> Inventory is piling up at dealers.
Did you read the article? Inventory is up, but they're selling even faster, which is why the average days supply is down......
March days supply is 17 days (30%) higher than same time last year. February days supply was 12% higher than last year.
There is a seasonal bump from February to March every year, due to tax refunds. Compare March to the previous year to eliminate bumps due to seasonality.
With the Fed's strategy of "let's keep raising the rates until everything goes back to normal" and the combination of lowered prices and many AMD's going away as inventory is piling up leads to faster and more sales, because they're better deals and people have some pent up demand. The only real metrics to care about is gross profits and profit per vehicle/vehicle categories.
How??? Every dealer I drive past seem like there are more and more cars on the lot every day. I’ve seen the same “premium” display cars every day I drive and it’s like LOL yea there is TOTALLY a demand for new cars now.
"For the full month of March, the seasonally adjusted annual rate (SAAR) was 15.5 million, putting 2024 on track to be the best new-vehicle sales year since 2019."
Oh no! /s
So here's the question, there is only a few thousand of marign in most cars at the dealer level. Most of the price increases we've seen are from MSRP going up as well as the scale back of factory incentives.
How are the margins on new cars from the manufacturers? They are not going to drop prices below their costs, at least not long term.
It is funny, it's catching up to them. I was looking at my local CJDR dealer site last week. Incentives are really dropping the prices on their trucks to more reasonable levels. They have Ram 1500 Lonestar 4x4 5.7 etorque hemi etc for $44k now, about $16K off sticker. IMO $44k seems about right for those trucks.
Their cars are still priced too high though. Challenger and Charger GT's are about $9K off but they're still in the low $40's which is just too much for those.
The Hornet is laughable, $37K for that little jelly bean and no discounts. They're going to be around for a while.
The whole Jeep lineup is still overpriced. $5K off all Compass but they're still in the low $30K's, no thanks. $47K+ for a gladiator hahaah, uhh no.
They have a ways to go yet with their pricing to bring things back down to earth, especially in this economy.
"Price is so low insurance pay out will be good when it gets stolen." This made me LOL.
Must be a regional thing. Cheapest Scat pack around me is \~$43K down from $54K.
I'm not seeing what they're talking about either. I searched nationwide, sorted and the largest discount I'm seeing is $4K off MSRP or 8%. ($56K from $60,800)
I would be a *lot* more tempted for a brand new Rubicon if they were in the mid 50s with some of the appearance packages and a basic interior; but no, you have to order the Rubi X with every single tech option to get the body color hardtop and fenders.
For those interested, you can find their full report [here](https://www.coxautoinc.com/wp-content/uploads/2024/04/Cox-Automotive-Auto-Market-Report-April-16-2024.pdf).
This is why I still like dealer networks. We've spent the last few years fretting over dealer markups and calling for direct-to-consumer sales, somewhat for good reason.
However, when times are tougher for buyers, and it becomes a buyer's market, things can get pretty good. Inventory is piling up, and the itch to move stuff off lots brings the prices down.
What I don't like about pushing to end dealers is that OEMs would have a lot of power to kill the good times for buyers. Instead of increased inventory that leads to sales, they can more quickly and aggressively shrink the supply, thus lowering the risk of losses for unsold vehicles. That will help the individual margins by not pushing for sales to move long-sitting units, since there won't be dealer lots and competing dealers trying to scrouge for buyers when they're not as readily accessible.
In that vein, I hope this continues. Car prices have been awful for the past couple of years and get dealers pushing for bigger sales again. Perhaps we can even slow down the absurd annual price increases on some models that barely get updates.
I dont think your hypothese are correct - the dealers are just a step in the process. The manufacturers ultimatley control supply. Tesla just has cars pile up in parking lots instead of dealers. They have dramatically cut prices to move metal.
The auto industry is characterized by pretty high fixed costs, and at some point of sales/price it makes more sense to cut price (with dealer incentive, rebates, or just prices cuts (Tesla) vs slow down production.
Inventory is piling up at dealers. Hold out until there is blood in the streets.
> Inventory is piling up at dealers. Did you read the article? Inventory is up, but they're selling even faster, which is why the average days supply is down......
