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Carmakers feel chip crisis easing

bloomberg.com

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Re: Carmakers feel chip crisis easing

#181

Post by itsoktocry »

exitb wrote: post #84
lettergram wrote: post #64

Earlier quoted context omitted.

I have yet to pay MSRP for a new car. Twice, Ive gone in on Christmas Eve or New Years and make the guy wait around until he offers an employee discount. I’ve also gotten a discount (5% under MSRP) for being associated with a university which purchases in bulk from the given dealership. In one case I made the guy go into their system and show me I was buying it at cost to the dealership. People just don’t know how to…

As usual with this type of advice, it wouldn’t work that way if everyone approached dealerships like that.

>it wouldn’t work that way if everyone approached dealerships like that

Of course it would. Dealers have some flexibility in their margins. Just like you, they have a price below which they will not make a deal. If you offer too low a price they will simply say no.

This isn't rocket science; buyers and sellers come together at an acceptable price.

Re: Carmakers feel chip crisis easing

#182

Post by bitexploder »

ChrisRR wrote: post #151
KerrAvon wrote: post #86

Earlier quoted context omitted.

I applaud you for not taking the bait on the Model 3, which is overrated, but I cannot fathom purchasing an appliance car like a Camry. You can’t possibly enjoy driving it. Why not at least a Honda?

A car is an appliance. Why does it have to be fun? It's a moving chair that gets me from A to B

A very utilitarian view. People aren’t all beings of pure logic, though. Some people have fun in their cars and use them for purposes other than pure transportation.

Re: Carmakers feel chip crisis easing

#183

Post by itsoktocry »

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.

It's actually a bizarre, economically illiterate regulation. Why shouldn't dealers be able to charge whatever they want for vehicles? If they set the price too high, no one will buy the cars.

Re: Carmakers feel chip crisis easing

#185

Post by itsoktocry »

mattbrewsbytes wrote: post #146
etempleton wrote: post #13

Earlier quoted context omitted.

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.

Tesla only sells luxury cars, even the Model 3 is considered luxury ($48k). Supposedly Tesla was going to sell in the luxury segment then ramp up production for other market segments. When exactly is Tesla going to offer an economy car? With their margins they could make the Model 3 priced like that to win market share before other automobile companies catch up. I don't follow them or their product releases but haven…

>With their margins they could make the Model 3 priced like that to win market share before other automobile companies catch up.

You've answered your own question: their high gross margins have more to do with accounting differences with OEMS than actual finances. Making cars is expensive.

Re: Carmakers feel chip crisis easing

#186

Post by itsoktocry »

zachshefska wrote: post #179

The ripple effects from the chip shortage will be felt for years … nearly all new cars are already “spoken for” and consumers will still be paying MSRP & MSRP+ for 12-18 months. What happens to used car prices over the coming 2-3 years will be fascinating. So many people will be underwater on their car loans.

>So many people will be underwater on their car loans.

Can you clarify what you mean? A car is a rapidly depreciating asset; being underwater is the norm. It's only been during the pandemic that used vehicle prices have outstripped loan values.

Re: Carmakers feel chip crisis easing

#187

Post by bluGill »

Scoundreller wrote: post #78
sammalloy wrote: post #67

Earlier quoted context omitted.

> In future American OEMs may move to a more European model where vehicles are built to specific customer order This would be a great thing. NPR ran a show last week about the benefits of switching to this model for the consumer in terms of products of all kinds, and it turns out that given this choice, the customer makes better, more ethical and informed decisions about the product and feels better about the relatio…

> better, more ethical and informed decisions I think any move that goes in this direction will be deemed a non-starter by incumbent industry even if it could lead to the good stuff you mentioned later on.

Only for decisions people can make though. If the option I really need is only available bundled with a bunch of other high priced options my decision is more informed, but it didn't change.

OTOH, it isn't possible for a dealer to keep all possible combinations of options on the lot. Even the largest dealers don't have that much lot space for one model (much less all models). This is why there are so many bundles: you chose package A,B,C and then color. However if people are ordering they may give the nod to a manufacture that allows them to unbundle choices, and this competition may force them to make lots of different options and thus lose the profit margin on lots of options that maybe people didn't want but it came with an option they demanded.

Re: Carmakers feel chip crisis easing

#188

Post by pnutjam »

adhesive_wombat wrote: post #109
bfdm wrote: post #79

Earlier quoted context omitted.

But this doesn't make any sense, that's exactly the problem. If you wanted a particular configuration they should direct the plant to assemble that configuration just as soon as they've finished assembling any special configuration requests placed before yours.

Possibly they do configurations in phases, so the more unusual your request, the longer it will be before they're building a suitable batch. Maybe they only do adaptive cruise models on Wednesday and wood trim on the third week of the month. Now to get both you have to wait a month and because the ship leaves in 2 weeks, now you have to wait for the next one. Semiconductors are the same. Manufacturer lead times are,…

I've been looking for a van and I was told that Chevy full size vans are done in the same plant as an SUV. They do a 2 month cycle of vans, then a 4 month cycle of SUV. So if you order at the wrong time, it could be over 4 months to wait.

Re: Carmakers feel chip crisis easing

#189

Post by JumpCrisscross »

bluGill wrote: post #171
MisterTea wrote: post #154

Earlier quoted context omitted.

Most of the safety driver aids seem to paper over incompetency and the fact that people can't put their phones down while operating a deadly vehicle. Been driving for 20+ years and no accidents. I also mainly drive older vehicles without any such tech save for ABS. Stay focused on the task at hand and be responsible. If you cant do that, then surrender your drivers license and use an alternative transportation method…

> Been driving for 20+ years and no accidents That is luck not skill. Humans are not good drives and never can be. > Stay focused on the task at hand and be responsible. That helps. It would help some more if you would also get updated training - safety engineers have discovered a lot of things over the years that few people know.

> That is luck not skill. Humans are not good drives and never can be.

This is a stretch. The better argument is that the best human reflexes can't react to others' stupidity with the speed and precision modern safety mechanisms can.

Re: Carmakers feel chip crisis easing

#190

Post by JumpCrisscross »

itsoktocry wrote: post #169
BenoitEssiambre wrote: post #12

Earlier quoted context omitted.

>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.

> an inventory was almost a good investment with relatively good returns This is a great point. Any dealer who had surplus inventory heading into summer 2020 did really well on their margins I bet. Of course, not something you want to base your business around...

> not something you want to base your business around

If you think of dealerships as dealers, i.e. market makers, it's precisely their business.

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