Quote:
Originally Posted by JST
The real question with both houses and cars is whether there will be a broader recession -- or, rather, when there will be a broader recession.
Until then, I agree with SARAFIL--there's a lot of silver linings in what's happening here for car companies, from rationalizing their production to moving to more ordering to driving up margins to giving them an incentive to bring more of these chip and software functions in-house to better control their supply chains. All of that suggests that even if there were an infinite supply of chips and labor tomorrow, the car companies might not increase production to the point it was in 2019.
There are going to be areas where prices have been crazy high where they will come down--eventually the market for Broncos will be saturated, eg., and the markups will go away. Overall, though, prices won't easily "return" in any real sense of that word.
But I also agree that the coming EVification of the auto biz is going to lead to some demand for legacy used cars, and that will keep the prices of those last ICE cars higher than we might be used to.
All of that goes out the window when there's an actual recession.
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Yep...plus I think more customers are now getting used to the idea of custom ordering a car from the factory and waiting... that's ultimately good for manufacturers as it allows them to produce the right amount of cars w/ the options that customers actually want. It had always been one of those articles of faith in the US that dealers had to have large inventories cause no one would ever wait for a car. And I think all manufacturers are figuring out ways to lower their "breakeven" point, allowing them to produce fewer vehicles at a higher margin.
While it's not widespread yet, I think we'll see more of the Tesla/Rivian style online configurators where you can actually "order" car directly online (even if it is still fulfilled by a traditional dealer). Polesetar seems to have figured out how to do that for example (from what I understand they basically pay the Volvo dealer closest to the customer a fixed %).