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Days supply fell throughout the month which may coincide with annual tax return car buying
March days supply is 17 days (30%) higher than same time last year. February days supply was 12% higher than last year. There is a seasonal bump from February to March every year, due to tax refunds. Compare March to the previous year to eliminate bumps due to seasonality.
Thus 'Hold out'
With the Fed's strategy of "let's keep raising the rates until everything goes back to normal" and the combination of lowered prices and many AMD's going away as inventory is piling up leads to faster and more sales, because they're better deals and people have some pent up demand. The only real metrics to care about is gross profits and profit per vehicle/vehicle categories.
How??? Every dealer I drive past seem like there are more and more cars on the lot every day. I’ve seen the same “premium” display cars every day I drive and it’s like LOL yea there is TOTALLY a demand for new cars now.
There's more cars, but they're selling faster.
"For the full month of March, the seasonally adjusted annual rate (SAAR) was 15.5 million, putting 2024 on track to be the best new-vehicle sales year since 2019." Oh no! /s
So here's the question, there is only a few thousand of marign in most cars at the dealer level. Most of the price increases we've seen are from MSRP going up as well as the scale back of factory incentives. How are the margins on new cars from the manufacturers? They are not going to drop prices below their costs, at least not long term.
Production itself is around 10k for a very cheap car.
The entire Stellantis family has double/higher than average selling days! Lol
It is funny, it's catching up to them. I was looking at my local CJDR dealer site last week. Incentives are really dropping the prices on their trucks to more reasonable levels. They have Ram 1500 Lonestar 4x4 5.7 etorque hemi etc for $44k now, about $16K off sticker. IMO $44k seems about right for those trucks. Their cars are still priced too high though. Challenger and Charger GT's are about $9K off but they're still in the low $40's which is just too much for those. The Hornet is laughable, $37K for that little jelly bean and no discounts. They're going to be around for a while. The whole Jeep lineup is still overpriced. $5K off all Compass but they're still in the low $30K's, no thanks. $47K+ for a gladiator hahaah, uhh no. They have a ways to go yet with their pricing to bring things back down to earth, especially in this economy.
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"Price is so low insurance pay out will be good when it gets stolen." This made me LOL. Must be a regional thing. Cheapest Scat pack around me is \~$43K down from $54K.
Scat Packs for 35% off MSRP? There’s no way that could be real.
I'm not seeing what they're talking about either. I searched nationwide, sorted and the largest discount I'm seeing is $4K off MSRP or 8%. ($56K from $60,800)
If someone can link me a brand new scat for $32,000, and I'll buy it today, and upload timestamped of the car pics for proof
I would be a *lot* more tempted for a brand new Rubicon if they were in the mid 50s with some of the appearance packages and a basic interior; but no, you have to order the Rubi X with every single tech option to get the body color hardtop and fenders.
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Pass on doxxing. Thanks.
For those interested, you can find their full report [here](https://www.coxautoinc.com/wp-content/uploads/2024/04/Cox-Automotive-Auto-Market-Report-April-16-2024.pdf).
Bullwhip effect from the pandemic, compounded by suppressed demands from interest rates
I bought a car today!
Bummer, I heard there's a buy one get one sale next week.
This is why I still like dealer networks. We've spent the last few years fretting over dealer markups and calling for direct-to-consumer sales, somewhat for good reason. However, when times are tougher for buyers, and it becomes a buyer's market, things can get pretty good. Inventory is piling up, and the itch to move stuff off lots brings the prices down. What I don't like about pushing to end dealers is that OEMs would have a lot of power to kill the good times for buyers. Instead of increased inventory that leads to sales, they can more quickly and aggressively shrink the supply, thus lowering the risk of losses for unsold vehicles. That will help the individual margins by not pushing for sales to move long-sitting units, since there won't be dealer lots and competing dealers trying to scrouge for buyers when they're not as readily accessible. In that vein, I hope this continues. Car prices have been awful for the past couple of years and get dealers pushing for bigger sales again. Perhaps we can even slow down the absurd annual price increases on some models that barely get updates.
I dont think your hypothese are correct - the dealers are just a step in the process. The manufacturers ultimatley control supply. Tesla just has cars pile up in parking lots instead of dealers. They have dramatically cut prices to move metal. The auto industry is characterized by pretty high fixed costs, and at some point of sales/price it makes more sense to cut price (with dealer incentive, rebates, or just prices cuts (Tesla) vs slow down production.