Topic: The car market is turning.

[PJungnitsch]

https://www.reuters.com/business/autos-transportation/us-new-vehicle-sales-go-up-feb-vehicle-availability-improves-2023-02-24/

Interesting article

WHO BLINKS FIRST?

GM, Ford and Stellantis dominate the U.S. large pickup market, and for the past two years have been raising prices on their trucks to record levels as supply-chain snags limited production.

Dealers contacted by Reuters said that now, some customers are waiting for better deals, or are postponing purchases because the combination of high prices and higher interest rates put vehicles out of reach. The automakers face a choice between cutting prices using bigger rebates or subsidized loans, or keeping inventories tight.

"What they're doing is playing what I call the blink game - whoever blinks first. Especially for trucks," said Ohio dealer Rhett Ricart, whose Ricart Automotive Group sells Ford and GM trucks at different stores.

[EV-Light]

https://www.reuters.com/business/autos-transportation/us-new-vehicle-sales-go-up-feb-vehicle-availability-improves-2023-02-24/

Interesting article

WHO BLINKS FIRST?

GM, Ford and Stellantis dominate the U.S. large pickup market, and for the past two years have been raising prices on their trucks to record levels as supply-chain snags limited production.

Dealers contacted by Reuters said that now, some customers are waiting for better deals, or are postponing purchases because the combination of high prices and higher interest rates put vehicles out of reach. The automakers face a choice between cutting prices using bigger rebates or subsidized loans, or keeping inventories tight.

"What they're doing is playing what I call the blink game - whoever blinks first. Especially for trucks," said Ohio dealer Rhett Ricart, whose Ricart Automotive Group sells Ford and GM trucks at different stores.

But….

Brad Sowers, president of Jim Butler Auto Group in Missouri, said high prices are hitting demand. However, he wrote in an email, "manufacturers do not want to flood the market and be forced to quadruple incentive spending to drive demand that will reduce their margins."


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[Firm]

A quick check of inventory shows 120 Sierras on the lot at the moment.  13 of them are priced over $100k.  The cheapest Elevation with the 5.3 and crew cab is $74k.  That many vehicles on the lot would be a big number for that dealership even pre-COVID.  Shocking, I tell you.

Some dealers and manufacturers got used to making huge money off each vehicle when supply was low and pent up demand was high

General Motors Annual Net Income
(Millions of US $)

2022$8,915
2021$9,837
2020$6,247
2019$6,581

https://www.macrotrends.net/stocks/charts/GM/general-motors/net-income

Thinking that is going to have to change

They will reduce output…!

GM just did it: https://www.reuters.com/business/autos-transportation/us-new-vehicle-sales-go-up-feb-vehicle-availability-improves-2023-02-24/

Ford hasn’t done it yet, but if things don’t change I wanna bet they will.


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Yep, I've said it countless times in here, in the medium-long term manufactures can control supply, and they will keep it tight to ensure they're extracting maximum profitability from each unit that they do manage to move. They know that this isn't a volume market, so they're going to have to keep supply tight, costs undercontrol, and retails high to keep the shareholders happy.

There are some short-term exceptions where they might have carry-over inventory, or inventory that was already produced but sitting around waiting for chips, that they now need to move out, but that'll be short-lived and model specific.

[TheHire]

Those are also Ram Classics, the old body style that's continuing alongside the new one.

[PJungnitsch]

There is no doubt manufacturers and dealers would like to only sell $70,000 to $120,000 pickups and make big money for less work

But, whether they can force that in a competitive market is the thing.

I think they got fooled by the pent up demand, extra money and low interest rates post Covid into thinking the situation would stay that way forever

[Dante]

What do you think it would be a "good" price for this unit in today's "turning" market?

http://www.autotrader.ca/go/5-57673141

[ktm525]

BC until a few years ago. Clean carfax. Low miles. $30-31k.

[Dante]

BC until a few years ago. Clean carfax. Low miles. $30-31k.

Interesting Carfax shows no registration between Dec 2019 (first registration in Ontario) and Feb 2023 yet it appears it was driven as per mileage records... Was it driven illegally or maybe COVID break? I think there was a period in 2022-2021 when registration was halted (?!)

[PJungnitsch]

Thought this was interesting. Jeep/Dodge/Ram dealer lot vs Toyota dealer lot, same owner

https://www.youtube.com/watch?v=h_-ZqbXRfQU&t

[valuator]

Seeing subsidized financing rates on GMC now. 

Here is something that I find annoying, as I browse quasi-seriously for new vehicle for my wife:  A lot of stuff that I look at does not have a base or mid-trim model anymore.  The new GMC Canyon?  No SLE or SLT, it's Denali or AT4 only.  MDX?  No more base or Tech.  Starts at A-Spec.

[ktm525]

Poor? Take the bus is the new reality.

[valuator]

Poor? Take the bus is the new reality.

 

I just hate being forced to pay for features we're not interested in.

[ktm525]

Poor? Take the bus is the new reality.

