Will Coronavirus hit used car prices? (Vol 2)

[Steamer]

Panic and despair by Christmas?

[The spinner of plates]

I don’t see it going that far.

Supply won’t suddenly bounce back.
Manufacturers are enjoying the lower volume / high profit model they’ve found - they’re in no rush to start pumping out cheap metal again.

So I think it’ll just be a sluggish winter, but no more than that.

[e-honda]

The spinner of plates said:

I don’t see it going that far.

Supply won’t suddenly bounce back.
Manufacturers are enjoying the lower volume / high profit model they’ve found - they’re in no rush to start pumping out cheap metal again.

So I think it’ll just be a sluggish winter, but no more than that.

No they aren't
There was no lower volume higher profits model.
They made higher profits because they slashed R&D and marketing during the pandemic. The few extra % they were making per car didn't add up to increased profits at lower volume, and those have largely been wiped out by increasing costs anyway.
They have been enjoying having large order books because it has meant they've been able to maintain production rather than already cutting it, but there is no way they will be making significant early cuts in production just to maintain their backlogs.

[Venisonpie]

e-honda said:

No they aren't
There was no lower volume higher profits model.
They made higher profits because they slashed R&D and marketing during the pandemic. The few extra % they were making per car didn't add up to increased profits at lower volume, and those have largely been wiped out by increasing costs anyway.
They have been enjoying having large order books because it has meant they've been able to maintain production rather than already cutting it, but there is no way they will be making significant early cuts in production just to maintain their backlogs.

Have you got a source for any of that?

[ghost83]

The spinner of plates said:

I don’t see it going that far.

Supply won’t suddenly bounce back.
Manufacturers are enjoying the lower volume / high profit model they’ve found - they’re in no rush to start pumping out cheap metal again.

So I think it’ll just be a sluggish winter, but no more than that.

I think you’re deluded! I’m already seeing the effects from cost of living! Pubs caravan parks and arcades are down 50% easily!
Come winter it will go one of 2 ways it will get even worse or ppl will go to the pubs to keep warm on their heating

[Fast Bug]

e-honda said:

No they aren't
There was no lower volume higher profits model.
They made higher profits because they slashed R&D and marketing during the pandemic. The few extra % they were making per car didn't add up to increased profits at lower volume, and those have largely been wiped out by increasing costs anyway.
They have been enjoying having large order books because it has meant they've been able to maintain production rather than already cutting it, but there is no way they will be making significant early cuts in production just to maintain their backlogs.

As usual you're wide of the mark.

I'd list what's wrong with that statement, but I'd be better off trying to teach my rabbits to speak mandarin.

[e-honda]

Fast Bug said:

As usual you're wide of the mark.

I'd list what's wrong with that statement, but I'd be better off trying to teach my rabbits to speak mandarin.

Attack the person not what they are saying
Classic ad hominem

[Tagteam]

ghost83 said:

The spinner of plates said:

I don’t see it going that far.

Supply won’t suddenly bounce back.
Manufacturers are enjoying the lower volume / high profit model they’ve found - they’re in no rush to start pumping out cheap metal again.

So I think it’ll just be a sluggish winter, but no more than that.

I think you’re deluded! I’m already seeing the effects from cost of living! Pubs caravan parks and arcades are down 50% easily!
Come winter it will go one of 2 ways it will get even worse or ppl will go to the pubs to keep warm on their heating

Unfortunately I agree . If cost of living hasn’t effected people personally they think it’s all ok out there - while many are suffering and will be suffering more when mortgage rates and energy continues to rise. It’s a bit like brexit - farage saw how many people were upset with Europe (cheap immigration effecting low paid jobs). Most didn’t see it happening as it made them better off - but they could understand the other side - but farage did.

[e-honda]

Venisonpie said:

Have you got a source for any of that?

There isn't a source it's a projection.
Manufacturers aren't going to cut production to protect this fabled new more profitable business model.
It's already there in the share prices
BMW down 25% in the last 6 months
Mercedes down 37%
Tesla down 34%
VW down 35%
Ford down 54%
GM down 48%
Stellantis down 37%

For an industry with a new more profitable model that will somehow be recession proof they are doing exceptionally badly.

[Fast Bug]

e-honda said:

Fast Bug said:

As usual you're wide of the mark.

I'd list what's wrong with that statement, but I'd be better off trying to teach my rabbits to speak mandarin.

Attack the person not what they are saying
Classic ad hominem

I didn't attack you, I just said it would be a waste of my time....

However;

R&D costs haven't been slashed. List prices have gone up hugely and support (discounts) has gone down massively. To give you an indication of the spread of cost chnages, I have a customer with an outstanding order for over 100 vans. The price went up by over £2500 per unit between ordering and the first few vehicles arriving. They've gone up again by a further £600 for the next little batch and I'm expecting a further £1500 before the rest are built next year. That's not a few % in my book....

