New Vehicle Sales in 2021 at 1978 Level: 25 Years of Stagnation Interrupted by Plunges. But Prices Explode to WTF Level

GM and Ford sport 6 year declines of -28% and -27%. Toyota blows all away, but still -7% from 2015. Hyundai-Kia sets new record. Captured in charts.

By Wolf Richter for WOLF STREET.

New vehicle sales in 2021 were marked by supply-chain chaos and the semiconductor shortage. But there was sufficient demand, and consumers switched from astute car buyers to paying whatever, resulting in a collapse of price resistance among consumers, the likes of which I have never seen before, which led to a record spike in prices and obese gross profits per vehicle for dealers. Automakers, dogged by supply constraints, prioritized higher-end models. And the average transaction price exploded. GM, Ford, and others got battered by the chip shortages. Others emerged with their dignity intact. Toyota trounced GM and became Number 1 for the first time ever.

But in terms of sales volume, it was another crappy year. Total new vehicle sales – the number of vehicles delivered to ultimate retail and fleet customers – ticked up about 3.1% from the collapsed levels of 2020, to 14.93 million vehicles, about the same as in 1978, adding another year to the 25-year stagnation interrupted by plunges, where the only thing that’s booming is prices.

Prices exploded.

Automakers slashed incentives. The MSRP remains fixed for the model year. The way automakers adjust prices during the year is to increase or decrease the incentives to dealers and customers. In December, average incentives dropped to 3.5% of MSRP, according to J.D. Power estimates. In 2019, incentives ran over 10% of MSRP.

Dealers charged more for the vehicles, often advertising vehicles with addendum stickers, of $2,000 or even $20,000 over MSRP. And most astonishingly, there were enough people who paid those crazy prices. So the average gross profit per vehicle sold spiked by 165% year-over-year, to a record $5,258 per vehicle, according J.D. Power estimates.

Those dynamics have even shown up in the CPI for new vehicles, which, despite the notorious hedonic quality adjustments, spiked by 11% over the 12-month period through November, the third worst price spike on record, the other two having been in 1975.

Average Transaction Price exploded to WTF level.

In addition to these pricing dynamics – the cuts in incentives by automakers and the pricing at the dealer level – there was widespread prioritization of loaded higher-end models by automakers. Lacking components due to the chip shortage, they were building the models that would produce the most revenues and profits. And consumers – many of them having benefited from the Fed-triggered boom in asset prices – went for them.

As a result, the Average Transaction Price (ATP) spiked by 20% year-over-year to $45,743 in December, according to J.D. Power estimates. Over the two years, December 2019 through December 2021, the ATP exploded by $10,800, or by 31%. This is just nuts. Soon, dealers will advertise, “Buy One for the Price of Two”:

Sales volume by top automakers in the US.

During the 25 years of stagnation-interrupted-by-plunges, legacy automakers took an additional beating from the arrival of newcomers that ate into their slices of this already stagnating pie. Those newcomers include notably Hyundai and Kia, Mitsubishi, and more recently, Tesla.

Tesla doesn’t disclose US deliveries; it only discloses global deliveries. So it doesn’t have a spot in this lineup.

Toyota sales 2021: +10.4% from 2020, -7% since 2015. Toyota too got slammed during 2020, but in 2021, it navigated the chip shortages a lot better than its US counterparts, in part by having made special deals with its key suppliers a decade ago following the collapse of its supply chains due to the earthquake and tsunami in Japan. In 2021, it won the production war and had more vehicles to sell:

GM sales 2021: -12.9% from 2020, -28% since 2015, a six-year collapse in volume that is hard to grasp.  After the multi-year process of declining sales, GM then got slammed by the pandemic in 2020 and by the semiconductor shortage in 2021. With total sales of all its brands at 2.218 million vehicles, GM got kicked into the Number 2 position, behind Toyota:

Ford sales 2021: -6.8% from 2020, -27% since 2015. With sales down to 1.905 million vehicles, after a six-year decline that sharply accelerated in 2020 and 2021, Ford, the perennial Number 2, got knocked into the Number 3 slot.

