Auto industry glut of new vehicles

[Paul19876]

Auto Inventory Glut Sends Shockwaves Across the Industry

The imbalance between demand and supply of vehicles is not likely to disappear anytime soon.

www.yahoo.com

I'm not sure how this will impact the 200 Series, probably more so with the Lexus 570 and less with the Land Cruiser.

 

[kcruiser200]

Auto Inventory Glut Sends Shockwaves Across the Industry

The imbalance between demand and supply of vehicles is not likely to disappear anytime soon.

www.yahoo.com

I'm not sure how this will impact the 200 Series, probably more so with the Lexus 570 and less with the Land Cruiser.

its pretty interesting what's going on. I am by no means an auto-market expert, but, in the past people with money who wanted to buy a vehicle have gone ahead and done it. that population always is more insulated from economic impact than the average middle class consumer. porsche, high end benzes and beemers still sold well in and around the 2008 and later down turn. seeing as the LX570 and LC play in this field somewhat, sales for these should hold steady. I believe the real glut is in common cars that people tend to lease..... but I maybe totally wrong!!! we have a few dealers on here ... maybe they can chime in with their thoughts / experiences.

 

[mcgaskins]

its pretty interesting what's going on. I am by no means an auto-market expert, but, in the past people with money who wanted to buy a vehicle have gone ahead and done it. that population always is more insulated from economic impact than the average middle class consumer. porsche, high end benzes and beemers still sold well in and around the 2008 and later down turn.

That is not true depending on how you define they sold well. BMW and Porsche each saw YoY average sales volumes declines of 15-29% from 2008-2009 whereas Toyota saw an average decline of around 16% in the same period (keep in mind Toyota sold 6-7x the number of vehicles BMW and Porsche sold combined during the same time). It is often repeated but incorrect as a blanket statement that wealthy people continue on consuming as normal in downturns. They may be better positioned to take advantage of great deals which erodes the profit margins of manufacturers, but wealthy people are typically the savviest consumers and will of course also pull back during recessions. There is also the taboo of conspicuous consumption angle which usually affects luxury goods far more than mainstream brands - if you need a car during a recession, you're not going to get much flack for buying a new Prius, but you could draw negative attention if you buy a GT2RS Weissach.

EDIT: Added a graph with sources - note this is US sales only.

 

[Battleship]

what is your source?

You can't bust someone's chops for not citing sources and then spew a bunch of numbers without citing sources....unless you are the president.

 

[mcgaskins]

You can't bust someone's chops for not citing sources and then spew a bunch of numbers without citing sources....unless you are the president.

Excellent point - I'm actually not the president, I just play one on tv. I downloaded a bunch of data earlier and put into a table to get to those figures but failed to include in my post. Apologies my good sir, the post has been updated with my data.

 

[kcruiser200]

That is not true depending on how you define they sold well. BMW and Porsche each saw YoY average sales volumes declines of 15-29% from 2008-2009 whereas Toyota saw an average decline of around 16% in the same period (keep in mind Toyota sold 6-7x the number of vehicles BMW and Porsche sold combined during the same time). It is often repeated but incorrect as a blanket statement that wealthy people continue on consuming as normal in downturns. They may be better positioned to take advantage of great deals which erodes the profit margins of manufacturers, but wealthy people are typically the savviest consumers and will of course also pull back during recessions. There is also the taboo of conspicuous consumption angle which usually affects luxury goods far more than mainstream brands - if you need a car during a recession, you're not going to get much flack for buying a new Prius, but you could draw negative attention if you buy a GT2RS Weissach.

EDIT: Added a graph with sources - note this is US sales only.

that's good info. I guess I stand corrected somewhat. I wonder what the split is between high end models versus low end models within the same manufacturer. Would be nice to know let's say a comparison between M3/M6 sales versus 328/528 sales or GT3/911 turbo sales versus boxster/base 911 sales during those periods. but that would be completely academic / nitpicking.

now a GT2RS weissach!!! hmmmm!!! - I can only dream!!! If I was rolling in that kind of money, I'd get it!! they dont make those forever...

but completely understand the point about conspicuous consumption though. Always better to fly under the radar anyways, regardless of bull or bear market!! no point in attracting the wrong attention!! flashy / taunting plates included.

 

[LBridges]

.... Always better to fly under the radar anyways, regardless of bull or bear market!! no point in attracting the wrong attention!! flashy / taunting plates included.

Made me wonder, do vehicles with S&W, SIG, Ruger, etc stickers get broken into more, or less, frequently than typical?

 

[FooFighterDDS]

that's good info. I guess I stand corrected somewhat. I wonder what the split is between high end models versus low end models within the same manufacturer. Would be nice to know let's say a comparison between M3/M6 sales versus 328/528 sales or GT3/911 turbo sales versus boxster/base 911 sales during those periods. but that would be completely academic / nitpicking.

now a GT2RS weissach!!! hmmmm!!! - I can only dream!!! If I was rolling in that kind of money, I'd get it!! they dont make those forever...

but completely understand the point about conspicuous consumption though. Always better to fly under the radar anyways, regardless of bull or bear market!! no point in attracting the wrong attention!! flashy / taunting plates included.

I bought a GT3 in 2008. They were in high demand and going above MSRP especially GT3RS's. They were ultra-rare and hard to find nationwide. If you got one at MSRP you considered yourself lucky. I think 108 GT3's made it to the US in 2008. By 2010 it was the opposite. I got a 2011 GT3RS for well under MSRP. They were sitting on lots for months.

I'm not sure how much the economy affected demand on high price/rare cars. It might have had a delayed reaction. I tend to think that changes in the engine and manual transmission had a bigger affect.

