Edmunds Members - Cars and Conversations (Archived)

tjc78

From what the Mercedes dealer told me, it is mostly the East Coast where sales are soft.

Good thing if you want one there are deals to be had especially on leases when they pass the $7500 tax credit on to you as a CCR

kyfdx

tjc78 said:

From what the Mercedes dealer told me, it is mostly the East Coast where sales are soft.

Good thing if you want one there are deals to be had especially on leases when they pass the $7500 tax credit on to you as a CCR

We had a post for the Audi RS GT

$182K MSRP

One year lease for a single payment of $14,000.
One of the best deals I've seen for any model (relative to MSRP)

tjc78

Crazy deal!

oldfarmer50

driver100 said:

In other news....almost 4000 car dealers are complaining that EVs aren't selling and they have money tied up in vehicles that are sitting on their lots.

A collective of 3,882 dealers from across 50 states notes that production has outpaced demand and has resulted in lots full of unsold EVs. Despite an increase of EV sales in 2023 (expected to be around 9% of all new passenger vehicles in 2023, per Atlas Public Policy’s EV Hub), consumers haven’t been snapping them up in meaningful numbers.

That’s what happens when government tries to manipulate the market. I wonder if they will now bail out the car companies who have lost billions chasing government mandates.

oldfarmer50

kyfdx said:

tjc78 said:

From what the Mercedes dealer told me, it is mostly the East Coast where sales are soft.

Good thing if you want one there are deals to be had especially on leases when they pass the $7500 tax credit on to you as a CCR

We had a post for the Audi RS GT

$182K MSRP

One year lease for a single payment of $14,000.
One of the best deals I've seen for any model (relative to MSRP)

I’m a little short on that payment, can you lend me $13,995?

kyfdx

oldfarmer50 said:

driver100 said:

In other news....almost 4000 car dealers are complaining that EVs aren't selling and they have money tied up in vehicles that are sitting on their lots.

A collective of 3,882 dealers from across 50 states notes that production has outpaced demand and has resulted in lots full of unsold EVs. Despite an increase of EV sales in 2023 (expected to be around 9% of all new passenger vehicles in 2023, per Atlas Public Policy’s EV Hub), consumers haven’t been snapping them up in meaningful numbers.

That’s what happens when government tries to manipulate the market. I wonder if they will now bail out the car companies who have lost billions chasing government mandates.

Ford made $6 Billion in profit, in the last four quarters
GM: $9.6 Billion

dino001

kyfdx said:

oldfarmer50 said:

driver100 said:

In other news....almost 4000 car dealers are complaining that EVs aren't selling and they have money tied up in vehicles that are sitting on their lots.

A collective of 3,882 dealers from across 50 states notes that production has outpaced demand and has resulted in lots full of unsold EVs. Despite an increase of EV sales in 2023 (expected to be around 9% of all new passenger vehicles in 2023, per Atlas Public Policy’s EV Hub), consumers haven’t been snapping them up in meaningful numbers.

That’s what happens when government tries to manipulate the market. I wonder if they will now bail out the car companies who have lost billions chasing government mandates.

Ford made $6 Billion in profit, in the last four quarters
GM: $9.6 Billion

Certainly not thanks of EV sales.

Also, I may be wrong, but I think their accounting methods consider vehicles sitting on dealer's lots as "sold" as far Ford and GM are concerned (with vehicle invoiced to the dealer and "cost of goods", i.e. manufacturing subtracted), but sales incentives, marketing expenses and other expenses that are paid to the dealers to facilitate the retail sales are reported on the on-going basis, we will know their real profit on current retail sales, when these vehicles are actually sold in retail, as all these additional costs will finally be attributed as GS&M expenses. Their past year high profits were based on fact that there were small incentives even as delaers lots were filling up with these crazy $70K+ trucks that nobody was able to buy anymore. The piper will come in 2024 to collect. And there will be multiple collections: incentives, writeoffs for discontinued programs (R&D and investment),

kyfdx

dino001 said:

kyfdx said:

oldfarmer50 said:

driver100 said:

In other news....almost 4000 car dealers are complaining that EVs aren't selling and they have money tied up in vehicles that are sitting on their lots.

A collective of 3,882 dealers from across 50 states notes that production has outpaced demand and has resulted in lots full of unsold EVs. Despite an increase of EV sales in 2023 (expected to be around 9% of all new passenger vehicles in 2023, per Atlas Public Policy’s EV Hub), consumers haven’t been snapping them up in meaningful numbers.

