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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Other factors that will or may play roles either directly or downstream...
- inflation
- interest rates
- political stability/unrest
- COVID
- weather disasters
- shifting nature of migration, lifestyle, and workplace trends
We still don't really know what the underlying nature of the post-COVID or the couldn't-beat-it-so-we're-gonna-live-with-it-COVID world will look like. All by itself, that is likely to have massive impacts on vehicle and real estate markets because where we live, where we work, and how we move are all going to change in many interdependent ways.
Then add in all the external shocks that can put everything else on its head in an instant.
Some of these are going to happen. We just don't know for sure which and how much.