 

[FrazzledHunter]

Made me wonder, do vehicles with S&W, SIG, Ruger, etc stickers get broken into more, or less, frequently than typical?

I have always assumed having stickers would be a thief magnet. I also think that political stickers invite vandalism.
Here's a bit f hard evidence I might be right about the stickers and guns:
Sheriff Warns Pickups With Hunter Stickers Being Targeted by Gun Thieves - The Truth About Guns

 

[kcruiser200]

Made me wonder, do vehicles with S&W, SIG, Ruger, etc stickers get broken into more, or less, frequently than typical?

those "get" the correct type of attention!! as opposed to a license plate that says "just try"!! on a flashy sports car.... not making it up!! actually saw one!!!

 

[1world1love]

That is not true depending on how you define they sold well. BMW and Porsche each saw YoY average sales volumes declines of 15-29% from 2008-2009 whereas Toyota saw an average decline of around 16% in the same period (keep in mind Toyota sold 6-7x the number of vehicles BMW and Porsche sold combined during the same time). It is often repeated but incorrect as a blanket statement that wealthy people continue on consuming as normal in downturns. They may be better positioned to take advantage of great deals which erodes the profit margins of manufacturers, but wealthy people are typically the savviest consumers and will of course also pull back during recessions. There is also the taboo of conspicuous consumption angle which usually affects luxury goods far more than mainstream brands - if you need a car during a recession, you're not going to get much flack for buying a new Prius, but you could draw negative attention if you buy a GT2RS Weissach.

EDIT: Added a graph with sources - note this is US sales only.

I actually have a theory about this, based on no data in particular, but rather from observation.

I think that while you are correct that wealthy people do cut back on spending during downturns, I actually think that it generally holds true that luxury goods are mostly immune to most economic downturns. I think that what drives the data you presented is that in the last two decades, the average buyer of luxury items has changed to a lower income bracket than in prior decades.

Put another way, I suspect that while a Porsche or BMW were the playthings of the rich and famous in the old days, now we have a society that encourages people who cannot really afford these types of things to buy them anyways. We have banks that will finance a Beemer for 10 years just to help the dealers sell them. So my theory is that the YOY drop off is not actually reflecting the buying choices of the wealthy, but rather a reflection of the general financially over-extended nature of our society in good times.

If you could plot sales with buyer income YOY, I'd say you would see this play out, but I cannot find any source for those sorts of numbers.

 

[kcruiser200]

I actually have a theory about this, based on no data in particular, but rather from observation.

I think that while you are correct that wealthy people do cut back on spending during downturns, I actually think that it generally holds true that luxury goods are mostly immune to most economic downturns. I think that what drives the data. you presented is that in the last two decades, the average buyer of luxury items has changed to a lower income bracket than in prior decades.

Put another way, I suspect that while a Porsche or BMW were the playthings of the rich and famous in the old days, now we have a society that encourages people who cannot really afford these types of things to buy them anyways. We have banks that will finance a Beemer for 10 years just to help the dealers sell them. So my theory is that the YOY drop off is not actually reflecting the buying choices of the wealthy, but rather a reflection of the general financially over-extended nature of our society in good times.

If you could plot sales with buyer income YOY, I'd say you would see this play out, but I cannot find any source for those sorts of numbers.

excellent thoughts!!! couldn't have said it better.

 

[eatSleepWoof]

I actually have a theory about this, based on no data in particular, but rather from observation.

I think that while you are correct that wealthy people do cut back on spending during downturns, I actually think that it generally holds true that luxury goods are mostly immune to most economic downturns. I think that what drives the data. you presented is that in the last two decades, the average buyer of luxury items has changed to a lower income bracket than in prior decades.

Put another way, I suspect that while a Porsche or BMW were the playthings of the rich and famous in the old days, now we have a society that encourages people who cannot really afford these types of things to buy them anyways. We have banks that will finance a Beemer for 10 years just to help the dealers sell them. So my theory is that the YOY drop off is not actually reflecting the buying choices of the wealthy, but rather a reflection of the general financially over-extended nature of our society in good times.

If you could plot sales with buyer income YOY, I'd say you would see this play out, but I cannot find any source for those sorts of numbers.

Spot on!

 

[slowride]

Just an FYI...

New car purchase???

Probably not going to be at the top of the list of things to do for a while...

Cash for Clunkers II... ( No Payments for 48 months and $15,000.00 off ??? )

0% APR does not mean a thing for those consumers that do not have a job or a positive view for their chance at future economic growth & stability !!!

This is HUGE wave of trouble coming...

( End )

 

[M1911]

Made me wonder, do vehicles with S&W, SIG, Ruger, etc stickers get broken into more, or less, frequently than typical?

My assumption would be more.

As a gun owner, I don‘t put such stickers on my vehicles. I don’t wear gun logo clothing. I don’t carry openly. I prefer to not be noticed.

The only stickers on my 200 are oversand vehicle permits.

 

[LCMemphis]

The auto auctions have been closed for months and lease expirations on luxury vehicles will put a glut of inventory on the market when things open up. That coupled with decreased demand and consumer uncertainty will really impact prices. I think it's a matter of time but consumers will have a lot of options at greatly reduced prices in the coming months. Just my $.02.

 

[eatSleepWoof]

Made me wonder, do vehicles with S&W, SIG, Ruger, etc stickers get broken into more, or less, frequently than typical?

More. Studied and proven at some point in the last few years. A US state's police department even warned that vehicles with such identifying decals were being targeted due to higher chance of having firearms on board. Can't recall in which state/where this was happening, but I 100% read the news reports about it when it was occurring.

 

[rusty87]

People were breaking into cop cars to search for guns, so yeah stickers increasing your chance of a break in is believable.