That’s what happens when government tries to manipulate the market. I wonder if they will now bail out the car companies who have lost billions chasing government mandates.

Ford made $6 Billion in profit, in the last four quarters
GM: $9.6 Billion

Certainly not thanks of EV sales.

Also, I may be wrong, but I think their accounting methods consider vehicles sitting on dealer's lots as "sold" as far Ford and GM are concerned (with vehicle invoiced to the dealer and "cost of goods", i.e. manufacturing subtracted), but sales incentives, marketing expenses and other expenses that are paid to the dealers to facilitate the retail sales are reported on the on-going basis, we will know their real profit on current retail sales, when these vehicles are actually sold in retail, as all these additional costs will finally be attributed as GS&M expenses. Their past year high profits were based on fact that there were small incentives even as delaers lots were filling up with these crazy $70K+ trucks that nobody was able to buy anymore. The piper will come in 2024 to collect. And there will be multiple collections: incentives, writeoffs for discontinued programs (R&D and investment),

Those are the taxable profits, after depreciation and amortization. Their actual revenue minus expenses is much higher than that. The car companies will all be okay.

dino001

I understand that, I misspoke saying it was just that, I just meant forward looking at the current inventory levels and take rate, the expenses will likely go up tremendously, as previous profit reflected low marketing/incentive spending of the past. In other words, the realized profit of last two quarters is based on the fact that vehicles are written as "sold" when they come to dealers' lots, not customers' garages, so when incentives suddenly need to go up to sell aging inventory on dealers lots and they refus to take new inventory until they can sell the old one, there is a "double whammy" effect not only wiping out current profit, but also previously booked profit. Profit/loss outlooks in this industry need to be taken on longer basis than one year, especially in times that we're going from wall to wall on sales, costs and other things.

kyfdx

And, yet.... both are projected for higher earnings, in the next four quarters

dino001

kyfdx said:

And, yet.... both are projected for higher earnings, in the next four quarters

Sure - and I have a bridge to sell. Quite inexpensively. Magic of Wall Street - take last two data points and extend them into infinity. Then of course act all surprised when things don't turn out that way.

Car sales industry as a whole is notorious for being bullish all the way to abyss. Every cycle.

kyfdx

dino001 said:

kyfdx said:

And, yet.... both are projected for higher earnings, in the next four quarters

Sure - and I have a bridge to sell. Quite inexpensively. Magic of Wall Street - take last two data points and extend them into infinity. Then of course act all surprised when things don't turn out that way.

Car sales industry as a whole is notorious for being bullish all the way to abyss. Every cycle.

Consensus opinion of dozens of stock analysts might be a little more informative than an article written about car dealers complaining.

fintail

tjc78 said:

From what the Mercedes dealer told me, it is mostly the East Coast where sales are soft.

Good thing if you want one there are deals to be had especially on leases when they pass the $7500 tax credit on to you as a CCR

Local MB dealer had/has an EQS (sedan) demo on the showroom floor. Only offering 10K off MSRP (so still in six figures). That's not going to be easy, even if it is an interesting enough car.

kyfdx

fintail said:

tjc78 said:

From what the Mercedes dealer told me, it is mostly the East Coast where sales are soft.

Good thing if you want one there are deals to be had especially on leases when they pass the $7500 tax credit on to you as a CCR

Local MB dealer had/has an EQS (sedan) demo on the showroom floor. Only offering 10K off MSRP (so still in six figures). That's not going to be easy, even if it is an interesting enough car.

The only deals are for leasing.

fintail

kyfdx said:

fintail said:

tjc78 said:

From what the Mercedes dealer told me, it is mostly the East Coast where sales are soft.

Good thing if you want one there are deals to be had especially on leases when they pass the $7500 tax credit on to you as a CCR

Local MB dealer had/has an EQS (sedan) demo on the showroom floor. Only offering 10K off MSRP (so still in six figures). That's not going to be easy, even if it is an interesting enough car.

The only deals are for leasing.