Fiat Chrysler sales 2021: -2.4% from 2020, -22% from 2015. With sales down to 1.777 million vehicles, the automaker, now in the Stellantis group, remained in the Number 4 slot, with Honda and Hyundai-Kia moving in on it.

Honda sales 2021: +8.9% from 2020, -10.6% from 2017. With 1.467 million sales, Honda remained in the Number 5 slot, but now just a hair above the combined Hyundai-Kia:

Hyundai-Kia sales 2021: +19.1% from 2020, +1% from 2016, to a new record of 1.439 million vehicles. Hyundai owns a big portion of Kia, and there are numerous cross-shareholding deals between Kia and entities in the Hyundai chaebol. The vehicles share many components. So here, I look at them as two brands of the same automaker.

After two very rough years following the peak in 2016, sales began to recover in 2019. The pandemic slapped them down again in 2020, but in 2021, sales spiked to a new record of 1.439 million vehicles, just a tad behind Honda:

Nissan sales 2021: +8.7% from 2020, -39% since 2017. Of the major automakers, Nissan’s sales collapsed the most. In 2020, sales were down 43% from the peak in 2017. In 2021, sales rose from that catastrophically low level, to 978,000 vehicles, but still below 1 million for the second year in a row.

Where are the German automakers? Despite the hoopla around them, they’re relatively small in the US. BMW, Mercedes Benz, and Volkswagen (the company hasn’t released sales figures yet) sell below 400,000 vehicles each in the US, and don’t fit into the top automakers in the US.

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  177 comments for “New Vehicle Sales in 2021 at 1978 Level: 25 Years of Stagnation Interrupted by Plunges. But Prices Explode to WTF Level

  1. david calder says:

    Most of the people that I know are pulling back.. It might seem odd in the middle of a boom but are we seeing the beginning of a very long waited and anticipated bust?

    • Depth Charge says:

      I’ve been pulling back for over a year. I continue to save money, inflation be damned. I am confident I will be in a better position in the long term with a massive stack of cash vs a debt junkie with a whole bunch of monthly payments and no cash.

      • historicus says:

        I dont buy anything…
        take that J Powell.

      • Hypprime says:

        Using debt (fixed rate) to buy productive assets could be a good way to hedge future inflation
        I will return to cash/western fixed income when governement debt will have been reduced to reasonable level by inflation

        • Augustus Frost says:

          If it’s “reasonably” priced but not otherwise.

          I’d place a home in this category, assuming the buyer doesn’t mind the risk of an interim price decline or crash and can actually afford to keep it. Everyone has to live somewhere.

    • Flea says:

      Exactly Aldi is packed even on weekdays usually not crowded

      • Djreef says:

        Do you realize that those stores are run by only 3 people at any given time. Everything from the back room to the front lines. 2 staff and a manager – that’s it.

        • Marcus Aurelius says:

          My family loves Aldi.

          One brand. One Choice.

          You are in and out and know you are most likely paying the best prices around.

          This last weekend, while shopping there, I did notice they raised prices. It is easy to remember what you last paid the last time, since there is no product confusion, with their One Choice concept.

          I am not blaming them at all.

        • Flea says:

          B S cashier,2 stockers receiving guy,manager minimum just way more efficiently run example 3# of onions 1.29$ bakers 2.99$ in Omaha ne bakers is a division of Kroger can u spell BLOATED

      • joe2 says:

        Right. Aldi and Lidl are killing it. Their prices are in many cases 1/2 those of other stores. Not a gourmet selection like some stores but I like the isles-cluttered-with-boxes atmosphere which is very European. You get to try things you never heard of. Not all good but not boring. And being boring is the US national pass-time now.

