Auto industry Impact - due to shut down
- max225
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Curious what you all think?
Will it be a temporary blip and everything back to normal ?
Complete and gloom.
A bit of a mix.
I have been actively looking to score some deals now, and no one is budging on their pricing just yet...
stock price of Carmax seems to be ok
Tesla is soaring again
- goIftdibrad
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Bailouts will come in next 6 months for auto industry
brain go brrrrrr
- razr390
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I honestly hope this effects the dealership pyramid scheme the most
Desertbreh wrote: ↑Thu Oct 17, 2019 3:05 pm DFD. The forum where everybody makes the same choices and then tells anybody trying to join the club that they are the stupidest motherfucker to ever walk the earth.
- Tar
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I wanted to see if I could land a deal on a Rav4 but didn't even hear back from the guy. Basically just asked what he can do for me with pricing so I was surprised that it was such a one sided effort.max225 wrote: ↑Mon Apr 13, 2020 1:50 pm
Curious what you all think?
Will it be a temporary blip and everything back to normal ?
Complete and gloom.
A bit of a mix.
I have been actively looking to score some deals now, and no one is budging on their pricing just yet...
stock price of Carmax seems to be ok
Tesla is soaring again
My thought is that my spec doesn't exist on a lot and needs to be put in as an order. The plants that build the lifted hatchback hasn't been open for four weeks but they are starting to show signs of life. They will not stay shuddered for any longer then they have to. I am starting to get calls from skeleton crews at manufacturing plants, their pre-existing continuous improvement projects are back on the table.
My fear is a second round of outbreaks once non-essential groups go back to work and the hammer comes down again with four more weeks of this shit. I don't see how this virus won't keep making rounds?
- max225
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They will likely burn through their cash reserves in the next 3-6 months for sure. I don't think this is unlikely at all, especially if buying behavior is modified.Big Brain Bradley wrote: ↑Mon Apr 13, 2020 2:29 pm
Bailouts will come in next 6 months for auto industry
- max225
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It will, there will be major behavior modification that will stop the spread... or at least slow it down to a point where we can isolate immediately.Tarspin wrote: ↑Mon Apr 13, 2020 2:32 pmI wanted to see if I could land a deal on a Rav4 but didn't even hear back from the guy. Basically just asked what he can do for me with pricing so I was surprised that it was such a one sided effort.max225 wrote: ↑Mon Apr 13, 2020 1:50 pm
Curious what you all think?
Will it be a temporary blip and everything back to normal ?
Complete and gloom.
A bit of a mix.
I have been actively looking to score some deals now, and no one is budging on their pricing just yet...
stock price of Carmax seems to be ok
Tesla is soaring again
My thought is that my spec doesn't exist on a lot and needs to be put in as an order. The plants that build the lifted hatchback hasn't been open for four weeks but they are starting to show signs of life. They will not stay shuddered for any longer then they have to. I am starting to get calls from skeleton crews at manufacturing plants, their pre-existing continuous improvement projects are back on the table.
My fear is a second round of outbreaks once non-essential groups go back to work and the hammer comes down again with four more weeks of this shit. I don't see how this virus won't keep making rounds?
I think most and OEMs are betting and hoping that it will return back to "normal" so they refuse to do any sort of deals, until it get's real tough. And it hasn't just yet... They still have the cash... from the record 4 years.
- Huckleberry
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If anything, I hope it knocks the absurd new and used car prices out of the stratosphere.
- fledonfoot
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Dealers in the Northeast are effectively shut down for now. My General Manager is the only sales employee left in a dealership that sells 150-180 new cars a month and 80-100 used... with 20 salespeople, 4 managers and the GSM. Given the state mandated hoops involved for us to jump through to perform remote sales, it's largely not worth our time or effort until we can reopen as normal. If we do sell a car, it has to be worth our while - tough when the average Toyota carries about a 3-5% margin from MSRP to Invoice. Manufacturer has suspended floorplan financing repayments for now, and is just charging us interest on the mortgage for the building.
As it is, Toyota have effectively pulled all incentives for now. A lease on a standard Camry is $400/mo with $2500 down - the incentives all come from the manufacturer and that's what drives the deals. You're not going to see a dealer go $4k behind invoice on top of whatever the factory throws down because of the floorplan support... it costs us nothing to maintain the inventory for now for at least the next 90 days.
As it is, Toyota have effectively pulled all incentives for now. A lease on a standard Camry is $400/mo with $2500 down - the incentives all come from the manufacturer and that's what drives the deals. You're not going to see a dealer go $4k behind invoice on top of whatever the factory throws down because of the floorplan support... it costs us nothing to maintain the inventory for now for at least the next 90 days.
- coogles
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I genuinely think the only thing that will do that is interest rates returning to historical normals. As long as folks can finance a vehicle purchase, new or used, out for 72 months at 1.9%, there's not going to be as much downward pressure on auto prices. But as soon as even 720+ credit score people can't finance more than 36 months out below 5% (for example), prices will come down in a hurry.Huckleberry wrote: ↑Mon Apr 13, 2020 2:45 pm If anything, I hope it knocks the absurd new and used car prices out of the stratosphere.