Still, 10K off a 120K car that isn't brand new and is about to be a model year old is wildly optimistic. That's one that might end up in a blowout lease in another market.

driver100

Good car sales go through booms and bust cycles. Car sales are good because inventory was low and there was pent up demand. Profits were high because if you needed a new car you would pay the high price to be able to get a car.
Now there is an oversupply of EVs sitting on dealers lots....they are forced to take a certain number from the manufacturer, these cars are going to be depreciating in value sitting on dealers lots. As one dealer said, I have $millions tied up in inventory that is hardly moving.

dino001

kyfdx said:

dino001 said:

kyfdx said:

And, yet.... both are projected for higher earnings, in the next four quarters

Sure - and I have a bridge to sell. Quite inexpensively. Magic of Wall Street - take last two data points and extend them into infinity. Then of course act all surprised when things don't turn out that way.

Car sales industry as a whole is notorious for being bullish all the way to abyss. Every cycle.

Consensus opinion of dozens of stock analysts might be a little more informative than an article written about car dealers complaining.

Don't even get me started with industry analysts... My stock brokers provide me with several research pieces. Lots of numbers, very little sense, backwards looking, almost always late, almost always wrong. Majority takes company provided numbers at face value, the least lazy ones use small scaling factors to appear that they did their own "research" regarding the future numbers. That's why when somebody comes with his/her real original numbers against the "consensus" (like that JP Morgan guy who called out GEs cashflow before Immelt's ousting) is such a big event. Rest of them, even if they are "independent" from the banking side, would not go flatout against a company that they know will soon be selling some "new paper" or shop for M&I advisor.

sda

I spotted this at Lowes today. Not a great pic, started to rain. I didn't realize how much taller even an older truck is compared to the Maverick.

sda

dino001

Just took a quick look at some inventory on competitor's website.
1. Over 10 thousand out of 100K of new F-150 (all trims) nationwide that are over 200 days in the market.
2. 3.3K/21K new Chevrolet Silverados 1500 with same "staying power" on dealers lots.
3. 4.5K/16K new RAMs 1500.

Ford's inventory seems to be really outsized beyond comprehension. But even for the other two it does not spell big future profits, if more than 10-20 percent of their inventory is over 6 months old already considering ridiculous pricing of these trucks (pickup your next luxury vehicle), tight consumer credit and ballooning dealers' floorplan expenses.

tjc78

I called this over a year ago. I said the automakers would eventually catch up and flood the lots with inventory.

It’s starting to happen. Only makes sense the big volume and profit makers (pickups) are stacking up first.

dino001

Especially these were most profitable, so the manufacturers focused on them. They raised prices, eliminated lowest trims AND supplied the market with most expensive ones anyway, like this country had hundreds of thousands of people wanting a new pickup truck making couple of hundred grand a year (target market for 70-100 thousand dollar vehicle). And surprise-surprise - they ran out of these customers quicker then you could say "when".

jmonroe1

sda said:

————————————————
A Maverick isn’t a real trick. It’s a large open-aired grocery getter. Real trucks have beds that are at least 6 feet long. So, if you wanted a truck and you bought a Maverick, you only went halfway. Having said that, nobody can argue that Ford hit it out of the park when they designed the Maverick. It will satisfy most wannabe truck owners.

jmonroe

dino001

Especially they somehow kept its pricing reasonable - unfortunately most dealers thought it was too reasonable...

stickguy

Well, it was always likely that they would over correct. Really hard to predict and go to exactly what was needed without going over first.

Market should move back toward what it used to be, with big discounts on wildly overpriced monster trucks! Once that happens lots will clear out. And maybe companies will make more models that will be popular instead of trying to keep milking the 1/2 to. Cash cow.

dino001

stickguy said:

Well, it was always likely that they would over correct. Really hard to predict and go to exactly what was needed without going over first.

Market should move back toward what it used to be, with big discounts on wildly overpriced monster trucks! Once that happens lots will clear out. And maybe companies will make more models that will be popular instead of trying to keep milking the 1/2 to. Cash cow.

Agreed. So my point is there is this inventory building up and aging, totally mismatched with demand, but the manufacturers act like nothing is wrong and analyst act like they believe them. Considering how high these monster truck prices are, clearing them from inventories will cost some decent marketing money from the manufacturers (dealers can't absorb all the cost) that has to go from profits, so all these future profit projections are basically bogus, based on taking last 12 months and assuming nothing or very little will change. These guys have decades of track record of being behind the ball at every corner and being constantly surprised by four major natural disasters, i.e. Spring, Summer, Fall, Winter...

explorerx4

Some of it is the dealers not willing discount their inventory.
I bought an SUV a couple of months ago but stated out looking at pickup trucks.
To get any normal discount, I would have had to travel 500 miles.
Local dealers were only offering small discounts and still had add on stickers.

roadburner

I really think Jeep's relatively high prices are hurting their sales. A 2024 Sahara 4xe equipped like mine would cost $13,875 more than what I paid for my 2021- and that's taking into account the $7,500 tax credit.

stickguy

Everything seems to have gotten too expensive. Not just trucks and jeeps.

kyfdx

stickguy said:

Everything seems to have gotten too expensive. Not just trucks and jeeps.

