March Vehicle Sales Forecast...YIKES!

11,267 Views | 62 Replies | Last: 3 yr ago by Iowaggie
crowman2010
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Just saw this drop on MarketWatch:

Quote:

March car sales will drop by 36% compared with March 2019 and decrease in sales from March 2019 and a 23% decrease from February, analysts at Edmunds said in a note Wednesday. They forecast that due to the novel coronavirus pandemic the estimated seasonally adjusted annual rate for March will be 11.9 million vehicles sold. The March downturn will also lead to a drop in quarterly sales, forecasting that 3.5 million new cars and trucks will be sold in the first quarter of 2020 to reflect an 11.8% fall from the first quarter of 2019.

https://www.marketwatch.com/story/march-car-sales-forecast-to-drop-by-36-2020-03-25?mod=home-page
Cromagnum
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Good. That means things will actually be competitively priced later this year when there is a glut of 2020 fleet standing in the way of 2021 models.
nortex97
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I'm actually surprised they aren't dropping more. Not a lot of 'essential travel' involves "gonna go buy a new F-150.' I also would venture a guess that the rental companies are suddenly looking to cut back on new purchases.

I'm not real confident of the total but something like a third of vehicles are leased, I believe. That could become an interesting dynamic in the next few years if this madness continues much longer, for net vehicle sales.
AgGrad99
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Quote:

I'm actually surprised they aren't dropping more.
Me too. I am surprised it's not flipped, and only 36% of usual sales, rather than 36% down.
harge57
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I bet April looks more like the 70% drop. I am sure a lot of people were in the process in early March.
BlueSmoke
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So truck pricing will actually reflect you are buying a truck, and not a luxury SUV......
Nobody cares. Work Harder
EMY92
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harge57 said:

I bet April looks more like the 70% drop. I am sure a lot of people were in the process in early March.
That and not many were expecting to get laid off in the first half of March, now many will be lucky to have a job come April 1.
The Fife
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BlueSmoke said:

So truck pricing will actually reflect you are buying a truck, and not a luxury SUV......

Depends, a lot of trucks have gone full Brougham. They're luxo-barges that have a small bed in the back.
YouBet
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nortex97 said:

I'm actually surprised they aren't dropping more. Not a lot of 'essential travel' involves "gonna go buy a new F-150.' I also would venture a guess that the rental companies are suddenly looking to cut back on new purchases.

I'm not real confident of the total but something like a third of vehicles are leased, I believe. That could become an interesting dynamic in the next few years if this madness continues much longer, for net vehicle sales.
Man, I wonder if it's not significantly higher than that. Guy that I buy cars from says 80% of his sales are leases.
O'Doyle Rules
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great news as long as your arent a greasy car salesman
crowman2010
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Remember the auto bubble I talked about a while back due to extremely high vehicle prices and continuously extending the length of payments...this might just make it pop
nortex97
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crowman2010 said:

Remember the auto bubble I talked about a while back due to extremely high vehicle prices and continuously extending the length of payments...this might just make it pop
The likely response imho is going to involve very long warranties (48-60 months bumper to bumper) and something like zero percent interest on 5 year loans (thanks to printing money). A vast majority of the gizmos (safety features) can't be de-contented at this point, and long term the mfg's realize the Dems are going to continue to drive fuel efficiency up (it's already around 8K worth of junk on your diesel pickups).

Warranty headaches they can deal with in a few years, but all the manufacturers will be desperate to move units in 2H 2020. The luxury makes are going to get destroyed.
drumboy
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nortex97 said:

crowman2010 said:

Remember the auto bubble I talked about a while back due to extremely high vehicle prices and continuously extending the length of payments...this might just make it pop
The likely response imho is going to involve very long warranties (48-60 months bumper to bumper) and something like zero percent interest on 5 year loans (thanks to printing money). A vast majority of the gizmos (safety features) can't be de-contented at this point, and long term the mfg's realize the Dems are going to continue to drive fuel efficiency up (it's already around 8K worth of junk on your diesel pickups).

Warranty headaches they can deal with in a few years, but all the manufacturers will be desperate to move units in 2H 2020. The luxury makes are going to get destroyed.
Wonder if optioned Kias will still sell for $45K.
HollywoodBQ
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crowman2010 said:

Remember the auto bubble I talked about a while back due to extremely high vehicle prices and continuously extending the length of payments...this might just make it pop
Out here in LA, I'm already seeing ads on TV for no payments for 90 days, 0% interest for 72 months.
EMY92
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I saw a GM commercial for 120 days no payment and 84 months at 0%
crowman2010
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HollywoodBQ said:

crowman2010 said:

Remember the auto bubble I talked about a while back due to extremely high vehicle prices and continuously extending the length of payments...this might just make it pop
Out here in LA, I'm already seeing ads on TV for no payments for 90 days, 0% interest for 72 months.
Ron Carter in Alvin, TX is advertising no payments for 6 months, 0% for 84 mo!
The Lost
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They also paying for your gap insurance?! Holy cow
FTAco07
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Anyone who thinks this is going to be the end of inflated car prices via cheap financing is way off. As you can see, interest rates have gone lower for longer than ever. The 5 year treasury rate is 0.5% and the 10 year rate is 0.82%. As a point of comparison, in the absolute worse of the market of 2009 the 10 year rate bottomed at 2.2%. If we had 60-72 months of no interest financing back then get ready for 5-10 years of no interest financing now.

