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Carmakers feel chip crisis easing

bloomberg.com

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Re: Carmakers feel chip crisis easing

#11

Post by geoduck14 »

WXLCKNO wrote: post #6
RyanShook wrote: post #2

I saw an article recently saying that dealerships and car makers want to keep inventories low because they like the post-covid margins they're experiencing. When I paid 5k over msrp a few months ago the salesperson claimed they wanted more inventory because salespeople were unable to hit the volume goals they have. Not sure who to believe but I'm sure the truth lies somewhere in between.

Really glad that dealers in Canada can't charge over MSRP for new vehicles.

I tried to buy a new car yesterday. The price was exactly MSRP, but there were plenty of ad-ons. That I couldn't remove "if I wanted to buy that car".

In the end, there were about $11k in "extras" and they low balled me on my trade-in vehicle. I ended up walking away.

Re: Carmakers feel chip crisis easing

#12

Post by BenoitEssiambre »

csours wrote: post #8
RyanShook wrote: post #2

I saw an article recently saying that dealerships and car makers want to keep inventories low because they like the post-covid margins they're experiencing. When I paid 5k over msrp a few months ago the salesperson claimed they wanted more inventory because salespeople were unable to hit the volume goals they have. Not sure who to believe but I'm sure the truth lies somewhere in between.

Disclosure: I work for GM. Anything expressed here is solely my own opinion and experience. I think each statement is true. Context: for ages, OEMs (the factory) have had a belief that Americans will not wait to buy a car. There's also a bit of a prisoner's dilemma: if any automaker wanted to trim inventories, the customer could go to a competing automaker's lot and buy today. Since customers will not wait to buy a c…

>Dealerships hate carrying extra inventory because it costs money to finance the vehicles until they sell them.

Note that with interest rates having been really low, even negative in real term, an inventory was almost a good investment with relatively good returns (if you could get your hands on it). Now with rising interest rates and falling inflation, the cost of financing might become a burden again.

Re: Carmakers feel chip crisis easing

#13

Post by etempleton »

AmVess wrote: post #5
RyanShook wrote: post #2

I saw an article recently saying that dealerships and car makers want to keep inventories low because they like the post-covid margins they're experiencing. When I paid 5k over msrp a few months ago the salesperson claimed they wanted more inventory because salespeople were unable to hit the volume goals they have. Not sure who to believe but I'm sure the truth lies somewhere in between.

I'm sure they will all return to the way they did things prior to covid. All it will take is GM or Ford to start stacking new vehicles on car lots, and all of them will have to follow along.

Ford leadership seems to really want to move to the Tesla preorder model, but changing this will be extremely difficult.

This entrenched way of doing business may start seriously hurting their bottom line if Tesla and others can scale the direct to consumer model.

Re: Carmakers feel chip crisis easing

#14

Post by jcampbell1 »

geoduck14 wrote: post #11
WXLCKNO wrote: post #6

Earlier quoted context omitted.

Really glad that dealers in Canada can't charge over MSRP for new vehicles.

I tried to buy a new car yesterday. The price was exactly MSRP, but there were plenty of ad-ons. That I couldn't remove "if I wanted to buy that car". In the end, there were about $11k in "extras" and they low balled me on my trade-in vehicle. I ended up walking away.

Know the 4 boxes where they make profit. Price, trade in, add ons, and financing. You just found out that a law that forces MSRP doesn’t do much except help politicians break their arm patting themselves on the back.

Re: Carmakers feel chip crisis easing

#16

Post by pacerwpg »

RyanShook wrote: post #2

I saw an article recently saying that dealerships and car makers want to keep inventories low because they like the post-covid margins they're experiencing. When I paid 5k over msrp a few months ago the salesperson claimed they wanted more inventory because salespeople were unable to hit the volume goals they have. Not sure who to believe but I'm sure the truth lies somewhere in between.

You can believe both. The salesperson and dealer don't necessarily have the same desires.

Re: Carmakers feel chip crisis easing

#17

Post by contingencies »

Kenji wrote: post #4

We don't notice any easing in the embedded devices industry. In fact, things are as bad as they ever were right now.

We design embedded too and I'm with you. My good friend and associate is one of the world's foremost aftermarket component traders. European, but based in Shenzhen. Same industry for 30 years. Clients include everyone who's anyone. When he stops telling me about record monthly profits after drinking, I'll believe it's over. Until then, no. FWIW, the beer-brag-barometer-index (BBBI) has been tracking solidly upward since 2019 with little exception.

Re: Carmakers feel chip crisis easing

#18

Post by syrrim »

jcampbell1 wrote: post #14
geoduck14 wrote: post #11

Earlier quoted context omitted.

I tried to buy a new car yesterday. The price was exactly MSRP, but there were plenty of ad-ons. That I couldn't remove "if I wanted to buy that car". In the end, there were about $11k in "extras" and they low balled me on my trade-in vehicle. I ended up walking away.

Know the 4 boxes where they make profit. Price, trade in, add ons, and financing. You just found out that a law that forces MSRP doesn’t do much except help politicians break their arm patting themselves on the back.

You could sell the car yourself, and get financing from a bank. Then its only price (fixed), and addons.

Re: Carmakers feel chip crisis easing

#19

Post by antoniuschan99 »

contingencies wrote: post #17
Kenji wrote: post #4

We don't notice any easing in the embedded devices industry. In fact, things are as bad as they ever were right now.

We design embedded too and I'm with you. My good friend and associate is one of the world's foremost aftermarket component traders. European, but based in Shenzhen. Same industry for 30 years. Clients include everyone who's anyone. When he stops telling me about record monthly profits after drinking, I'll believe it's over. Until then, no. FWIW, the beer-brag-barometer-index (BBBI) has been tracking solidly upward si…

I don’t know if it happened for sure but I’ve been waiting for this component for a few weeks and it finally showed up on Texas Instruments website with 300,000 in stock. A day later it was out of stock. I then checked out Octopart and findchips and looked at the 3rd party resellers and I’m guessing they might have gobbled it up as I’ve read in other threads (the 3rd party resellers on Octopart showed like 10-40k in stock for that component)

Re: Carmakers feel chip crisis easing

#20

Post by ericbarrett »

Kenji wrote: post #4

We don't notice any easing in the embedded devices industry. In fact, things are as bad as they ever were right now.

Not sure the size/volume of your endeavor but it's possible the car manufacturers are leading indicators, given their size—it was a rude shock to them post-COVID that they had lost their place in line, but they're still big enough to muscle back to the front.
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