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when is this chip shortage estimated to end? I would love to buy a new truck but I refuse to pay what dealers are asking, and will NEVER pay over MSRP. I generally buy newer used because of the price break but those are also out of control.
Unless I TRULY NEED to replace an auto, I wont.
Whenever the auto companies want it to.
The shortage itself goes back to at least 2018, you can find plenty of references to how constrained the IC market was back then and how that effected specifically the auto industry. There's unlikely to ever be substantial investment to solve the problem on the supply side. Setting up a foundry to make silicon is extremely capital intensive. If you're going be putting that kind of money into wafer fab, you're by and large just not going to invest in the archaic silicon that the auto industry is using for a huge number of its chips which dates back to the 1990s. You're going to invest in something that makes newer chips that are more profitable. There's been some limited expansion where fabs that mothballed some of the old machinery to modernize to make newer chips have got the old equipment out of storage back on line. It's limited though, much of it was scrapped.
Which gets back to when the auto companies want it to end. They either need to invest in ancient fab production or redesign parts to work on more modern 32/22 nm chips rather than the 350 nm or whatever they're currently using which is in such short supply.
Again, wait for the quarterly numbers to come out for Q3 which should be beginning of November. GM hasn't revised its projected profits down. Given, they give decent range on that to their investors but even then, a 30% loss in sales you'd normally think would result in heads rolling, panic, the US government stepping in to socialize the company. You know, 2008. You're not seeing any of that. In other words, they're not in any real rush to rock any boats. Eventually they'll need to sort things out, but in the short term they're content to allow the chip shortage to continue and not take any drastic actions of redesigning hundreds of parts.
For used cars, if you remember cash for clunkers, killed the cheap car market. As an owner of a dealership, I was forced to pay more for a used vehicle at the auction. That in turn raised the prices of used cars as a whole. Those cheaper prices never came back. I don’t think they will at this point either. I’ve been out of the business awhile now, but I don’t remember a time when I could get more for a vehicle after owning it for 3 years than now. I paid $14,700 otd for a 2016 Ford transit connect with 53k almost 3 years ago. I know I stole it then but it was on a vw lot. Today, I’ve been offered $17,055 from Carvana.
Cash for Clunkers hurt people at the low end of the economy, people who simply needed basic transportation to get to work until they could get something better.
We picked up a 2017 Subaru Imprezza over the summer and have already been offered $1k more than we paid by another dealer. When we bought that, one dealer told us that he had 50 used cars on the lot when they typically had 500+ and one of his managers approached us multiple times to see if we had something to trade or sell.
Cash for Clunkers hurt people at the low end of the economy, people who simply needed basic transportation to get to work until they could get something better.
We picked up a 2017 Subaru Imprezza over the summer and have already been offered $1k more than we paid by another dealer. When we bought that, one dealer told us that he had 50 used cars on the lot when they typically had 500+ and one of his managers approached us multiple times to see if we had something to trade or sell.
its truly insane. I was curious so I did the carvana/ vroom offer thing.
we bought our 2015 tesla model s from my fil for the carmax offer for 32k with 39k miles in 12/2020. they now offer 39k for it with 52k miles.
my 2015 tundra crewmax was 31k with 60k miles in 2018. I now have 148k miles and they offered 24k, but could easily get 27-28k. makes no sense.
For the ones driving them into the ground, I would assume they would repair any issues and wait it out if that is how they value automobiles. I don't feel that many owners outside of a total accident or major major issue are going to replace an auto right now. Hanging on to your paid off vehicle is by far the smartest way to approach this topic at any time and its always cheaper to repair than to replace.
Right. So, repairing your old car is always going to be cheaper than buying a new car even before the pandemic, including replacing the engine in full on a car with 200K miles on it.
So, that is a personal decision. It just all depends on how you view car repair. Or ... certain people are in a financial position that the decision is made for them, so that's easy.
As for the new norm of prices for new and CPO cars, I think it's going to drop to sticker OTD ... eventually. If I had to make a guess, I'd say end of next year.
Right. So, repairing your old car is always going to be cheaper than buying a new car even before the pandemic, including replacing the engine in full on a car with 200K miles on it.
So, that is a personal decision. It just all depends on how you view car repair. Or ... certain people are in a financial position that the decision is made for them, so that's easy.
As for the new norm of prices for new and CPO cars, I think it's going to drop to sticker OTD ... eventually. If I had to make a guess, I'd say end of next year.
totally agree. I think next year we may be somewhat normal with purchasing. Maybe sooner if people would stop overpaying for pleasure. lol
Although Ford won't report until tomorrow, sales are down much worse for Stellantis and General Motors than for any of the Asian brands (except Infiniti). Ford sales are expected to have even more decrease than GM (by percentage).
