Something to consider here, you can take lessons from the broader US market to see behind the scenes of cause/effect in the car market.
So let’s go ahead and look at Jerome Powell’s last few Fed speeches…
Ah even he admits the Federal Reserve can’t pinpoint the exact cause of inflation. He has consistently said there are multiple factors at play here. Confounding effects of Covid, supply chain, fiscal policy, and inflation. They are all tied together, nothing singular to blame besides “Covid.” The macroeconomics of the auto industry seems to point to AT LEAST a 1 year gap until things can return to normal but here we are with Covid 4.0 and I suspect that timeline is going to get bumped back a bit. Even if new car inventory is able to balance, there is still a HUGE population of people who cannot afford a new car and will still flock to the used car market; prolonging the price spike. I’m not sure how anyone in this thread can confidently say things will even be different 3 months from now. We’re in this for the long haul now
I can finally do msrp after months at 1500 over msrp. Only reason I’m getting that is bc some other dealers are doing the same. Competition is good. Walk ins still pay 3k over msrp approximately.
I’m hoping we get back to the point where dealers are competing at 8%+ under msrp but were a long way from there and the inventory to support it.
I don’t think it’s meant to make money or be something they’ll sell. It’s meant to compete with CarMax only in that it will add inventory to local dealers and move cars across a wider network.
Either way - I am ready to sell if they want to make some overpriced offers to get market share.
That’s why I expect it to be ‘sold’, they won’t hire the right people, sales will suck, it will be running at a loss and Carmax will buy. Carmax at the beginning was a big suck as well, but they stuck to their model and weeded out people who didn’t fit. I don’t see GM doing that.
There’s tax return season coming but it sounds like right about now is when auction values should be creeping up as dealers acquire inventory in advance. That doesn’t seem to be the case, which suggests that they feel like they have enough used inventory?
Cathy wood has done nothing special but ride a wave in tech. What she does during the next crash will define her career. Plenty of people have made the gains she has in the market the last 5 years…
And her statement on used autos is very obvious, prices can only go so high as salaries can’t support much more in that segment. Same with housing…
Interest rate hikes this year also should (at least in theory) slow down the demand as monthly payments will climb up potentially pricing people out of the market. So my crystal ball says, cheap cars (below $30k) will plateau in price/demand, anything over $30k (i.e want vs need) will gradually lose steam with each rate hike this year.
