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Discussion Starter · #1 ·

I think we've reach "Market Adjustment" peak, the down slide will start in July as a lot of new "In-Transit" cars will start to arrive on the top of increasing used inventory, lets just hope China doesn't pull a Putin with Taiwan.

What's TCL take on this?
 

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Increasing interest rates will increase payments, and inflation will inhibit consumer ability to continue to bid up prices. I agree that we will start seeing fewer dealer marker adjustments. But we may see more frequent MSRP price hikes. Manufacturers would rather those profits go to them rather than dealers.
 

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Are you asking if "Additional Dealer Markup" is going to be dropping because of this? A lot of the analysts are saying the recession won't fully develop to the point of depressing demand of out-of-stock goods until some time between fall this year and perhaps even as late as the end of next year.

Cars are tools. They are sometimes purchased for fun, sure, but they're a tool people need to have. A lot of the pent-up demand on top of supply chain disruptions is simply going to take a while to clear out. I guess it will depend on when the recession hits and how deep it cuts. If it's just stock markets, then no big deal. But if unemployment is up over 5% by the end of the year that's a whole different story.
 

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I think we've reach "Market Adjustment" peak, the down slide will start in July as a lot of new "In-Transit" cars will start to arrive on the top of increasing used inventory, lets just hope China doesn't pull a Putin with Taiwan.

What's TCL take on this?
Supply of cars haven't changed dramatically so you are basically saying demand will fall. That may be true for the middle of the market as most people probably will pause buying a new car in a recessionary environment. But probably doesn't affect the high end market this time due to the historical income and wealth inequality. People who buy G63 and Porsche GT cars are largely immune to recession now due to the way our economy works.
 

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At the end of the day, we are still missing two years of production. Not unlike Cash for Clunkers, which drove used priced for many years after.

Equity will only dry up on previously leased or purchased vehicles when production returns to "normal"

Collector car market is a different story. The smart money has already sold. You don't want to be in anything discretionary during a downturn(Blue chip cars aside)
 

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Supply of cars haven't changed dramatically so you are basically saying demand will fall. That may be true for the middle of the market as most people probably will pause buying a new car in a recessionary environment. But probably doesn't affect the high end market this time due to the historical income and wealth inequality. People who buy G63 and Porsche GT cars are largely immune to recession now due to the way our economy works.
I don’t think that’s really true. Luxury goods went way down for a period after the financial crisis. The billionaire set may immune, but the regular millionaires who stretch to get a GT3 over the regular 911 will feel a pinch, especially on top of their equities falling in value.
 

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Discussion Starter · #9 ·
Supply of cars haven't changed dramatically so you are basically saying demand will fall.
At the end of the day, we are still missing two years of production.
A lot of people WFH and most don't need or sold their 2nd car, naturally lowering demand. From what I hear, "a good amount of cars already produced and ready", but trucking companies and union strikes are the ones causing the delays. :unsure:
 

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Increasing interest rates will increase payments, and inflation will inhibit consumer ability to continue to bid up prices. I agree that we will start seeing fewer dealer marker adjustments. But we may see more frequent MSRP price hikes. Manufacturers would rather those profits go to them rather than dealers.
Bingo.
A lot of people WFH and most don't need or sold their 2nd car, naturally lowering demand. From what I hear, "a good amount of cars already produced and ready", but trucking companies and union strikes are the ones causing the delays. :unsure:
It is one of the many issues facing automakers these days. My friends Chevy store has 5 cars stuck in the port, for five weeks. Port is a 45 minute drive away, but union rules. Only they can move the cars.
 

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A lot of people WFH and most don't need or sold their 2nd car, naturally lowering demand. From what I hear, "a good amount of cars already produced and ready", but trucking companies and union strikes are the ones causing the delays. :unsure:
Neither of those is true. During the pandemic there was a brief period when cars stacked up in storage lots but those days are long, long since over. There are no manufacturer overflows anymore and dealer inventory levels are literally the lowest ever on record:


Anyone telling you some vague strike somewhere caused all of America to run out of cars from coast to coast for the last year is living in make-believe land.
 

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At the end of the day, we are still missing two years of production. Not unlike Cash for Clunkers, which drove used priced for many years after.

Equity will only dry up on previously leased or purchased vehicles when production returns to "normal"

Collector car market is a different story. The smart money has already sold. You don't want to be in anything discretionary during a downturn(Blue chip cars aside)
all valid points, particularly the first one. there was a whole period of limited fun cars used because the OEMs basically went a couple years without building them during the last recession.

discretionary is still relative. one thing that i think will make this situation a bit different is the growing gap between the haves and the have nots. Many people who work in certain fields won't feel a recession at all. they may see some trimmings down at their offices, but in terms of their personal wealth and pay, its not very impactful. flip that around and the bottom 80% are about to have a very bad time. inflation alone is chewing super hard into real wage gains and 10% of your income means a helluva lot more when you're making $54k vs. 154k.
 

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I don’t think that’s really true. Luxury goods went way down for a period after the financial crisis. The billionaire set may immune, but the regular millionaires who stretch to get a GT3 over the regular 911 will feel a pinch, especially on top of their equities falling in value.

So will a GT3 allocation cost only one kidney instead of two?
 

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Increasing interest rates will increase payments, and inflation will inhibit consumer ability to continue to bid up prices. I agree that we will start seeing fewer dealer marker adjustments. But we may see more frequent MSRP price hikes. Manufacturers would rather those profits go to them rather than dealers.
Agreed but MSRP price hikes were going to happen regardless of economic situation. Raw materials, components, shipping of all those items, etc. has skyrocketed. Although a different industry (telecom), my company did a ~14% price increase back in April and more is probably coming due to these factors. Quite honestly I'm amazed we haven't seen MSRP price hikes yet, guess manufacturers are just eating those costs...for now.
 

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I track sales pretty closely on BaT and Cars & Bids, especially on Porsches, and I've noticed a significant decrease already in prices within the last couple months. The height of the frenzy was between January-March this year. I expect an acceleration of this downward trend in the next few months. Same thing for stocks, housing, and some commodities.
 

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Discussion Starter · #18 ·
Dose anyone have car production numbers? Current inventory my not reflect the slow down, since a lot of cars have been reserved a while back and sold before they hit the ground. Do those cars even count as "inventory"?
 

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Dose anyone have car production numbers? Current inventory my not reflect the slow down, since a lot of cars have been reserved a while back and sold before they hit the ground. Do those cars even count as "inventory"?
Several automakers have switched to releasing figures quarterly instead of monthly, so with Q2 closing in half a month, we'll have official numbers from most everyone soon thereafter.
 

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I track sales pretty closely on BaT and Cars & Bids, especially on Porsches, and I've noticed a significant decrease already in prices within the last couple months. The height of the frenzy was between January-March this year. I expect an acceleration of this downward trend in the next few months. Same thing for stocks, housing, and some commodities.
Yeah I feel like the Jan-March period was, for many things, like a last mad rush before the doors closed and people were paying well over what they should have to get what they wanted.
 
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