively.

There's also a pending financial collapse looming as people abandon vehicles that they over-paid for during the pandemic and dealers can't resell them for what is owed on them. This is causing a plunge in used car values as nearly new cars are being dumped into the used car market at bargain rates. Further complicating matters is that many of the auto manufacturers operate finance arms that are going to have to eat those losses, further hurting legacy automakers. Again, a notable exception to this practice that doesn't finance their vehicles is Tesla.

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Edited 2 time(s). Last edit at 01/16/2023 10:15AM by ztirffritz.

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ztirffritz
During the pandemic, there were massive supply chain issues that screwed up supply/demand ratios. Used cars soared in value. Most manufacturers were unable to react to the changing landscape quickly. Some, such as Tesla, were able to substitute components and re-write software to accommodate secondary, even tertiary suppliers. Now that supplies are restored legacy auto companies are finding that there's significantly reduced demand for their products. The only domestic automaker with significantly growing sales in the US is Tesla. GM had a very modest increase. Everyone else is down, some, such as Nissan, Honda, and Mazda, are down massively.

There's also a pending financial collapse looming as people abandon vehicles that they over-paid for during the pandemic and dealers can't resell them for what is owed on them. This is causing a plunge in used car values as nearly new cars are being dumped into the used car market at bargain rates. Further complicating matters is that many of the auto manufacturers operate finance arms that are going to have to eat those losses, further hurting legacy automakers. Again, a notable exception to this practice that doesn't finance their vehicles is Tesla.

I'm thinking of rolling the dice... reorder (surrender my custom order)... and if things get worst I could always shop the "nearly new" used car market. My son will need a car in the next 12-18 months (when we feel he's ready) so I'm thinking of getting him his car "now" and driving it until he's ready.

If it were me, I'd delay. The car market is going to soften due to improving supply chains and reduced demand. The value in preordering will be greatly reduced.

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Edited 1 time(s). Last edit at 01/16/2023 11:23AM by mattkime.

A sales guy pushing for a sale? SHOCK

Hold off if you can. The price of cars is likely to plummet soon, but also keep in mind that many legacy automakers will no longer be around in 2-4 years.

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ztirffritz
There's also a pending financial collapse looming as people abandon vehicles that they over-paid for during the pandemic and dealers can't resell them for what is owed on them. This is causing a plunge in used car values as nearly new cars are being dumped into the used car market at bargain rates...

Not so much. There was a seemingly-huge drop in wholesale prices, but 1. it's a tiny drop compared to how much prices have swelled and 2. it's not being reflected in consumer prices as yet.

The expectation is that prices will drop mid-year, but there are a bunch of unknowns in the mix, including interest rates and the possibility of continued/renewed supply-constraints.

Latest advice:
If you’re lucky enough to be able to afford to wait to buy a car, that is probably still best practice, and if you’re unlucky enough to need to buy a car, there isn’t much choice anyway. If you’re one of those guys who tries to time the market, I wish you the best of luck.

[jalopnik.com]

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ztirffritz
The only domestic automaker with significantly growing sales in the US is Tesla.

Tesla just dropped pricing on its cars - by tens of thousands of dollars - due to weakening demand.

[www.bloomberg.com]

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It is what it is.

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ztirffritz
Hold off if you can. The price of cars is likely to plummet soon, but also keep in mind that many legacy automakers will no longer be around in 2-4 years.

I think that may be overstating things a bit.

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It is what it is.

Because of the automobile chip shortage ( [arstechnica.com] ), what I’ve been seeing is that the dealers tend to have the more expensive, fully loaded models available, but lower priced versions can be difficult to locate.

And Tiangou is correct: While supply chain issues may reduce in severity, they are expected to continue well into 2023.

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It is what it is.

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ztirffritz
…keep in mind that many legacy automakers will no longer be around in 2-4 years.

Yes, Tesla may not last:

[markets.businessinsider.com]

That's funny.

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Article Accelerator

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ztirffritz
…keep in mind that many legacy automakers will no longer be around in 2-4 years.

Yes, Tesla may not last:

[markets.businessinsider.com]

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1965 Pontiac GTO (1 minute commercial)...tiger

[youtu.be]

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ztirffritz
Hold off if you can. The price of cars is likely to plummet soon, but also keep in mind that many legacy automakers will no longer be around in 2-4 years.

based on your predictions, which legacy automakers will no longer be around in 2-4 years?

At some point you gotta start thinking someone for some reason is controlling the supply.

We know a guy that’s #2 at one of the largest Toyota dealerships in the SE and he says they’re not going back to the old way of selling. They keep very little inventory, you come in and order what you want and wait months. He said there’s no more haggling, you pay the price or it goes to the next person. This dealership used to keep 500-1000 new vehicles in stock, I just checked they have 15 new cars and trucks. It used to be nothing for them to have 100-150 Camry’s alone in stock.

