How in the world can auto makers still be in business?

[Deep River]

New car lots have been relatively empty for over a year now. Why do you all think this is not and has not been a big news story, and how can the auto makers stay in business if they aren't selling new cars?

Last year we waited seven months for a new F150 to be built and you still can't find very many on lots. That is Ford's biggest seller.

What gives?

 

[LR308]

I work at Autopark Honda in Cary. We get new cars every day. The problem is, they are all spoken for. The car hauler unloads them, and all the sales people run down and put sold signs in them. We used to have over 1000 new cars on the lot. Honda corporate says this is the new normal.

 

[QBD2]

Just because they ain’t on the lot don’t mean they ain’t selling. Dealers are selling cars as fast as they come in, and they’re selling lots of em. There’s just no surplus.

 

[timber]

Some of the car dealerships I see have plenty vehicles but the are mostly used instead of new. Not sure where they find so many used vehicles. Guess auctions and lease vehicles probably a lot of it

 

[surveyor]

The buyer by necessity is SOL these days.

The cars are going to people who have resources to make do until the car comes in.

Apparently, that's a lot of folks.

Wonder how many of them are working, or paying cash, or financing at some astronomical rate....

 

[thandy]

Some of the car dealerships I see have plenty vehicles but the are mostly used instead of new. Not sure where they find so many used vehicles. Guess auctions and lease vehicles probably a lot of it

They are driving up the used car market like crazy...

 

[45/70 hunter]

I work in a tractor dealership and it's the same way. Most tractors are pre-sold and some literally sell as unloading. The few that make it to the lot typically sell inside a week. It's to the point now where people are less picky and take what they can find.

 

[LR308]

We had a used 2022 Cadillac Escalade on the lot. The dealership paid well over new msrp for it. I can't remember what the used sticker sale price was, but it obviously sold, because I can find it on the website anymore. People are paying for what they want, cars are selling. Until that stops the market will be hot.

 

[Deep River]

Lots of conflicting signals out there. If you go to Ford’s website, you will find disclaimers of shortages of several different vehicle models and the reason given is supply chain, not hot market.

 

[Triggermortis]

I work in a tractor dealership and it's the same way. Most tractors are pre-sold and some literally sell as unloading. The few that make it to the lot typically sell inside a week. It's to the point now where people are less picky and take what they can find.

In terms of the Ford place here, if there is an unspoken for truck on the lot, the sticker price clearly indicates that a market adjustment is added to the total. I’ve seen that several times.
Last one I saw was $ 3995.00 market adjustment on a 36K truck.

 

[Firedog]

Wonder how many of them are working, or paying cash, or financing at some astronomical rate....

Most of them, some of them, no more than ever have before.

Lots of conflicting signals out there. If you go to Ford’s website, you will find disclaimers of shortages of several different vehicle models and the reason given is supply chain, not hot market.

IC's are the biggest hold up on most everything right now. There are only a few mfg. of IC's in the world and they are used in everything that has a power switch.. the chips are all different but they all have the same base components and that is the most constrained commodity in electronics right now. But that is a supply issue and the hot market exacerbates that.

 

[45/70 hunter]

In terms of the Ford place here, if there is an unspoken for truck on the lot, the sticker price clearly indicates that a market adjustment is added to the total. I’ve seen that several times.
Last one I saw was $ 3995.00 market adjustment on a 36K truck.

We go by the MSRP and there is no haggling in this market.

 

[sky hawk]

Lots of conflicting signals out there. If you go to Ford’s website, you will find disclaimers of shortages of several different vehicle models and the reason given is supply chain, not hot market.

Did you miss the massive chip shortage that has plagued the auto industry for the past 18 months? You didn’t see the videos of Ford stockpiling tens of thousands of vehicles on empty lots waiting on chips or the news reports of GM and Ford having to shut down operations because of it?

The supply issues for the electronics (and socialist payments) created a hot market which will not subside until the supply increases considerably and/or consumers run out of money. At the rate we’re going the latter is approaching faster than the former.

The answer to your original question is they are staying in business by selling every vehicle before it hits the lot at MSRP or above. Despite selling less than half of their previous volume, they are selling everything they have at top dollar.

 

[np307]

Why do you all think this is not and has not been a big news story

What rock have you been under?

 

[TheCloudX]

The buyer by necessity is SOL these days.

So true. When my truck was totaled in January, it took a long time to find a dealer that would make a deal. Most wanted above MSRP and I couldn't wait months for a new one.

Ford is paving the way for more of an order business, especially with EVs. Current estimates are supply chain issues will last another few years. Doubt we'll ever get back to the whole 15-20% MSRP negotiations.

 

[timekiller13]

In terms of the Ford place here, if there is an unspoken for truck on the lot, the sticker price clearly indicates that a market adjustment is added to the total. I’ve seen that several times.
Last one I saw was $ 3995.00 market adjustment on a 36K truck.

My uncle went to go buy a new Chevy a few weeks ago. Market adjustment was $15k over MSRP.

He said no way in hell anyone would pay that.

The truck was gone the next day.

 

[josh]

I’ve heard reports of people following the car hauler into the parking lot to try to buy one and they are already spoken for, same thing with atvs and side by sides

 

[woodmoose]

crossroads ford in Aberdeen/Southern Pines has lots of vehicles, but I have no idea if they are new or used

went by the ATV (Honda, polaris, etc) dealer in Rockingham today - absolutely nothing but trailers in their lot - don't know what was inside but that lot used to have all kinds of SxS, etc - not today

 

[Moose]

I ordered a new ford pu back in March my dealer told me they were running 10 weeks at the earliest most likely 14 weeks. I was sent my new Vin # less then 2 weeks after I ordered it. Truck was built middle of May and has been completed waiting shipment since then. The latest delivery estimate is week of July 17th. I'm not holding my breath on that date either.

