Roughly 1.2-1.3 for all my podcasts
Marketplace/Planet Money/Bloomberg/GS/ML/Economist podcasts all do fine unpacking the data and their analysis in the timebox at that speed.
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No, you should not assume that. Demand is one of many factors ( probably biggest one though) impacting an automaker’s decision to offer incentives. One automaker may very well increase incentives to capture market share from competitiors in the expense of its own margins for example. Why? Even idle factories incur fixed costs that needs to be paid from sales. Or it can simply be a business strategy for those with a strong balance sheet. We - consumers- don’t have any visibility to that , thats why you can’t time your purchases in unpredictable times like now.
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Given recent strength of used auto market, would that increase future RV on leases or just got in line with previously seems to be inflated RVs?
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Loaners will be discounted lower now, I’d think, since they are mostly sold (not leased) as used.
I suspect everything will be looked at and adjusted start in second half of this year. I think MRM is certainly one of many variables that will be re-examined. Curious what @RVguy thinks about reforesting and adjustments?
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The wholesale values on a lot of models is back to pre-covid prices or higher. That group would be mainstream trucks and utilities. I don’t really pay attention to luxury or mainstream sedans.
The only real thing that will affect future wholesale values due to covid is the massive drop in used supply. I looked at inventories on the ground each day across the country and how that compares to the prior year. Right now we are running at about 50% of new car inventory compared to last June.
Demand is very strong right now so the remaining stock is running at a very low days supply. 20-35 days is the normal range for most models. Some are in single digits. I’ve heard that one big group of oems is selling 28 units for every 1 that they can produce right now. The factories really won’t get back to full capacity with truck loads delivered to dealers until late July in most cases and then it will be months to deliver enough cars to catch up with the demand so that the inventory is flat year-over-year.
So the number of lease originations from March-November will be the key factor affecting where wholesale values are in 3 years from now. Most RV forecasting teams aren’t sophisticated enough to model used supply at the model level and put together a strategic RV increase knowing that they aren’t increasing he risk.
I’d expect most to stay fairly conservative and punt with a normal declining RV through the rest of the year. Until supply normalizes I’d expect less than stellar dealer discounting and incentives should stay near current levels for the most part. I think the retail 0% for 60/72/84 deals are going to go away so the incentives on leasing will again be the better deal. A lot of dealers through covid shifted their f&i push to those retail deals instead of leasing because they were running with barebones staff and often times the gm/gsm were the ones doing everything start to finish.
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A recession typically leads to a buyer’s market. We’ll see if we have a ‘V’ curve comeback, or we have to deal with long term high unemployment.
What’s different is now we have to deal with supply chain issues and balance that against economic slowdowns on demand. If anyone tells you he knows for certain what’s going to happen I would plug your ears and run away.
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Wholesale used vehicle prices (on a mix-, mileage-, and seasonally adjusted basis) increased 6.6% in the first 15 days of June compared to the month of May. This brought the mid-month Manheim Used Vehicle Value Index to 146.1, a 4.0% increase from June 2019. If the mid-month value of the Manheim Index holds for the full month, the Index will hit an all-time high.
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Are there any obvious equities plays here? Buying any of the American manufacturers seems a bit sketchy, but perhaps looking towards transportation companies or other messenger services that are public?
Yep. I have been looking at some different economic projections at work and there are way too many variables to make any firm assumptions. From a car centric perspective, no one knows if/when congress will pass additional stimulus/unemployment payments and whether additional auto parts factory/supply chain slowdowns will occur either at home or abroad.
We do know there is a coming public finance crisis that will require laying off hundreds of thousands of state and local workers, a federal bailout or a big tax increase. Of course the million dollar question is the vaccine and that just introduces more uncertainty.
This makes sense. Demand is still fairly high and there is a shortage of new cars combined with short to medium term uncertainty about production capacity.
For anyone closer to the market, is this an opportune time to unload older vehicles also, or is this a late-model phenomenon? I would expect the auction volume to be skewed toward newer.
My dad has two Corvettes he doesn’t drive (he’s thinking of selling his red 2002 Coupe with 21,000 miles), and I wouldn’t mind replacing my 2011 G37 convertible. It’s otherwise hard to justify the latter, given that it costs almost nothing to own.
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BaT is probably his best option.
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It is interesting to hear from everyone that inventory is getting low and then keep receiving emails with some large discounts offered.
Like this
I’ve other emails similar to this from Volvo offering around 30% off but didn’t save it.
I expected not to see anything like this in the email at all
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I guess no one wants to buy an escalade, especially with the new model right around the corner.
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You need to look at the fine print. $10k of that discount is probably loyalty. Plus, the 2021 is brand new, so they gotta get rid of these older 2020s.
The best is when those advertised discounts include both loyalty and conquest, even though they’re not stackable.
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Yes, not just loyalty but some private offer. Still, with tightening inventory as many reporting, you would not nessesary see dealerships passing along all available discounts.
Here is the fine print
Offer only valid on 2020 Escalade ESV 2WD stock# 20060 with MSRP of $79,760. Must have Cadillac Targeted Private offer of $10,000 to qualify. Plus tax, registration, and dealer convenience fee of $699. Based on stock #20347 with an MSRP of $34,365. Cadillac Select Market Incremental CCR Program of $1,500 already applied. Cannot combine with any other offers or rebates. Offer ends 06/30/2020. **Offer only valid on new 2020 Cadillac XT4, XT5 and XT6 models. With approved credit through GM Financial. Not all will qualify. Plus tax, registration, and dealer convenience fee of $699. Offer not valid on a lease or with other offers. If applicable, finance charges accrue from date of finance. Some residency restrictions apply. See Cadillac of Greenwich for more details. Must take delivery by 06/30/2020.
Funny how they refer to two different stock #s in the same ad 
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Either they are wrong or demand is way lower…probably a little of both.
Based on broker quotes and shared deals, it seems more incentives now compared to pre-covid.