    • Yort says:

      I know a lot of people who are pulling back on a personal level, yet I know a lot of business owners that are pushing forward fast with purchases as every month prices jump substantially, and a lot of business can hoard inputs, including my own. I’m pulling forward years of future capital investments, and so I have saved a fortune already as I started 18 months ago, and just now are my competitors are just starting to panic buy as they figure it out that the Fed has been lying on purpose. Pays to pay attention to the global economy, and especially the liquidity cycle of the global Feds…

      I fear the Fed is ignorant enough to purposefully be behind the inflation curve in order to deal with excessive debt, this is a feature and not a mistake in the Feds view I fear. What they fail to understand is that humans have emotions, and you can’t make a reliable economic equation on inflation when the emotions become majority and tribal concerning inflation. And looking at the latest Bloomberg small business plans to increase compensation, it is the highest since 1886, with 48% raising compensation and 32% planning to raise compensation. Other than tossing the entire economy into a massive recession, what can the Fed do to keep wage inflation from spiraling out of control???

      • Tom S. says:

        Inflating away the government debt only works when inflows from taxes increase due to the inflation. The best way to handle the debt and control inflation is to repeal the Trump tax cuts, not hope that inflation trickle-trickles down into tax receipts. The inflation is going right into billionaire assets or corporate assets that taxes are not paid on. I don’t really understand inflating away the debt, but I do understand inflating away the middle class and causing mass uprisings.

        The Fed has pivoted and is coming after inflation, denial is more than a river in Africa.

        • Augustus Frost says:

          There is a spending problem, not a revenue one.

          No amount of tax increases will ever resolve the US budget’s dire long-term trajectory.

          Problem is this fake economy is dependent on fiscal and monetary stimulus for all “growth”. Any meaningful reduction will send the economy into a big recession, at minimum.

          No, there isn’t ever something for nothing.

        • Yort says:

          I really wish the Fed was going to tackle inflation, but at this point they will most likely jaw-bone the markets, the Fed knows how money printing creates inflation, so one must assume that “inflating the debt away” or some other PhD economist nonsense is our current path of financial repression.

          Trailing 12 month growth of M2 and CPI:

          US M2 = 13.07%, US CPI = 4.93%
          UK M2 = 8.05%, UK CPI = 4.00%
          EU M2 = 7.16%, EU CPI = 2.6%
          Japan M2 = 4.00%, Japan CPI = -1.2%

          Now the real dangerous part is the lag/delay of monetary policy, especially when it comes to inflation. Inflation caused by the past 12 month Fed actions could continue for 1-3 years, and the labor shortage, due to multiple reasons, could last decades.

          Inflation delay due to increase in Money Supply M2 Chart:

          https://pbs.twimg.com/media/FIgzoAHVIAE86P9?format=png&name=small

    • miles venzara says:

      One thing that Wolf hasn’t covered is the prices of general aviation aircraft. There’s no pullback in this market. Sales are stronger than ever. Single engine planes are selling for 4-5 X’s what they sold for 5 years ago. Corporate jets are on the market for 30 days or less.

      • NBay says:

        Yeah, Miles. The rich don’t hate ALL the government. They love the FAA, Patent Office, and Defense Dept….and there may be some other “socialisms” they like….just don’t want to pay for any of them.

        Class Warfare is the only game in town, and all those who still have assets of value to them, (like most everyone here) better watch out, as you just aren’t along for the ride….trust me. But keep on dreaming and hoping and punching down.

        To those even lower down, keep on voting against yourself and hating your own government, and giving the Corps and PE a free pass…envy is a mortal sin, ya know?

  2. Max Protein says:

    Are all the majors predicting future EV sales to cannibalize or complement ICE car sales?

    • Wolf Richter says:

      EVs are the only thing that is booming in this industry, and it’s a zero-sum game, and ICE sales are on decline. So yes, every EV sold is an ICE vehicle not sold.

      • Charles Ponzi says:

        In Honolulu the sales of the Jeep Wrangler are booming for some reason.

        The thing is a slab sided 4 seat SUV with hood tie downs, no windows and door hinges on the outside of the body. It screams CHEAP but the locals are queuing up to pay US$60k and over to buy one.

