Posted on 10/05/2021 4:03:38 PM PDT by blam
Total new vehicle sales in September dropped to 1.01 million vehicles, down 37% from 1.6 million vehicles in March, when there were still enough new vehicles to sell.
The industry-standard Seasonally Adjusted Annual Rate (SAAR) of sales – which adjusts for the number of selling days per month and for seasonal factors, and converts the monthly sales into what sales would be for an entire year – plunged for the fifth month in a row, by 29% year-over-year, to 12.2 million units SAAR, the lowest, outside of the two lockdown months, since June 2011 ,according to data from the Bureau of Economic Analysis.
During the Great Recession, it was a collapse in demand as consumers went on a buyers’ strike and decided to drive their vehicles for a couple more years instead of trading it in; and they kept doing it for years. Two of the Big Three US automakers filed for bankruptcy protection, along with many component makers.
This time, the situation is so screwed up that it is hard to figure out what demand actually is. We only know that it exceeds supply. But supply has been thrown into total chaos by the semiconductor shortage that has triggered plant shutdowns globally.
Over the past few months, inventories of new vehicles have collapsed. People were ordering and waiting patiently until the vehicle gets in. Others grabbed what was still available when it came in. And prices have spiked as automakers have cut back on incentives, and dealers are selling over sticker, and automakers are prioritizing higher-end models, which is where the money is.
There are indications that many potential buyers have had enough of this circus and stopped looking.
They went on a buyer strike. But their numbers remain uncertain, and for now demand still exceeds supply.
Ford is suddenly No. 1 for September as sales plunged, that’s how bad it is. Ford reported today that total sales in the US in September plunged by 18% year-over-year to 156,614 units. Of them, 83,554 were pickup trucks and 70,260 were SUVs. It only sold 2,800 cars in September, having handed car production to Asian and European automakers, with the Mustangs and a handful of GTs being the only cars it still builds. It killed the rest of the car models.
But, but, but… despite the 18% plunge in vehicle sales in September, Ford beat Toyota (152,916 vehicles) and claims it beat GM in monthly sales as well (GM only released quarterly sales for September). And thereby Ford claims to have been the “No. 1 seller of vehicles in the U.S. for the month.”
Ford credits some recovery from its production problems, as retail sales in September were up 34% from the collapsed levels in August.
The inventory shortage and the sales for the month produce the fastest inventory turn Ford had “ever seen,” it said, with 31% of its retail sales coming from delivering vehicles to customers had ordered them previously – up from 6% last year.
But Toyota, which in September finally also took a hit from the semiconductor shortage and ran short on inventory, after having been able to get through it better than the others, reported that sales in September plunged 22% year-over-year to 152,916 vehicles, with Lexus Division down 8.3% and Toyota Division down 24.5% year-over-year.
General Motors reported that sales in the third quarter plunged by 33% year-over-year, and by 39% from two years ago, to 446,997 vehicles. That’s a monthly average of 149,000 vehicles.
Dealer inventory, including in-transit units, was only 128,757 vehicles. This would amount to roughly 26 days of supply. Considering the time vehicles spent in transit (depending on dealer location and where the vehicle is coming from), and the time it takes to prep vehicles at the dealer when they come off the car carrier, the average number of days’ supply is minuscule. But GM said that availability is “projected to improve during the fourth quarter.”
GM is holding on storage lots near its assembly plants a large number of unfinished vehicles that are missing a component or two related to the semiconductor shortage. When the components arrive at the plant, GM finishes the vehicles and ships them to dealers. In Q3, GM shipped over 68,000 of these vehicles to dealers.
And it prioritized higher-end vehicles and high prices, and cut its incentive spending: GM’s average transaction price (ATP) was $47,467 during the third quarter, up by 20% from $39,389 in Q3 last year – a sign that there is significant demand at those ridiculous price levels, given the inventory shortage.
Stellantis-owned FCA reported that Q3 sales plunged by 19% year-over-year to 410,918 vehicles. Sales by brands:
◾Jeep: -11% to 196,687 vehicles
◾RAM: -17% to 144,740 vehicles
◾Chrysler: -51% to 15,502 (its sedan models have been killed)
◾Dodge: -32% to 49,059
◾And forget Fiat and Alfa Romeo
Tesla doesn’t disclose US deliveries; it only discloses global deliveries on a quarterly basis. It currently builds vehicles in the US and China. Vehicles from both plants are also exported to other countries. On a global basis, it delivered 241,000 vehicles, up 73% from a year ago. In the press release, it thanked its customers “for their patience as we work through global supply chain and logistics challenges.”