General Motors sales down 33% 3rd quarter 2021 vs 2020
-36.5% Chevrolet 284,045
-31.7% Cadillac 22,519
-26.7% GMC 97,254
-20.1% Buick 39,299
Stellantis sales down 19% 3rd quarter 2021 vs 2020
-63.6% Fiat 401
-51.4% Chrysler 15,502
-31.8% Dodge 49,059
-17.0% Ram 144,740
-11.0% Jeep 196,686
-10.4% Alfa Romeo 4,529
Japanese brands were much less affected than US brands (other than Tesla), collectively sales down by 5.5%
-38.6% Infiniti 10,666
-16.5% Subaru 141,552
-11.9% Honda 307,359
-7.6% Nissan 188,289
-4.3% Mitsubishi 23,799
-2.8% Acura 38,555
+0.4% Toyota 484,912
+7.7% Lexus 81,093
+9.1% Mazda 84,046
Korea doesn't seem affected at all, collectively sales up over 9%
+4.5% Hyundai 178,500
+7.3% Kia 177,014
+301.1% Genesis 15,022
I don't think TMNA has ever beaten General Motors for even one quarter before now, and they may end up ahead for the year.
I am sure profit will be way down. While there will be more profit per sale, and some other reduced costs from shutting down the factories, it will never make up for the massive cut in sales.
What's unique about the Hyundai Genesis, that it had a 300% increase in sales? I can't recall ever seeing one, or maybe I have and it looked like every other modern day sedan.
What's unique about the Hyundai Genesis, that it had a 300% increase in sales? I can't recall ever seeing one, or maybe I have and it looked like every other modern day sedan.
Hyundai Genesis debuted in 2008 as an executive car, but in 2017 Hyundai decided to form a separate brand called Genesis in 2017 with their own dealers (like the Japanese brands Toyota formed Lexus, Nissan formed Infiniti, and Honda formed Acura). The Genesis car was now called the G80.
Sales were anemic for five years as there is a lot of competition among luxury brands.
But in February this year they got the greatest publicity a car manufacturer could hope for when Tiger Woods survived a horrific crash with only relatively minor injuries. Tiger Woods Car Crash Was in a Genesis GV80
Brand recognition skyrocketed and obviously sales increased. Everyone with money wanted the car that saved Tiger Woods. Average Transaction Price last month at Genesis was higher than all the other Asian brands.
$28,754 Mitsubishi
$31,895 Kia
$32,409 Nissan
$32,807 Hyundai
$32,840 Mazda
$32,978 Honda
$34,810 Subaru
$36,736 Toyota
...
$48,286 Acura
$51,237 Lexus
$51,987 Infiniti
$59,118 Genesis
While sales tripled, but you are still talking about a relatively small number of total cars. Genesis sold 15,022 in 3rd quarter of 2020 and 34,320 vehicles in 3rd quarter of 2021.
For used cars, if you remember cash for clunkers, killed the cheap car market. As an owner of a dealership, I was forced to pay more for a used vehicle at the auction. That in turn raised the prices of used cars as a whole. Those cheaper prices never came back. I don’t think they will at this point either. I’ve been out of the business awhile now, but I don’t remember a time when I could get more for a vehicle after owning it for 3 years than now. I paid $14,700 otd for a 2016 Ford transit connect with 53k almost 3 years ago. I know I stole it then but it was on a vw lot. Today, I’ve been offered $17,055 from Carvana.
Yea, I think the inflation is here to stay to an extent.
My sister actually totaled her car and needed a new car and she overpaid (even in this market) for a lightly used car. But ... she can afford, she totally needs it, and it won't affect her in the long run.
The people I feel worst for are those who need a car and are buying at the 7-9K price range, because what you're really getting is a car in the 5-7K range, and it could have some serious problems before long.
For the third quarter Ford was down 27% from last year, slightly better than General Motors down 33%. Toyota lost sales badly in September, but they did well enough in July and August to put them in #1 position. This might be the first time since WWII when General Motors may not end up as #1 at the end of the year.
Stellantis breakdown by brand (US sales for 9 months of 2021)
604,671 JEEP
495,410 RAM
175,361 DODGE
74,139 CHRYSLER
14,193 ALFA ROMEO
2,107 FIAT
1,365,881
General Motors breakdown by brand (US sales for 9 months of 2021)
1,149,030 CHEVROLET
381,518 GMC
151,010 BUICK
95,925 CADILLAC
1,777,483
Ford-Lincoln breakdown by brand (US sales for 9 months of 2021)
1,331,542 FORD
65,962 LINCOLN
1,397,504
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Ford announces sales figures for 3rd qtr 2021