 

I just hate being forced to pay for features we're not interested in.

Market does not care. There are now three levels of society.

1) Those that fly private (Laurentian elite in our country)
2) Those that drive fully loaded vehicles 
3) The bus riders.

#2 is rapidly dwindling, most headed to #3.

[Firm]

Poor? Take the bus is the new reality.

 

I just hate being forced to pay for features we're not interested in.

Market does not care. There are now three levels of society.

1) Those that fly private (Laurentian elite in our country)
2) Those that drive fully loaded vehicles 
3) The bus riders.

#2 is rapidly dwindling, most headed to #3.

 


I was at the Honda Dealer in Vaughan (Maple Honda) yesterday grabbing some parts and there was no shortage of inventory there...Plenty of Civics, CRV, HRV, etc hanging around on the lot.

[OliverD]

Seeing subsidized financing rates on GMC now. 

Here is something that I find annoying, as I browse quasi-seriously for new vehicle for my wife:  A lot of stuff that I look at does not have a base or mid-trim model anymore.  The new GMC Canyon?  No SLE or SLT, it's Denali or AT4 only.  MDX?  No more base or Tech.  Starts at A-Spec.

Makes sense for GMC as they attempt to move upscale. There's still a base Colorado.

[Firm]

Seeing subsidized financing rates on GMC now. 

Here is something that I find annoying, as I browse quasi-seriously for new vehicle for my wife:  A lot of stuff that I look at does not have a base or mid-trim model anymore.  The new GMC Canyon?  No SLE or SLT, it's Denali or AT4 only.  MDX?  No more base or Tech.  Starts at A-Spec.

I've seen that before when the model is entering it's last (or near last) production year....They'll cut the low end trims and only offer the higher levels. I assume it has to do with clearing out components that will go unused otherwise, and probably trying to maximize return on the model before it's killed. At that point in the vehicle's lifecycle it's more about managing profit and inventory than it is about pushing volume.
Not sure if that's the case for the Canyon and MDX as I am not sure when they were last updated.....The Canyon I think is pretty old now.

[ktm525]

Poor? Take the bus is the new reality.

 

I just hate being forced to pay for features we're not interested in.

Market does not care. There are now three levels of society.

1) Those that fly private (Laurentian elite in our country)
2) Those that drive fully loaded vehicles 
3) The bus riders.

#2 is rapidly dwindling, most headed to #3.

 


I was at the Honda Dealer in Vaughan (Maple Honda) yesterday grabbing some parts and there was no shortage of inventory there...Plenty of Civics, CRV, HRV, etc hanging around on the lot.

Greedy greedy greedy Honda and their overpriced wares.  They will get exactly what they deserve. I want $10k minimum on the hood of a Ridgeline! Maybe more.

[OliverD]

Seeing subsidized financing rates on GMC now. 

Here is something that I find annoying, as I browse quasi-seriously for new vehicle for my wife:  A lot of stuff that I look at does not have a base or mid-trim model anymore.  The new GMC Canyon?  No SLE or SLT, it's Denali or AT4 only.  MDX?  No more base or Tech.  Starts at A-Spec.

I've seen that before when the model is entering it's last (or near last) production year....They'll cut the low end trims and only offer the higher levels. I assume it has to do with clearing out components that will go unused otherwise, and probably trying to maximize return on the model before it's killed. At that point in the vehicle's lifecycle it's more about managing profit and inventory than it is about pushing volume.
Not sure if that's the case for the Canyon and MDX as I am not sure when they were last updated.....The Canyon I think is pretty old now.

This is the brand new Canyon he's talking about. The base model is now the Elevation.

[PJungnitsch]

Here is something that I find annoying, as I browse quasi-seriously for new vehicle for my wife:  A lot of stuff that I look at does not have a base or mid-trim model anymore.  The new GMC Canyon?  No SLE or SLT, it's Denali or AT4 only.  MDX?  No more base or Tech.  Starts at A-Spec.

Some accountant is saying to the manufacturer head office  'see how easy, only build the higher trims and watch the money roll in!'

Wonder how long the dealers can play it tough with lots now full of expensive vehicles, they must be paying plenty of interest on that stock sitting there

[JohnnyMac]

Here is something that I find annoying, as I browse quasi-seriously for new vehicle for my wife:  A lot of stuff that I look at does not have a base or mid-trim model anymore.  The new GMC Canyon?  No SLE or SLT, it's Denali or AT4 only.  MDX?  No more base or Tech.  Starts at A-Spec.

Some accountant is saying to the manufacturer head office  'see how easy, only build the higher trims and watch the money roll in!'

Wonder how long the dealers can play it tough with lots now full of expensive vehicles, they must be paying plenty of interest on that stock sitting there

I was thinking it's a cost savings thing, sure they likely more profit in higher trim levels, but there is also the simplicity of building less trim levels.  Choices used to be more plentiful but it seems like the only vehicles that have survived this simplicity of trims are "half tonne" pickup trucks, of which you probably have a bunch of options and trim levels.