There is more supply coming, automakers are saying. The chip shortage isn’t going away just yet, but they’ll be able to make more vehicles, and they’re dangling the hope out there that inventories will improve. When production starts perking up, and inventories start building – for inventories to build, production would have to exceed demand – it should become clearer what actual demand is at these price levels.
Soviet America. Like the good old days in the Soviet Union. Get on a waiting list for a car, and when you get to the top of the list, you take whatever is available.
Come to think of it, maybe I should look into importing some Ladas. Nope, won’t work. Those are Renaults now. Maybe GAZ.
That’s nothing. New Kia Tellurides in my area are going for $5,000-$10,000 over MSRP... and still, they can hardly get them in fast enough.
But not for Tesla...
https://www.theverge.com/2021/10/2/22704830/tesla-sold-241300-cars-third-quarter
Best if you can wait. The closest I could get the vehicle I wanted was over 200 miles away. And, few hours before I made the trek with my car trailer the dealer sprung it on me that, “Oh by the way, the car has 550 miles on it because we had to use it as a loaner”. Boy was I hot. Really sketchy business practice, but like I said, they don’t care. People lined up to buy. So yeah, definitely wait if you can.
I was just in an accident. Stopped on the highway, and rear-ended by a F250 doing about 55-60 mph. Probably texting. My Infiniti took it like a champ though in that I was able to drive it off, and no one in my vehicle was seriously hurt. The problem though is finding a new vehicle, or waiting for the new Infiniti QX60 to arrive which I already put a deposit on.
Thankfully not in the market. After I gave up on German cars a few years back, I actually have some that have required nothing other than oil/filters/tires for quite a few years of their lives. I will try an electric in a couple of years for at least one of my vehicles. Hopefully, things will be sorted out by then. Of course, if libs totally take over, foggetabout anything associated with advancing any state of the art.
And the used car prices are climbing. I saw a 2005 Ford somethingorother sedan for $7900 with 144K on the clock; this on a dealers website. Check your local deals to see.
We hired a guy to do some landscaping and he was telling us about wanting to purchase a Ford F350. He said he had a salesman buddy tell him to wait a while because they have all these vehicles sitting in lots waiting for chips and rodents are getting up into the engines eating the wiring.
I went to large Chevy dealer yesterday. They had practically no new vehicles for sale. Just few Silverados.
They are filling up huge parking spaces with cars waiting for the chips.
The dealer takes orders for the delivery of MY 2021 vehicles, whenever they will appear. They do not even have MY2022.
BTW GM also practically canceled all cars. Buick is SUV only, Chevy has only one sedan - Malibu. Some e-vehicles, Corvette and Camaro. None of them in the show room. None of the SUV’s either.
That’s me. Looking for a used car and for the make/model I was considering there’s too little selection and prices are too high (for me). Could get a great price on the current car I have (pay off the loan and pocket some money) but in the end punted. Just completed a refi for my current car, as rates are very, very good right now.
I’ll wait for the rodent modified truck.
With the arrival of Socialism, Companies have to switch their operating modes from sales to purchasing.
Like in the old Soviet Union.
There were no need for salesmen, they sold pretty much everything they managed to make on the spot.
So the manufacturing entities directed their smartest, brightest, and most aggressive workers to purchasing.
The buyers were the most important functions in the company! Without very smart and aggressive buyers, who could talk, cajole, and bribe suppliers to give them something, the company was sitting, high and dry, nothing could be done.
If we acknowledge the arrival of Socialism, to be successful in the new environment, the companies must redirect their efforts from sales to purchasing or perish!
My son works for a large dealership in Denver. He said they would give me $5,000 OVER MSRP for my 2 year old Toyota Tundra. They have almost no new cars and are paying ridiculous money for good used ones so they have something to sell.
My youngest son’s Ford dealership has had its biggest year ever selling Ford trucks...
are they even able to crank them periodically?
Just purchased a new to me 1966 Fairlane GT. 86K miles. Beautiful condition. My first car was a 1966 Fairlane GT. And my las one is too.
Yup, we’ve been looking long & hard too. Jumped on real fast when we did find the fluke of an excellent Chevy Suburban traded in at a Hyundai dealership. Very little otherwise that didn’t disappear fast.
YES
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