Happy to be educated with sources for your information though? I mean you may know better than me being in the motor trade and dealing with this day in day out

[e-honda]

Prices have gone up, but so have cost.
According to the ONS new car price rises are still tracking at lower than average

https://www.ons.gov.uk/economy/inflationandpricein...

Latest figure had it at 6.8% Vs 7.9% and it has been behind the curve all year.

[ChocolateFrog]

Joey Deacon said:

AlexNJ89 said:

I didn't realise how many W204 C63s there were in existence until I started following them. There are so so many for sale.

I would imagine the low teens fuel economy when they fall in price to under £20K gets very boring, very quickly.

Definitely.

When you're trundling through average speed cameras at 75 for mile after mile in something slower than a Korean EV there must come a point where you think what's the point.

And I bloody love fast estates, so hats off to the people that still think fk it.

[ChocolateFrog]

Tagteam said:

ghost83 said:

The spinner of plates said:

I don’t see it going that far.

Supply won’t suddenly bounce back.
Manufacturers are enjoying the lower volume / high profit model they’ve found - they’re in no rush to start pumping out cheap metal again.

So I think it’ll just be a sluggish winter, but no more than that.

I think you’re deluded! I’m already seeing the effects from cost of living! Pubs caravan parks and arcades are down 50% easily!
Come winter it will go one of 2 ways it will get even worse or ppl will go to the pubs to keep warm on their heating

Unfortunately I agree . If cost of living hasn’t effected people personally they think it’s all ok out there - while many are suffering and will be suffering more when mortgage rates and energy continues to rise. It’s a bit like brexit - farage saw how many people were upset with Europe (cheap immigration effecting low paid jobs). Most didn’t see it happening as it made them better off - but they could understand the other side - but farage did.

I'd be amazed too if we'll be able to look back on the coming winter and call it "sluggish"

If it's not alteast the second worst winter economically in my lifetime I'll be very surprised.

[Fast Bug]

e-honda said:

Prices have gone up, but so have cost.
According to the ONS new car price rises are still tracking at lower than average

https://www.ons.gov.uk/economy/inflationandpricein...

Latest figure had it at 6.8% Vs 7.9% and it has been behind the curve all year.

Which is why the discounts have gone down as well, which is what I said?

[ghost83]

ChocolateFrog said:

I'd be amazed too if we'll be able to look back on the coming winter and call it "sluggish"

If it's not alteast the second worst winter economically in my lifetime I'll be very surprised.

I’d honestly say this winter will decimate a lot of business! The last thing on peoples minds are cars! We are going to have fuel and energy bills mortgage rate rises and Christmas, then next year people will be skint!

Supply will be given a chance to speed up through 2023 but if there’s no buyers it’s a catch 22! They won’t want to have limited supply with limited demand, and those that do want new will start looking towards evs to save money, my old man been one of them! He’s gone from range rovers and bmw m6 to a merc e class 220d and a slk and he’s chopping the slk in to buy solar panels and a battery and he’s swapping the merc for an ev for free fuel basically, now if he’s thinking like that he can’t be the only one

[Venisonpie]

e-honda said:

Venisonpie said:

Have you got a source for any of that?

There isn't a source it's a projection.
Manufacturers aren't going to cut production to protect this fabled new more profitable business model.
It's already there in the share prices
BMW down 25% in the last 6 months
Mercedes down 37%
Tesla down 34%
VW down 35%
Ford down 54%
GM down 48%
Stellantis down 37%

For an industry with a new more profitable model that will somehow be recession proof they are doing exceptionally badly.

I think (but can't say for sure...) the fall in share price across the automotive sector is directly correlated with the outbreak of war in Ukraine. Clearly investors are pricing the risk to supply chains (the thing that's, you know, causing supply issues) rather than anything else.

What Gary and Sharon have to spend on a motor is a factor but not the one that's driving the wholesale market, lack of supply is. If volumes are lower then margins need to be higher or they'd all be bust - they're not. Fleet support has largely been withdrawn (more cash into the coffers) and the focus is on non discounted retail (more margin you see).

[Vroomer]

Deep Thought said:

Havent done this for a while, but a couple of people have been asking so heres the update.

Can we have another update?

[mrdanbartlett]

Also interesting in the graph please

Random question, there is a car on my saved list which has been on Autotrader around 40 weeks, how much would that have cost them in fee's?!

[johnnyBv8]

mrdanbartlett said:

Also interesting in the graph please

Random question, there is a car on my saved list which has been on Autotrader around 40 weeks, how much would that have cost them in fee's?!

Not much, as there's a fixed price advert til sold option with Autotrader

[buyer&seller]

johnnyBv8 said:

mrdanbartlett said:

Also interesting in the graph please

Random question, there is a car on my saved list which has been on Autotrader around 40 weeks, how much would that have cost them in fee's?!

Not much, as there's a fixed price advert til sold option with Autotrader

If it's a trader with an account advertising it then the cost is approximately £100 a month, plus any interest on the money invested in the stock and while the money is tied up in stock that's not selling when it could be invested in quick turnover cars making good profit every four weeks it's not a great business plan, so far from not much.