Drove by a BP station yesterday that had RUG advertised for $2.84

dino001

explorerx4 said:

Some of it is the dealers not willing discount their inventory.
I bought an SUV a couple of months ago but stated out looking at pickup trucks.
To get any normal discount, I would have had to travel 500 miles.
Local dealers were only offering small discounts and still had add on stickers.

Fantasies and dreams are always hardest to let go.

oldfarmer50

kyfdx said:

oldfarmer50 said:

driver100 said:

In other news....almost 4000 car dealers are complaining that EVs aren't selling and they have money tied up in vehicles that are sitting on their lots.

A collective of 3,882 dealers from across 50 states notes that production has outpaced demand and has resulted in lots full of unsold EVs. Despite an increase of EV sales in 2023 (expected to be around 9% of all new passenger vehicles in 2023, per Atlas Public Policy’s EV Hub), consumers haven’t been snapping them up in meaningful numbers.

That’s what happens when government tries to manipulate the market. I wonder if they will now bail out the car companies who have lost billions chasing government mandates.

Ford made $6 Billion in profit, in the last four quarters
GM: $9.6 Billion

Yeah but they lost a billion or two of that on their EV division. I’m no captain of industry like you guys, I’m just a dumb ex farmer, but I know if the government wanted me to grow corn at a loss I’d be pretty miffed.

oldfarmer50

dino001 said:

Especially these were most profitable, so the manufacturers focused on them. They raised prices, eliminated lowest trims AND supplied the market with most expensive ones anyway, like this country had hundreds of thousands of people wanting a new pickup truck making couple of hundred grand a year (target market for 70-100 thousand dollar vehicle). And surprise-surprise - they ran out of these customers quicker then you could say "when".

You would think these companies would have done a little more research into their market demographics.

oldfarmer50

stickguy said:

Everything seems to have gotten too expensive. Not just trucks and jeeps.

Well, just inflation alone would have raised prices about 20%. We’re never going back to 2019 prices.

tjc78

@stickguy said:
Everything seems to have gotten too expensive. Not just trucks and jeeps.

Agreed! 85K for my Mercedes is nuts. (Not that I paid anywhere near that!)

dino001

oldfarmer50 said:

dino001 said:

Especially these were most profitable, so the manufacturers focused on them. They raised prices, eliminated lowest trims AND supplied the market with most expensive ones anyway, like this country had hundreds of thousands of people wanting a new pickup truck making couple of hundred grand a year (target market for 70-100 thousand dollar vehicle). And surprise-surprise - they ran out of these customers quicker then you could say "when".

You would think these companies would have done a little more research into their market demographics.

Yeah… no. Last two data points and extend…

stickguy

kyfdx said:

stickguy said:

Everything seems to have gotten too expensive. Not just trucks and jeeps.

Drove by a BP station yesterday that had RUG advertised for $2.84

well, I was referring to cars, but cheap gas always helps sell gas guzzlers!

dino001

oldfarmer50 said:

stickguy said:

Everything seems to have gotten too expensive. Not just trucks and jeeps.

Well, just inflation alone would have raised prices about 20%. We’re never going back to 2019 prices.

Stellantis raised its transaction prices (combination of stickers and trim mix) by over 50 percent, basically making them in par with the other two, sometimes higher. Ford moved by a little less. GM was least greedy from the three, if you can believe it. Several brands stayed way more tame (Subaru, Nissan, Toyota, Honda, even though last two had dealers do the price hikes for them). There is some room on the down side for domestics to fill.

stickguy

oldfarmer50 said:

dino001 said:

Especially these were most profitable, so the manufacturers focused on them. They raised prices, eliminated lowest trims AND supplied the market with most expensive ones anyway, like this country had hundreds of thousands of people wanting a new pickup truck making couple of hundred grand a year (target market for 70-100 thousand dollar vehicle). And surprise-surprise - they ran out of these customers quicker then you could say "when".

