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.
Too many CEOs worried about being Woke.
I was getting an oil change at the Toyota Dealership today. Normally, they have at least one of each model in the showroom, but today they had mostly Toyota Tundras, one Corolla and one crossover. No Camry, No RAV 4 no Sienna, certainly no Avalon (Toyota never gives the Avalon any love).
Who needs a car when you are sitting home getting welfare.
Took my Genesis in for service the other day, and the “used car area” at the dealer was EMPTY. E M P T Y. Not a single car on it. I rapped with the salesmen who were just sitting around (as there are very few cars to sale, and chatting with me helped them pass the time), and they pointed at what they had “We got 1 of these, but I think it’s already sold. We got one Santa Fe, it’s sold, just waiting for the guy to come get it. We have one Santa Cruz that’s not spoken for! You wanna see it?” We walked over and looked at it. We walked back, a few minutes later it’s driven up front. Someone had just made a deal for it over the internet, they would be over to get it in an hour.
For the record, ALL of their new cars had “Dealer adjustment” markups on them. On these Hyundai cars/trucks, it was $4995.
So, this being the story, I’m not surprised that sales have started to tank. #1, you can’t FIND what you want. You have to settle. #2, if you DO find it, the pricing is outrageous, and you’d better buy it RIGHT NOW. (smh)
“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”
This doesn’t surprise me at all. I was once a GM customer, who grew up in a family of GM customers. Chevys, Buicks. Even an occasional Oldsmobile or Saturn. Once upon a time, they were a full-spectrum automaker which cars and trucks for every taste and budget. Gradually, though, GM evolved into a rather pricy truck and SUV outfit... which is fine is that’s what is profitable for them. But when you abandon a sizable chunk of your customer base, it follows that your unit volume is going to tank.
And, of course, I know that they still have vehicles that are outside the truck/SUV spectrum, e.g., the Corvette and a handful of Cadillac sedans, but those are outliers.
“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”
This doesn’t surprise me at all. I was once a GM customer, who grew up in a family of GM customers. Chevys, Buicks. Even an occasional Oldsmobile or Saturn. Once upon a time, they were a full-spectrum automaker which cars and trucks for every taste and budget. Gradually, though, GM evolved into a rather pricy truck and SUV outfit... which is fine is that’s what is profitable for them. But when you abandon a sizable chunk of your customer base, it follows that your unit volume is going to tank.
And, of course, I know that they still have vehicles that are outside the truck/SUV spectrum, e.g., the Corvette and a handful of Cadillac sedans, but those are outliers.
I enjoy Doordashing to supplement my retirement income. My 2011 Prius has 300,000 miles on it so I went used car shopping for a relatively decent used hybrid. Uh...no. $16,000 average price for a ten year old or older car. A year or so ago these same cars would have been about $4,500 dollars.
What about the phrase "beer run?"
Also, I believe it's line 14,979 of the new spending bill that says all here illegally ("undocumented residents") shall be awarded one new vehicle of value not less than $20,000 for purposes of transportation to and from their Section 8 paid house or apartment.
Kidding. I think!
Bought a new Genesis in August. It was like nothing else. Dealers are in complete control. You want it. Full sticker and they add on about 2k in after market garbage. Don’t want it? Sucks to be you. Next.
Threats about the future of gasoline-powered cars might also be making people hesitant to buy. On the other hand, it might make them eager to buy while they still can.
gezz, they destroyed probably a million jobs with this Wuhan cockn’bull Commie charade and now they wonder why new cars are not selling.
My Toyota dealer is pushing used trucks.
I’m buying my next car in Mexico
The large local dealer has a huge back lot area which can hold hundreds of new and used cars—pre Covid it was packed to the gills.
Today—zero—nothing—not new, not used, nothing.
Never seen anything like it—the size of a football field.
I’m surprised to see this report and these various posts about very high prices on new cars. The dealership where I bought my company truck two years ago sends me a mailer every month where they offer to sell me a 2021 model for the same price as the old one. The only stipulation is that the old one has to be included in the deal as a trade-in.
I suspect what’s happening is that they’re looking to get these deals signed and deposits paid on remaining 2021 inventory that are sitting in a lot outside a plant somewhere and won’t have the final assembly done for another 6+ months due to the chip shortage.
Do you mean $4995 ABOVE the MSRP?
I have given up on buying a new truck. My current vehicle only has 30K miles on it. My daily only has 56K and my other Jeep 180K. I am good to go for another 10 years without replacing one.
I am 100% remote, so I do not drive much anymore.
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