Auto supply increasing

If you are interested in a new car, prices should be dropping a little soon. This is due to easing of supply chain woes, like the chip shortage. As new car prices ease, used car prices should as well IMO.

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I remember seeing a General Motors Chevrolet advertisement in a late 1945 Time magazine that my parents saved. There was a picture of a 1942 Chevrolet. The advertisement stated that the production lines for automobiles were being restarted, but in the meantime, motorists should continue to conserve their present automobiles. I think history may have repeated itself.

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Up until the pandemic caused havoc on the industry, the mantra was to produce as many cars as possible to meet demand. The old “make it up in volume” approach. Since then, manufacturers have enjoyed record profits selling lower volumes of product. I wonder of this spells the dawning of a new era in the industry where they work to maximize profits by limiting supply to some level that creates pent up demand and thereby higher prices/profits?


Driving by Auto-road in Salem NH…very few NEW cars in the lots. The Toyota dealer has an auxiliary spot where they use to store a lot of their new cars. That is completely empty. I think it’s going to take at several months to maybe even a year for things to turn around. I know several people who are still waiting to buy a new vehicle. But nothing to buy. I posted a few weeks ago about the Boston car show being cancelled due to lack of inventory. Pent up demand will take a while to go do down.

Why not, Rolex has been doing that successfully for years.


Rolex’s profits are based on a different model. The auto industry is based on volume selling. They could not sustain a business model like Rolex.

“We don’t anticipate automakers will rush back to producing more vehicles because they are actually making more money on lower sales volumes,” KBB analyst Michelle Krebs said. “Their costs are lower because they don’t have to spend money on incentives and they are making record profits.”

Their business model is exactly what @TwinTurbo was wondering about. Limit the supply and charge more. I was just citing an example of that.

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They may make more money NOW. But I seriously doubt they can sustain that model for a while. Demand will open the door for competitors to increase their volume or new competitors come to market.

Tesla stock is down to $100. It was $300. Is Tesla a buy now?

Many new vehicle deales have gotten used to charging 500.00 documentation fees and overpriced add-on gimmicks that it might be years for they stop doing that.

Dealers aren’t paying floor plan loans for large inventories, only 10 vehicles in stock but still selling 75 vehicles each month. More profit.

Document fees have been around for decades. In 1991 I was charged a $250 doc. fee, in 2000; $400. During the last 5 years some are charging as much as $1000.

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Wasn’t it luntz that said they are in the parts business not the car business? Nothing would surprise me.

Sure, if this is a theoretical investment with Monopoly money. If this is a real investment with actual money, no effin’ way! The stock has much further to fall.

In one year my 2017 Rav4 offer went from 27k to 21k, not that I am looking to sell, just pastime fun.

Those inflated offers were mainly fueled by pandemic-induced manufacturing shortages and “disruptor” companies such as Carvana and Vroom. Now that the shortages have abated, and Carvana is about to declare bankruptcy, prices have fallen significantly (as they should).

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National supply for each brand as of November, Local Buick dealer has 13 new SUV"s on the lot which is a little more than they’ve had in the past but not as huge a backlog as reported.

Driving by the dealership (Ford) I use, quite a few more vehicles on the lot. Only two cars, Ford only offers one car, the Mustang, the rest were SUVs and trucks.