Sad New Years Everyone!
Car sales are way off.
Speaking with a friend from financing at the local dealerships of Honda, Toyota and Nissan…sales are down. Inventory is starting to build. One Toyota EV has sold.
He is saying interest rates are chasing people off. The middle market is missing. It is not a marginal thing.
The production lines are having no problems now.
This is absolutely true. It’s amazing how quickly the tight auto market is turning around. Last month, the Mannheim used car price index dropped by the most ever in recorded history. And just cruise by some car dealers and suddenly those empty lots are half full … maybe by the end of the quarter they will be full. And then suddenly there will be ads screaming about “$2k rebates”, “below MSRP”, and the usual auto selling stuff from pre-covid days.
Depends which vehicle. Toyota Sienna is out 8-10+ months, for example. Be interesting to see how that changes over the next month or three.
Mark,
I am always careful with this source. He is a finance guy in a car dealership. But this was true.
They were all hoping the shortages would allow them to behave, and be valued like Ferrari
Market Cap 43.39B
Price to sales: 8.14
Full Time Employees: 4,636
Last night, I posted on an automotive group, following up on the late local news cheering “used car prices falling”. Right now, on Autotrader, in metro Detroit, there is a three year old Chevy Sonic (subcompact hatchback, the sort of car the automakers assure us “no-one wants”), in a trim so basic it has crank-up windows, with 11k on the clock. The dealer wants $18,995 for it. As I was tossing old paperwork in the shredder over the weekend, I found a listing I had printed out from Autotrader in March 2020, days before the plague got to Michigan. Also a three year old Sonic hatchback with crank windows and 15k on the clock. Dealer was asking $10,755, so it is still a 76% price escalation, for a sort of car “no-one wants”.
Steve
I would guess that hard to find cars, perhaps like the subcompact you mention above, may still have elevated prices at the moment.
We are only in mid January is the better argument. Everything is on a timeline.