        Can someone please tell me why anyone needs a faux WW2 jeep in Honolulu. Oahu is an island, you can’t drive more than 30 miles before you hit the ocean. you can’t drive into the mountains except on paved roads since its protected land. it rains a lot so the no window schtick is ridiculous.

        • Djreef says:

          If there ever was an environment where an EV was not only ideal, but necessary?

        • andy says:

          Mercedes sells their square box SUV with hinges on the outside for $160K. Very popular with nouveau riche.

        • IanCad says:

          Rather like the Hummer of a decade ago. I’ve never understood why a man would want to proclaim his testicular insufficiency.

        • Marcus Aurelius says:

          You never know when you might need it in another sneak attack.

        • perpetual perp says:

          Adam Smith in 1776 book ‘Wealth of Nations’ wrote: “But the rate of profit does not, like rent and wages, rise with the prosperity, and fall with the declension of the society. On the contrary, it is naturally low in rich, and high in poor countries, and it is always highest in the countries which are going fastest to ruin.” No competition, high income inequality=’fastest to ruin.’

        • Gilbert says:

          You want a vehicle that drives like a truck and is uncomfortable as heck — buy a Jeep.
          Many are driven by young females in this neck of the woods.

        • ElbowWilham says:

          I’m over on the Big Island and the only people I see driving Jeeps are the tourists. Most of us locals drive Ford or Tacoma Pickups. But we have a lot of off-road only roads to the ocean here.

        • joe2 says:

          I saw a real WWII jeep in the parking lot recently – WHISKY painted on the extra gas can on the fender and well restored. It looked tiny compared to the current Jeeps.

          Everything eventually goes baroque or super-sized in this looney country.

          There’s only 2 little stretches of road on Oahu and Maui that I know of that warrant 4WD. But that was a while back.

        • Dave Chapman says:

          @Djreef When London and Berlin ban ICE cars, a lot of people will suddenly decide that they cannot justify owning a non-electric car.
          This is partly because many people have to go into the city from time to time, and because this rule will obviously spread.
          If (when) ICE cars are banned from most cities, they will be purchased only by rural people. . .

        • Art Pattervan says:

          Maybe because it’s pure fun of yesterday and the anti boring Tesla Honda Toyota Lexus cookie cutters of today. Different strokes for different folks

      • Max Protein says:

        Is it then logical to conclude future net profits are guaranteed to go down unless gross profits go up? Establishing new EV manufacturing and supply chains can’t be cheap.

        Industry will be in a tough spot if demand collapses due to these higher prices.

    • Swamp Creature says:

      Has anyone ever mentioned that EV’s have no engine in the front of the car to absorb a head on collision. If you are unfortunate enough to get into one, maybe one that is not even your fault, you will be nothing but hamburger meat.

      This happened to a family near me who was in a Chevy Volt. The dude that hit them is now in the slammer for 10 years for speeding and reckless driving.

      • Dave says:

        Teslas are designed to incinerate the driver and passengers without the need of a collision, so there’s no reason to worry.

      • Apple says:

        It is much easier to design a safe electric car because you don’t have to design the crumple zones around a rigid block of metal that can’t enter the passenger compartment.

        The whole front end of the car can crumple away, making it easier to dissipate energy.

      • JGarbo says:

        Tesla has passed all safety tests top of class. That’s good design, simple. Other EVs eg GM’s Bolt not so good.

      • Wolf Richter says:

        Swamp Creature,

        Most modern EVs are based on the skateboard platform. The more powerful EVs have two or more motors, usually one or two in front, and one or two in the back, between the wheels. There is some electrical equipment under the hood, plus some space to store stuff. Structurally, the skateboard platform is very safe, and space in the front is a very good crumple-zone.

        The Volt is a hybrid, with a gasoline engine in the front under the hood. You might be referring to the Bolt, which is the EV, and a very small compact SUV. It’s like any small vehicle.

