Anyone following my Camaro saga thread can probably guess I've been paying attention to this. Recap/update:
I've been getting daily offers for the turbmaro since January. They've mostly been in the mid $16k range. In mid-March, they rose to just over $17k. On 3/23, the bottom fell out and their offer dropped to $12.9k. I was able to lock a $17k offer that day, but before closing, Carvana stopped buying cars altogether (unless taken as trade).
I've continued getting "offers" every day. For about a week beginning that day, the offers were mid $13s. For the next week, they were mid/upper $14s, and have been low $15s since. They're still not buying, though, so it's kind of moot.
Meanwhile, generally, dealer inventories of new cars have not quite doubled since mid-March, but aren't going to go up from here for a while since no new cars are leaving factories.
There seems to be growing concern among the manufacturers that they're going to run into a major issues when the restart for a variety of reasons like suppliers with their own issues, restarting equipment, etc, but also the fact there's never been a startup/restart on this scale with everyone bringing everything online at the same time.
Automotive News is reporting that the manufacturers are trying to talk to the Feds about coordinating their restart to minimize collective issues if each does their own thing. They fear that coordinating without prior government approval would expose them to antitrust issues.
It also sounds like
manufacturers are trying to convince dealers that there's going to be a huge pent up demand to buy new cars on the other side. That may or may not be true. I'm sure there is demand, but the pool of people that will be able to buy new cars is going to be smaller for a while. Maybe an initial burst and then a sustained fall off?
If used car prices fall substantially, I'd think that would siphon sales from new cars. In my Camaro saga, the savings of nearly new have not been compelling versus new. About 2-3% savings on purchase price is pretty weak, IMO. I think I'd need to see at least 10% purchase price savings for a used version to make sense. I have no idea how my situation applies to more normal people buying normal cars. Is the new/same model year/one model year used delta on high volume vehicles?
Again, if used car prices drop, that will apply further downward pressure on new car prices. Probably. 2020 model year production is probably over (or very close to it) for a lot of cars. New car inventories sound like they're larger than dealers would like, but they're only going to get smaller from here until a few weeks after production starts up again.
I think that suggests excess inventory that may be sold to the "pent up demand" buyers relatively quickly as things reopen and bring on a new normal inventory state with sales getting a bit harder. If manufacturer output is adjusted for that, dealers may not get to the point where they're stuck with piles of unsold inventory.
If the unsold used cars stack up because people aren't buying and the "pent up demand" buyers trade in additional cars for those new purchases, used car prices may plummet.
It's probably a good thing I don't do economic forecasting for a living.