 

[dobber]

i may have some inside information in regards to how they stay in business, all pretty simple math
Profit on a vehicle is lets say $10,000 (some variables, but for one particular model is spot on)
They build 800 units a day
235 days a year
thats $1.88B profit a year for one factory

 

[dc bigdaddy]

Most of them, some of them, no more than ever have before.


IC's are the biggest hold up on most everything right now. There are only a few mfg. of IC's in the world and they are used in everything that has a power switch.. the chips are all different but they all have the same base components and that is the most constrained commodity in electronics right now. But that is a supply issue and the hot market exacerbates that.

Case has a Combine plant in Grand Island, Nebraska. There's so many sitting on the yard, you can't count them riding by on the highway. I told the wife, they must be waiting on chips too.

 

[wcjones]

I ordered a new ford pu back in March my dealer told me they were running 10 weeks at the earliest most likely 14 weeks. I was sent my new Vin # less then 2 weeks after I ordered it. Truck was built middle of May and has been completed waiting shipment since then. The latest delivery estimate is week of July 17th. I'm not holding my breath on that date either.

my dads was like that earlier this year....he called the dealer and asked if he could just ride up there and pick it up. the dealer acted shocked that he would even asked that question and said something about union drivers having to be the ones to transport them...dont know if he was just BSing that part or they were waiting on chips

 

[nchunter]

My uncle went to go buy a new Chevy a few weeks ago. Market adjustment was $15k over MSRP.

He said no way in hell anyone would pay that.

The truck was gone the next day.

I went to buy a new Harley last week. Figured I have to pay MSRP. Nope, asking $6,000.00 over sticker. I said, “That’s fine. I’ll trade one in. Give me $6,000.00 over trade in value”. Of course that didn’t happen. They lost my business forever. I’ll just wait until the economy tanks and buy a used one.

 

[billyf]

I pretty sure its shortage of computer chips. I work in automation w/ Siemens/AB/Schneider. Servo drives/PLC or anything with computer chips in them the delivery is 6 months or longer. Its a mess currently.. We deserve it as we are a stupid country right now, We had an excellent business leader running things and we replaced him with an idiot. I know what I just said will be controversial. Its only controversial because we are a stupid country right now..

 

[dobber]

Its everything, again i may have been in an assembly plant or 10, and as recently as this afternoon, and a different one earlier in the week. The money making vehicles are being built - make no mistake - there are 2 F150 plants in the US, one makes more money per vehicle than the other
I have seen everything from sun roofs, tail lights and chips cause down time, the plant i was at today has only run 1 week since the start of June. Majority of plants typically have a 2 week shutdown in the summer for cleaning/mainenance this year most of the plants are only down for 1 week
Example one F150 plant is down a week, same building/facility they also make the Transit van, and they are down for 4 weeks, guess which they make the money on lol

 

[LR308]

I pretty sure its shortage of computer chips. I work in automation w/ Siemens/AB/Schneider. Servo drives/PLC or anything with computer chips in them the delivery is 6 months or longer. Its a mess currently.. We deserve it as we are a stupid country right now, We had an excellent business leader running things and we replaced him with an idiot. I know what I just said will be controversial. Its only controversial because we are a stupid country right now..

Two weeks to flatten the curve.

 

[sky hawk]

We picked up a new vehicle in March. It took 90 days to be delivered, but I’m still waiting on 2 chips to be retrofitted…. whenever they call me in….which I’m not holding my breath on.

 

[Southern]

I have bought three new trucks in the last 12 months. Have not paid over MSRP on any of them( and would not, MSRP is bad enough). Anybody stupid enough to pay over sticker deserves to.

 

[ezdemon72]

I ordered a new ford pu back in March my dealer told me they were running 10 weeks at the earliest most likely 14 weeks. I was sent my new Vin # less then 2 weeks after I ordered it. Truck was built middle of May and has been completed waiting shipment since then. The latest delivery estimate is week of July 17th. I'm not holding my breath on that date either.

It will most likely be there by then unless it gets damaged on train. My son got his truck recently ordered March 7th showed up May 18th (exactly when Ford said it would . Ordered a dually last August it didn’t show up until mid January(jumped chalk block in train)

you can track the rail car if dealership gives you the railcar number, it will most likely go to walkertown and from there it should be at dealership in 4-5 days

 

[Deep River]

Did you miss the massive chip shortage that has plagued the auto industry for the past 18 months? You didn’t see the videos of Ford stockpiling tens of thousands of vehicles on empty lots waiting on chips or the news reports of GM and Ford having to shut down operations because of it?

The supply issues for the electronics (and socialist payments) created a hot market which will not subside until the supply increases considerably and/or consumers run out of money. At the rate we’re going the latter is approaching faster than the former.

The answer to your original question is they are staying in business by selling every vehicle before it hits the lot at MSRP or above. Despite selling less than half of their previous volume, they are selling everything they have at top dollar.

No. I certainly didn’t miss it. As I said, we waited 7 months for our F150. The reason we waited was no chips.

My question was: how are the manufacturers making it, and why isn’t that situation a bigger story?

Dealer markups aren’t helping the manufacturers. I read up a bit on truck sales volume earlier today. Until very recently, it was way down. It is starting to make a comeback now, but still down quite a bit even compared to last year (when the whole chip thing started)