Even though the fed cut rates to basically zero, real interest rates have risen on the home loan side, so we may start to see this come through in home prices quite soon. Those higher rates due to a long term economic outlook haven't quite hit the auto loan market yet, though, it seems.
- Huckleberry
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While I agree that the low interest rates and extended loan periods aren't helping anything, I think the one thing going for price drops right now is that car sales were already on the decline in 2019.coogles wrote: ↑Mon Apr 13, 2020 2:49 pmI genuinely think the only thing that will do that is interest rates returning to historical normals. As long as folks can finance a vehicle purchase, new or used, out for 72 months at 1.9%, there's not going to be as much downward pressure on auto prices. But as soon as even 720+ credit score people can't finance more than 36 months out below 5% (for example), prices will come down in a hurry.Huckleberry wrote: ↑Mon Apr 13, 2020 2:45 pm If anything, I hope it knocks the absurd new and used car prices out of the stratosphere.
Even though the fed cut rates to basically zero, real interest rates have risen on the home loan side, so we may start to see this come through in home prices quite soon. Those higher rates due to a long term economic outlook haven't quite hit the auto loan market yet, though, it seems.
- coogles
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Declining new car sales will only make the problem of expensive used cars even worse, doe.Huckleberry wrote: ↑Mon Apr 13, 2020 3:15 pm While I agree that the low interest rates and extended loan periods aren't helping anything, I think the one thing going for price drops right now is that car sales were already on the decline in 2019.
- Huckleberry
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In the short term until new cars come down in price and start being sold again.coogles wrote: ↑Mon Apr 13, 2020 3:16 pmDeclining new car sales will only make the problem of expensive used cars even worse, doe.Huckleberry wrote: ↑Mon Apr 13, 2020 3:15 pm While I agree that the low interest rates and extended loan periods aren't helping anything, I think the one thing going for price drops right now is that car sales were already on the decline in 2019.
- fledonfoot
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Another Cash for Clunkers debacle will completely fuck things up again. We're only just recovering from that.coogles wrote: ↑Mon Apr 13, 2020 3:16 pmDeclining new car sales will only make the problem of expensive used cars even worse, doe.Huckleberry wrote: ↑Mon Apr 13, 2020 3:15 pm While I agree that the low interest rates and extended loan periods aren't helping anything, I think the one thing going for price drops right now is that car sales were already on the decline in 2019.
- Apex
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How are you making new cars cheap again? Removing all of the government mandated safety tech?Huckleberry wrote: ↑Mon Apr 13, 2020 3:29 pmIn the short term until new cars come down in price and start being sold again.
- Huckleberry
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Lose enough sales and the market will figure it out.Apex wrote: ↑Mon Apr 13, 2020 3:32 pmHow are you making new cars cheap again? Removing all of the government mandated safety tech?Huckleberry wrote: ↑Mon Apr 13, 2020 3:29 pm
In the short term until new cars come down in price and start being sold again.
- fledonfoot
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economies of scale becomes an issue then...
A 2020 Corolla that sells for $21k has more safety equipment as standard than a series of $10k option packages on a Panamera or Cayenne.
- max225
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I noticed this as well, the dealers that had some cash on the hood effectively pulled it out. Want a car? Pay sticker.fledonfoot wrote: ↑Mon Apr 13, 2020 2:47 pm Dealers in the Northeast are effectively shut down for now. My General Manager is the only sales employee left in a dealership that sells 150-180 new cars a month and 80-100 used... with 20 salespeople, 4 managers and the GSM. Given the state mandated hoops involved for us to jump through to perform remote sales, it's largely not worth our time or effort until we can reopen as normal. If we do sell a car, it has to be worth our while - tough when the average Toyota carries about a 3-5% margin from MSRP to Invoice. Manufacturer has suspended floorplan financing repayments for now, and is just charging us interest on the mortgage for the building.
As it is, Toyota have effectively pulled all incentives for now. A lease on a standard Camry is $400/mo with $2500 down - the incentives all come from the manufacturer and that's what drives the deals. You're not going to see a dealer go $4k behind invoice on top of whatever the factory throws down because of the floorplan support... it costs us nothing to maintain the inventory for now for at least the next 90 days.
But whatever the previous financial structure was, is likely not going to return, pending what the OEMs what to do with their top lines. It would be wise to see how much "pent up" demand this situation is creating... but I doubt it is much.
- max225
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What exactly did C4C do that is so terrible? It took out quite a few shitty vehicles but the entire program only impacted 690k vehicles, considering that we are selling 13-7 million vehicles annually, that's not even 10% of one years' worth of sales. So it it a spit in the bucket once you realize it has been over a decade since that ran. .fledonfoot wrote: ↑Mon Apr 13, 2020 3:29 pmAnother Cash for Clunkers debacle will completely fuck things up again. We're only just recovering from that.