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Grateful11

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Grateful11
We know a guy that’s #2 at one of the largest Toyota dealerships in the SE and he says they’re not going back to the old way of selling. They keep very little inventory, you come in and order what you want and wait months. He said there’s no more haggling, you pay the price or it goes to the next person. This dealership used to keep 500-1000 new vehicles in stock, I just checked they have 15 new cars and trucks. It used to be nothing for them to have 100-150 Camry’s alone in stock.

Does he frequently forget that he's in competition with other dealers and other brands?

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mattkime

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Grateful11
We know a guy that’s #2 at one of the largest Toyota dealerships in the SE and he says they’re not going back to the old way of selling. They keep very little inventory, you come in and order what you want and wait months. He said there’s no more haggling, you pay the price or it goes to the next person. This dealership used to keep 500-1000 new vehicles in stock, I just checked they have 15 new cars and trucks. It used to be nothing for them to have 100-150 Camry’s alone in stock.

Does he frequently forget that he's in competition with other dealers and other brands?

What competition?

Toyota's quickest fulfillment is on the RAV4 and it's still a 2-4 month wait in this region, with prices at MSRP. Doesn't matter which dealer you go to.

What are they going to compete on? Nicest chairs in the waiting room?

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Tiangou
What competition?

Other automakers.

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Grateful11
At some point you gotta start thinking someone for some reason is controlling the supply.

We know a guy that’s #2 at one of the largest Toyota dealerships in the SE and he says they’re not going back to the old way of selling. They keep very little inventory, you come in and order what you want and wait months. He said there’s no more haggling, you pay the price or it goes to the next person. This dealership used to keep 500-1000 new vehicles in stock, I just checked they have 15 new cars and trucks. It used to be nothing for them to have 100-150 Camry’s alone in stock.

that tactic is going to have to modify once new cars are plentiful again. if by pay the price your friend means MSRP or more (as is happening with the Rav4 Prime) he’s going to find people walking out the door including the folks on his waiting list. yes there’s a sucker born every minute but your friend will be kissing a lot of frogs first.

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If you want to fix our country, work with us in the states. statesproject.org

"Success isn't about how much money you make. It is about the difference you make in people's lives."--Michelle Obama

Thanks everyone. Still confused but I believe I'm just ordering another and hope it comes in before my lease is up. If it doesn't I'll turn in my GMC and drive my 2001 Cobra to and from work until it does (it will be summer by then). My mom ended up buying out her Pacifica Lease and my sister bought out her Buick due to the cost to replace their near perfect vehicles. If they are manipulating the market I truly don't know how that's going to go for them in the long run because people I know who usually replace their vehicles every 2-3 years ago are now buying out their leases and have no intention of replacing for awhile. I don't love my GMC Acadia and I was in a pretty bad accident in 2021 (Rear ended at about 60-70 MPH) or I'd consider keeping it. I did notice the used market is a little better now.

Tesla has the most productive factory in North America. They have no dealerships. Their national inventory is frequently less than that single dealership. That’s gobs of money not tied up in inventory. Toyota, Ford and Stellantis have noticed and are changing direction. GM might be doing the same but it’s not so obvious if they are.

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mattkime

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Tiangou
What competition?

Other automakers.

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Honda, Subaru and Mazda are dubious and likely will be the first casualties. Ford is likely next on the block. Ford is actually in a better position than GM but, ironically since they didn’t get a bailout in the last financial crisis their financial position is more tenuous. I actually think Toyota will fall. HARD. They don’t appear to have done anything to prepare for the shift to EVs. They bet big on hydrogen for some unknown reason and they’re doubling down on it. Unless they have some secret “magic bean” battery that performs cold fusion and heals lepers on weekends they’re in trouble.

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gadje

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ztirffritz
Hold off if you can. The price of cars is likely to plummet soon, but also keep in mind that many legacy automakers will no longer be around in 2-4 years.

based on your predictions, which legacy automakers will no longer be around in 2-4 years?

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We will still be using petroleum well into the latter half of the current century. I doubt any huge change is on the horizon for decades. The ev mandate for many states is 2035, but I have no doubt that will be extended. Furthermore, some states will not exclude gas entirely, thereby keeping many fleets operational.

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Hurts like a bastid...

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ztirffritz
Tesla has the most productive factory in North America. They have no dealerships. Their national inventory is frequently less than that single dealership. That’s gobs of money not tied up in inventory. Toyota, Ford and Stellantis have noticed and are changing direction. GM might be doing the same but it’s not so obvious if they are.

