Reply to Do you think there will eventually be a glut of cars, and if so, when?

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Reply to "Do you think there will eventually be a glut of cars, and if so, when?"

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]No.  Manufacturers will attempt to balance supply and demand, not try to produce more supply than there is demand, which is what your questions says you're hoping for.  Manufacturers don't always get it right, under and over-estimating demand for some vehicles, and that's where your opportunity is today and tomorrow.  Negotiate for less popular (i.e., less in-demand) vehicles, not the current fads-du jour which everyone is clamoring for.    [/quote]

I mean, there were a glut of cars for decades. How can you be so sure it’s “never again”? I’ve never paid MSRP or anything close, and I’ve bought many many new cars. [/quote]

Never again because things are more profitable to dealers and manufacturers. Carmakers have to move cars in a market of oversupply by offering incentives, rebates, holdback, price supports etc. to dealers and customers. This cuts into profits which are at historic highs for dealers. [/quote]

More profitable for dealers and manufacturers. Hmmm?

At the moment car dealers are moving less vehicles and dealerships have plenty of empty spaces. I'm surprised that you think the current market is more profitable for them.[/quote]

It’s not what I think. It’s an empirical fact for most dealerships. Most are marking up vehicles to the tune of $3000 to $5000 above MSRP. In 2019, the average profit on a new car was about $1900 after taking into account dealer add-ons and F&I products (extended warranty, TruCoat, “paint sealer”). It’s now more than $5000.

https://www.autonews.com/dealers/nada-forecasts-record-2022-profits-car-dealers[/quote]

That doesn’t mean the market will sustain them doing this. It only takes one or two dealers to stop doing it and those will get all the business. Then the others will follow. Once supply rebounds, watch it happen. [/quote]

They move in unison.  There are not outliers.  [/quote]

Completely false. There is always someone willing to undercut the next guy. When supply rebounds, so will that. Most experts seem to be saying sometime in 2023. [/quote]

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