Surprising Nonchalance

[Polo08816]

This will change, and really fast...probably in like 5-6 months.
Then, the dealers who really took care of their customers will continue to have them, and those that lined their pockets w/ markups, etc will suffer...
My dealer was super cool through this whole process, didn't gouge me, and gets my service business.
They even did a follow up call after the sale, after each service visit, and still give me free drinks, coffee, etc while I wait.
But, they are in it for the long haul.

I don’t think so… they will throttle back the build rate to keep demand where they want it. Dealers have all admitted they have made way more money with less work with less vehicles on the lot. GM can throttle back overtime and save themselves some money in the process. There is a New World order in car buying, especially for desirable vehicles, and it isn’t going to be pick one from the 25 we have in stock anymore.

GM doesn't make decisions to throttle back production in a vacuum. You always have to factor in how your competitors will respond and how that will affect your business 5-10 years from now. Are you going to sacrifice long term market share for short term profits?

Half ton body on frame SUVs from different manufacturers are largely interchangeable - and there are more makes to choose from now more than ever. Are some more desirable than others? Sure. But they are still going to be price shopped against others. We are talking about a mainstream SUV here - not an exotic supercar.

In 6-12 months time (as the economy deteriorates and demand dries up), we're going to be back closer to the way we used to buy cars pre-pandemic than how we bought cars during the pandemic. Just look at the 40+ F150s Granger Ford has in inventory and the 40+ GMC Sierra 1500 pickups Robideaux Motors has in inventory. Full size SUV inventory will catch up.

 

[Stbentoak]

I agree w/ that, to a point...but when the demand gets more in line w/ supply, at least it won't be 40 week lead time anymore, will be more back to the 10-12 like it was before.

Yes, agree on the 12 wk Leadtime becoming more "Normal" ( I don't even really know what normal is anymore....) But the lots won't be "Full of them" and if you want one they have... there won't be any quibbling. It will be at MSRP or it will sit for the next guy to show up. They will go to more of the "let us order you what you want...." Model.

 

[TexasLC]

Just in case some weren’t aware…buying a car at invoice isn’t really invoice anymore. Nor has it been for some time. The manufacturer creates an invoice $ value for the dealer to work off of & show to buyers, but the dealer gets paid from the manufacturer $X amount per unit they sale. And when they hit certain sales goals they get more.

I say this to just shed light, but it now feels like MSRP has and will become the new norm for “invoice”.

There is zero reason any manufacturer will go back to big inventory when they’re training us to wait and compromise more on selection and that this creating bigger margins for them.

A version of nonchalance will remain for some time. Inflation or supply chain issues or not.

 

[Polo08816]

Just in case some weren’t aware…buying a car at invoice isn’t really invoice anymore. Nor has it been for some time. The manufacturer creates an invoice $ value for the dealer to work off of & show to buyers, but the dealer gets paid from the manufacturer $X amount per unit they sale. And when they hit certain sales goals they get more.

I say this to just shed light, but it now feels like MSRP has and will become the new norm for “invoice”.

There is zero reason any manufacturer will go back to big inventory when they’re training us to wait and compromise more on selection and that this creating bigger margins for them.

A version of nonchalance will remain for some time. Inflation or supply chain issues or not.

That's why dealers like Granger Ford do 3% under invoice pricing - most of their orders are getting built by Ford within 4 weeks. Like you said, invoice isn't really invoice.

The question is really where in the supply chain or production process will you keep inventory. Just in time manufacturing has significant weaknesses as we've seen during the pandemic. We're experiencing de-globalization. The margins are starting to decrease and that's where things are headed.

The question each manufacturer needs to answer is how willing are they to maintain short term profit margins over long term market share losses to their competitors. The mainstream automotive market is, without a doubt, competitive.