        Head-on collisions are always the most dangerous. If two vehicles hit each other head-on, each going 50 mph, the approach speed is 100 mph, and it’s like crashing into a wall at 100 mph. The chances are not good, no matter what conveyance you’re in.

        • Joey J says:

          Sorry Wolf, going to have to correct you there. Mythbusters got it wrong too in their tractor trailer episode. If both vehicles are the same mass, their speeds go from 50 mph to 0. If a car goes head first into a semi then yes, it will go from 50 to ~-50 mph so around 100mph in total.

        • Yort says:

          Joey is correct. The reason though a solid, immovable object, like a tree or wall is so much wore deadly is that unlike another car, there is no energy absorption “crumple zones”. I’ve seen cars split in two by relatively small 15 inch diameter trees (the smaller diameter acts like a knife blade), always shocked the roots hold so well on impact with 3-4 thousand pounds going 60 mph. Even a fresh telephone pole can be deadly if it does not snap off instantly. The old guard rails used to be worse, but now they use wood or drilled aluminum posts to allow them to absorb impact energy. Even better are the cable systems you see on interstate highway mediums.

          Funny enough Nascar and F1 have done a lot of advancements for society by designing wall and fence impact systems that can handle 200mph impacts at certain angles, along with roll cages, safety restraints, fire proofing, etc that allow driver to walk away from what would have killed them only 15 years ago. IMHO, the safety advancements of racing are as impressive if not more than what Elon has pulled off with EVs…

        • drg1234 says:

          A correction for you, Wolf:

          Frontal collisions have the most delta-V, but also have the most crumple-steel etc. The most dangerous collisions are frontal-offset collisions, where impact occurs into the front quarter panel. The wheel winds up in the back seat.

          Side impact (the ‘t-bone’ crash) is also a big problem, as there is very little room between the occupant and the bumper of the colliding car. Survivability of these crashes has increased dramatically due to high strength crossmembers and side air bags.

          All these things contribute to the really remarkable fact that 90% of vehicle fatalities in the US occur at a combined delta-V of 35 mph or less (this is why the standard crash test is done at 35 mph).

        • drg1234 says:

          Oh, forgot the biggest reason why that 35mph number is so low – half of people who die in cars in the US didn’t wear their seat belt.

        • Swamp Creature says:

          I’ll never forget the videos they forced us to watch when I was in training at Newport R.I. for Navy OCS. They showed videos of cars hitting trees at various speeds. Even at relatively slow speeds, the cars completely wrapped around the trees. The trees never budged. No one in the vehicle could survive such a collision. The cars were empty and the videos were just for demonstration purposes, but they were scary nevertheless. They showed others which which were even more graphic. Still having nightmares over these videos. What the hell that had to do with running a Navy ship I’ll never know.

        • volt owner says:

          The Volt does not have 2 engines. It has an electric engine and a gas-run generator — which it switches on in cold weather when batteries don’t work so well. On a trip it can run on gas if you can’t charge it.

        • Wolf Richter says:

          What I said was this:

          “The Volt is a hybrid, with a gasoline engine in the front under the hood. You might be referring to the Bolt, which is the EV, and a very small compact SUV. It’s like any small vehicle.”

        • 91B20 1stCav (AUS) says:

          Swamp-as someone old enough to have had Driver Ed. in the ’60’s when it was still curriculum in my CA high school (Chrysler-funded driving simulators and dual-control Plymouth Valiants on a driving range, and then the streets), i well-remember the numerous, gore-soaked documentary films we were shown in an effort to impress on our young minds the possible results of poor driving (“Signal 30” only replaced in my dreams by later combat experience).

          Given that we served in a time when the numbers of young men entering the military (enlisted or drafted) was much larger than later, or now, it was probably an effort by the Navy to protect at least some of their training investment in young officers/EM’s who might be prone to financing that shiny new Corvette or GTO, then imperfectly attempt to demonstrate the performance capabilities of same… (didn’t encounter a program like that in the Army, but i was never close to OCS…).

          may we all find a better day.