- max225
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New prices seem ok, actually especially when you consider feature content. New car appreciation is actually super LOW compared to what you're getting. Used cars did in fact go through the roof, and were way too high, but that was due to poors trying to upgrade their shitmobiles with something less shitty... their current actions will be interesting to watch. As will be unemployment, which IMO is the single biggest driver of auto sales, record low=record new/used sales.Huckleberry wrote: ↑Mon Apr 13, 2020 2:45 pm If anything, I hope it knocks the absurd new and used car prices out of the stratosphere.
We went from 3>15% in a matter of 3 weeks, if we return back to 3 by the end of the year it'll be ok, but that seems REALLY unlikely.
- Tar
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I might be making a site/customer visit this week, it will include a fresh set of latex gloves around contact points and mask to go with my usual PPE, doing my part not to shoot even though our family is strongly isolating. Doubt anything will go back to normal this summer. Just the sight of people garbed up will lower buyer demand for big ticket items like cars and houses IMO.max225 wrote: ↑Mon Apr 13, 2020 2:35 pmIt will, there will be major behavior modification that will stop the spread... or at least slow it down to a point where we can isolate immediately.Tarspin wrote: ↑Mon Apr 13, 2020 2:32 pm
I wanted to see if I could land a deal on a Rav4 but didn't even hear back from the guy. Basically just asked what he can do for me with pricing so I was surprised that it was such a one sided effort.
My thought is that my spec doesn't exist on a lot and needs to be put in as an order. The plants that build the lifted hatchback hasn't been open for four weeks but they are starting to show signs of life. They will not stay shuddered for any longer then they have to. I am starting to get calls from skeleton crews at manufacturing plants, their pre-existing continuous improvement projects are back on the table.
My fear is a second round of outbreaks once non-essential groups go back to work and the hammer comes down again with four more weeks of this shit. I don't see how this virus won't keep making rounds?
I think most and OEMs are betting and hoping that it will return back to "normal" so they refuse to do any sort of deals, until it get's real tough. And it hasn't just yet... They still have the cash... from the record 4 years.
My and I are going to get back to shopping for my wife's next SUV closer to July, by then we will see how much we are using cars, I'm strongly inclined to buy nothing. That's got to be a common sentiment in most households affected. If the :dills: aren't there I'm going to put it out there and say we will have little interest in taking on an extra loan. That gives us three months not four years, manufacturers are crazy not to unload stock.
- max225
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Yea, they simply don't have a corporate incentive at this point. And as everyone is home, nothing is getting done. Employees are furloughed at Carmax even.... in other words until it comes down from UP high everything is on standstill. And I don't think they CAN do anything even because the states won't let them...it will be seen as "insensitive".Tarspin wrote: ↑Mon Apr 13, 2020 4:44 pmI might be making a site/customer visit this week, it will include a fresh set of latex gloves around contact points and mask to go with my usual PPE, doing my part not to shoot even though our family is strongly isolating. Doubt anything will go back to normal this summer. Just the sight of people garbed up will lower buyer demand for big ticket items like cars and houses IMO.max225 wrote: ↑Mon Apr 13, 2020 2:35 pm
It will, there will be major behavior modification that will stop the spread... or at least slow it down to a point where we can isolate immediately.
I think most and OEMs are betting and hoping that it will return back to "normal" so they refuse to do any sort of deals, until it get's real tough. And it hasn't just yet... They still have the cash... from the record 4 years.
My and I are going to get back to shopping for my wife's next SUV closer to July, by then we will see how much we are using cars, I'm strongly inclined to buy nothing. That's got to be a common sentiment in most households affected. If the :dills: aren't there I'm going to put it out there and say we will have little interest in taking on an extra loan. That gives us three months not four years, manufacturers are crazy not to unload stock.
There is nothing to do but wait.
- Tar
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Yeah so when the waiting ends there will be a lot more people with no work and even more people with additional debt. I'm going on a limb and calling a protracted recession and the car industry is going to feel it IMO.max225 wrote: ↑Mon Apr 13, 2020 5:36 pmYea, they simply don't have a corporate incentive at this point. And as everyone is home, nothing is getting done. Employees are furloughed at Carmax even.... in other words until it comes down from UP high everything is on standstill. And I don't think they CAN do anything even because the states won't let them...it will be seen as "insensitive".Tarspin wrote: ↑Mon Apr 13, 2020 4:44 pm
I might be making a site/customer visit this week, it will include a fresh set of latex gloves around contact points and mask to go with my usual PPE, doing my part not to shoot even though our family is strongly isolating. Doubt anything will go back to normal this summer. Just the sight of people garbed up will lower buyer demand for big ticket items like cars and houses IMO.
My and I are going to get back to shopping for my wife's next SUV closer to July, by then we will see how much we are using cars, I'm strongly inclined to buy nothing. That's got to be a common sentiment in most households affected. If the :dills: aren't there I'm going to put it out there and say we will have little interest in taking on an extra loan. That gives us three months not four years, manufacturers are crazy not to unload stock.
There is nothing to do but wait.
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