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mattkime

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Tiangou
What competition?

Other automakers.

Local mall has 2 aisles full of new and used Teslas. It's been like this for months. Occasionally I see the moving cars in and out. I think that is where the local sales office keeps their inventory. Anyway, they have car in stock, there is no shortage of new or used Teslas around here.

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ztirffritz
Tesla has the most productive factory in North America. They have no dealerships. Their national inventory is frequently less than that single dealership. That’s gobs of money not tied up in inventory. Toyota, Ford and Stellantis have noticed and are changing direction. GM might be doing the same but it’s not so obvious if they are.

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mattkime

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Tiangou
What competition?

Other automakers.

Tesla has the best chance of becoming the next Tucker.

Innovative features, but expensive compared to alternative EVs made by bigger manufacturers who are now catching up to the feature deficit.

E.g. Chevy's Supercruise beats Tesla's Autopilot in reviews.

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gadje

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ztirffritz
Tesla has the most productive factory in North America. They have no dealerships. Their national inventory is frequently less than that single dealership. That’s gobs of money not tied up in inventory. Toyota, Ford and Stellantis have noticed and are changing direction. GM might be doing the same but it’s not so obvious if they are.

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mattkime

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Tiangou
What competition?

Other automakers.

Local mall has 2 aisles full of new and used Teslas. It's been like this for months. Occasionally I see the moving cars in and out. I think that is where the local sales office keeps their inventory. Anyway, they have car in stock, there is no shortage of new or used Teslas around here.

Almost all of those Teslas are sold. They're awaiting delivery to customers. There might be a few inventory vehicles there, but not many. Usually vehicles that a customer has cancelled for some reason or other. Tesla production is actually being financed by Tesla's suppliers. They extend credit terms to Tesla, something like 10%, NET 30, or NET 60. Tesla are able to get the car into the customer's hands within 2 weeks of production. That means that Tesla gets to hold on to ALL of the money for a few weeks until the bill from the suppliers are due.

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ztirffritz
Almost all of those Teslas are sold. They're awaiting delivery to customers. There might be a few inventory vehicles there, but not many. Usually vehicles that a customer has cancelled for some reason or other. Tesla production is actually being financed by Tesla's suppliers. They extend credit terms to Tesla, something like 10%, NET 30, or NET 60. Tesla are able to get the car into the customer's hands within 2 weeks of production. That means that Tesla gets to hold on to ALL of the money for a few weeks until the bill from the suppliers are due.

You are assuming a lot here, but I will just correct you on your last statement. Tesla does not "get to hold on to ALL of the money for a few weeks" at all. They may get to hold onto some of it for a short period of time, but you totally forgot about things like payroll and costs of overhead. Those will take a chunk out of every dollar that comes in from customers before they ever get around to paying the suppliers.

Just get a fun used car?

[dailyturismo.com]

I looked at Tesla's web site and they have at least 5 unit of each model in stock within a 25 mile radius.

If I increase the radius to 200, I get around 40 units of model Y.

there are plenty of Tesla in stock around here.

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gadje
there are plenty of Tesla in stock around here.

Yep, and they're on mad sale now too. In fact, the current sale prices are making recent buyers mad.

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mattkime

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Tiangou
What competition?

Other automakers.

I'm not sure there are other automakers at this point.

Unless you want a pickup.

Camry is the best selling car.

RAV4 is the best selling SUV.

Toyota/Lexus has the top two spots for highest reliability.

Why would you look to another brand? You prefer lots of expensive maintenance?

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Tiangou

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mattkime

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Tiangou
What competition?

Other automakers.

I'm not sure there are other automakers at this point.

Unless you want a pickup.

Camry is the best selling car.

RAV4 is the best selling SUV.

Toyota/Lexus has the top two spots for highest reliability.

Why would you look to another brand? You prefer lots of expensive maintenance?

Why? If you want something at least a little interesting. Plus, their EV isn't very good. I'll take maintenance and unreliability for a sufficiently fun car.

Interesting article:
The pandemic may have ended the auto industry's age-old battle for market share

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It's all so interesting right now. Wife reminded me that we have two cars sitting in the garage (A 2001 Mustang Cobra and a 1971 VW Super Beetle) as well as hers and our sons car. So, not to stress out of having a vehicle. Just reorder and if they (Ford) want to mess with the incentives/rebates/MSRP too much tell them to take a hike and buy something else and use one of our "spare cars". I don't want to eat my current lease.

I think dealers are feeling the likelihood they are near death, so they are trying even harder to take advantage of whatever they can. Maybe they always have, and there is just a lot more complexity for them to use in a weaselly way.