Also, for those expecting dealerships to be offering major discounts, I wouldn't count on it. With all manufacturing shut down, the inventory on the lot is all they are going to have for a while so dealers are going to get every last penny from those units while simultaneously making it "affordable" via low interest rates.
bkag9824
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FTAco07 said:

Anyone who thinks this is going to be the end of inflated car prices via cheap financing is way off. As you can see, interest rates have gone lower for longer than ever. The 5 year treasury rate is 0.5% and the 10 year rate is 0.82%. As a point of comparison, in the absolute worse of the market of 2009 the 10 year rate bottomed at 2.2%. If we had 60-72 months of no interest financing back then get ready for 5-10 years of no interest financing now.

Also, for those expecting dealerships to be offering major discounts, I wouldn't count on it. With all manufacturing shut down, the inventory on the lot is all they are going to have for a while so dealers are going to get every last penny from those units while simultaneously making it "affordable" via low interest rates.


What happens when the typical folks looking for "affordable" don't have a job and can't qualify for credit? Will they just lower credit requirements to move units?

We're talking millions of newly unemployed people in less than a month's time, and the stealerships are already at 0% for 7 years? Not so sure an additional 1-3 yrs of financing moves enough volume to keep all the dealerships out of the red.

But I'm not the typical buyer who's willing to take out that kind of loan, so you may be correct.
FTAco07
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The Federal Reserve has made the unprecedented move to step in to the market and is buy asset backed securities now including credit card, auto loans, etc. Dealerships only care if they can sell your loan in 1-3 months, not if you can repay it. If the buyer pool for those loans is artificially inflated via new government stimulus packages or lower rates in alternative debt investment options someone will buy auto loans and the dealer will be happy to make them to you.
FTAco07
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I should say, I'm not claiming new vehicle prices won't go down eventually, but I don't think it's going to happen in the near term given production shutdowns and the current fed actions. If production ramps back up soon and people choose not to buy new vehicles due to job uncertainty then ultimately prices should adjust regardless of financing. I merely wanted to point out the macro debt markets are currently enabling dealers to make financing "deals" even more aggressive/egregious (depending on your point of view) than the worst of 09/10
EMY92
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There are competing forces for the price.

1. The supply of new inventory has dried up, although I did see Ford wants to restart F150 production in mid April.

2. Many people that were looking for a new ride are now unemployed and have dropped out of the market.

My guess is that due to the lack of sales, you should be able to find a good deal.
Naveronski
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I really like the idea of picking up a 3/4 ton for cheap later this year.
maroon10
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We were about to purchase a new Honda Pilot this month but obviously halted with everything. Requested a new quote and it was the same as one we got beginning of February.
aggiepaintrain
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Demand - Soft
Prices- Drop

simple as that
FJB
crowman2010
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Guidelines extended till April 30th per Trump now. Really going to see prices tank IMO
BlueSmoke
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maroon10 said:

We were about to purchase a new Honda Pilot this month but obviously halted with everything. Requested a new quote and it was the same as one we got beginning of February.
In this market, time is a buyers best friend. Just wait them out if you can.
JAW3336
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What's the best course of action here?

Let the dealer know you are in the market and wait until they come down to a price you want?

Or wait to shop until it seems like prices are coming down?

We are wanting to buy a used or possibly new car and we are definitely not in a hurry.
Spoony Love
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Following this post's responses. I'm in the same boat. Looking at purchasing but definitely not necessary right now.
AustinCountyAg
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I will be in the market at the end of summer. I'd love to be able to get a king ranch or at4 for mid $40's. We shall see
The Lost
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aggiepaintrain said:

Demand - Soft
Prices- Drop

simple as that
To some degree yes, but they aren't going to sell them for a dramatic loss just to move them too. It may drop the margins, but the supply will be lower too which has its own effects.
aggiepaintrain
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this is unprecedented

bump this in 3 months

30% unemployed on the horizon, car makers are screwed
ElephantRider
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AustinCountyAg said:

I will be in the market at the end of summer. I'd love to be able to get a king ranch or at4 for mid $40's. We shall see

Is this actually possible?
Rustys-Beef-o-Reeno
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ElephantRider said:

AustinCountyAg said:

I will be in the market at the end of summer. I'd love to be able to get a king ranch or at4 for mid $40's. We shall see

Is this actually possible?



Not a loaded out one but a base king ranch 4x4 for sure
Hey, check out this car I found on Cars.com: https://www.cars.com/vehicledetail/detail/796704618/overview?aff=share_other

I could easily see 15k off msrp come "truck month"
Buck Turgidson
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The Fife said:

BlueSmoke said:

So truck pricing will actually reflect you are buying a truck, and not a luxury SUV......

Depends, a lot of trucks have gone full Brougham. They're luxo-barges that have a small bed in the back.
According to Dodge, their pickup is the world's best luxury car.
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