You would think these companies would have done a little more research into their market demographics.

if they had, they would have planned on making a lot more Mavericks!

roadburner

Over on the CCBA topic I mentioned that my Wrangler 4xe averaged 107.5 mpg at the last fill up. The only problem is that it takes upwards of 90 seconds to plug in/unplug it daily. I really need to find a guy that I can pay to do it as it's way too much stress and exertion for me to deal with.

driver100

The auto analyst on this mornings news said a normal supply of cars is about 60 days worth. The EVs on hand represent a one year supply.
Look for a fire sale real soon.

tjc78

@driver100 said:
The auto analyst on this mornings news said a normal supply of cars is about 60 days worth. The EVs on hand represent a one year supply.
Look for a fire sale real soon.

It’s already here. Especially on leases.

driver100

tjc78 said:

@driver100 said:

The auto analyst on this mornings news said a normal supply of cars is about 60 days worth. The EVs on hand represent a one year supply.

Look for a fire sale real soon.

It’s already here. Especially on leases.

Surprised they would have the big discounts on leases and not on out right buying one. Not sure what the thinking is. You would thinking a sale would be better than a lease.....but, maybe more fence sitters would rather lease than buy.

driver100

I saw a lady driving in one of these today at Wynne-Dixie;

Then waited in the check out line for a long time as one guy searched for his credit card to pay, and tried to use his medicare card a few times before the lady next in line looked through his wallet to find his credit card..

oldfarmer50

driver100 said:

The auto analyst on this mornings news said a normal supply of cars is about 60 days worth. The EVs on hand represent a one year supply.
Look for a fire sale real soon.

I think I read that Ford was already losing $20k on each EV sold so I don’t know how much more wiggle room they have.

tjc78

@driver100 said:
Surprised they would have the big discounts on leases and not on out right buying one. Not sure what the thinking is. You would thinking a sale would be better than a lease.....but, maybe more fence sitters would rather lease than buy.

As of now the $7500 tax credit gets passed onto the leasee as a CCR, on a buy you have to wait for it.

Leasing an EV right now makes more sense than buying.

Michaell

driver100 said:

Surprised they would have the big discounts on leases and not on out right buying one. Not sure what the thinking is. You would thinking a sale would be better than a lease.....but, maybe more fence sitters would rather lease than buy.

Also important to think about it like a subscription ... with a lease, the customer is forced to either buy out the lease at the end (rare), or turn the car in and lease again, resulting in another transaction for the manufacturer and dealer.

driver100

@Michaell A while ago we talked about subscription fees for options on new cars. Looks like it is coming soon.....according to CBS News, leasing is like a subscription.....automatic renewals too;

CBS EVENING NEWS
Auto industry eyes subscription fees as future multi-billion-dollar revenue stream
evening-news
BY CARTER EVANS

DECEMBER 1, 2023 / 8:26 PM EST / CBS NEWS


Los Angeles — Jason Luu's 2020 Volvo XC90 has state-of-the-art remote features, such as the ability to start and stop the engine and unlock and lock the car from an app on his smart phone.

But if he wants to keep using those features after a free trial, it will cost $200 a year.

"It's a little disheartening," Luu told CBS News.

Subscriptions are shifting into overdrive in the auto industry. For certain Toyota vehicles, the remote start option comes at a price of $8 per month after the expiration of a free trial, while BMW charges $20 a month for enhanced cruise control on certain vehicles.

While Ford offers its hands-free driving "BlueCruise" assisted cruise control option for some of its vehicles, including the all-electric F-150 Lightning, are drivers willing to pay $75 per month for it?
"So if your car payment is 600 bucks a month, it's now $675," Weaver said.

General Motors projects subscription fees to bring in as much as $25 billion a year by 2030. For context, Netflix's entire revenue for fiscal year 2023 was $32.74 billion.

Read it and a video at;
https://www.cbsnews.com/news/auto-industry-subscription-fees-offset-electric-vehicle-production-costs/

oldfarmer50

I would never pay for that stuff just on principle but also because I would never buy a car with those features in the first place.

It makes you wonder though, will they be eliminating trim levels and just having an on-off for features already installed on all cars?

driver100

oldfarmer50 said:

I would never pay for that stuff just on principle but also because I would never buy a car with those features in the first place.

It makes you wonder though, will they be eliminating trim levels and just having an on-off for features already installed on all cars?

One of the wealthiest Canadians Ted Rogers made his money from cable TV companies and cell phones mostly. He loved products that had subscriptions, that way the consumer was paying him automatically every month.....a steady stream of income.
I guess the car companies caught on.