      • Cem says:

        Help me understand this, you believe a 300lb piece of cast iron absorbs.. impact?

        • 91B20 1stCav (AUS) says:

          Cem-that engine block isn’t solid, and, in fact, is full of holes. And many, many current blocks are aluminum, and even more deformable…

          may we all find a better day.

    • Tom S. says:

      They are investing heavily into developing the EV chassis so that it is an option for every vehicle size, and then will let the market decide. Each of the main models will have an EV powertrain version for maybe an additional 7-10 grand. EVs still significantly more expensive than ICE and the people in automotive outside of Musk actually remember what a downturn looks like as people get priced out of cars. ICE is still no 1 until EV costs come down or gas hits 6 dollars a gallon. I think it still remains to be seen whether EVs can actually be sold profitably en masse. Tesla has a lot of high end vehicle sales and subscription services that got it to profitability, if the high end stuff slows and the energy credits fade I’m still not convinced they make money. The battery costs have to be fluctuating wildly with commodity prices.

  3. DR DOOM says:

    It now costs the average joe a lot of dough to go to work if it involves driving. A used vehicle to go to a $15 an hour job is a joke . A new vehicle would be insanity. Any job that has some type of responsible outcome, such as flipping my burger is gonna see even more WTF moments in 2022. I think that 2022 will be chock full of WTF fodder. The inflation political heat in the kitchen is just starting to warm up. the Fed’s inaction and reckless easy money has caused directly or indirectly all types of disruptions in all markets.I get a chuckle when I hear “experts” say inflation will vanish in a couple of months.

    • Depth Charge says:

      Most people don’t do the math on total cost of ownership. For many, it does not make financial sense to own a car anymore. They cannot realistically afford it.

      • MiTurn says:

        DC, sometimes it is a necessity, if there is no alternative. I live 12 miles from the nearest town…I suppose I could ride a bike.

        • Flea says:

          Electric

        • WES says:

          Well, you can always ride a self-driving Tesla donkey!

          In 1978, I saw plenty of self-driving donkeys in the Sahara Desert!

          Their riders would always look skyward and say “Phraise to Allah!” before the donkey, with it’s head down, crossed the 100 km/hr highway!

          Nice thing about self-driving donkeys, is they don’t suffer from chip shortages!

        • BuySome says:

          Evr’y time I go into town,
          Them boys start to kickin’ my car around.
          I don’t care if her tires ain’t round,
          They’d better quit kickin’ my car around.
          Get along Blue….you gas hog you….
          They’d better quit to kickin’ my car around.

        • Augustus Frost says:

          Depends upon definition of “afford”.

          If someone cannot really afford it, doesn’t matter how necessary. Most Americans can only “afford” their current living standards with artificially cheap money, government transfer payments, and inflated asset markets. Look at median household income and net worth which have flatlined according to the FRB’s own data (on FRED) since late 90’s. This is even with an unprecedented fake economy and asset mania.

          This isn’t exactly a foundation that bodes well for the future.

          The majority of Americans are destined to become poorer or a lot poorer when the fake economy can no longer be sustained.

      • Margaret Fagan says:

        A friend of mine a couple of years ago figured out what it cost her to keep her car vs getting Uber. Came out even, which included no cost for parking. But she had sense to include depreciation (which might not be a negative these days.). After all the monetary things, she realized that getting picked up at the front door, especially in the rain and cold is worth a lot. I’ve had the happy experience of getting picked after a concert about as soon as I could get to the front door rather than paying a lot for parking, walking a couple of blocks and waiting in line to get out. So I suggest you consider it. I’ve gotten rid of my car and while I miss some convenience, I’m not unhappy.

        • ivanislav says:

          Yes, but you are now at the mercy of those services if things get dicey in any way. You are more reliant on civil society. We all are of course, but you have less buffer now.

          For example: a cell-phone outage (no Uber/Lyft apps), or civil unrest (no drivers).

        • nick kelly says:

          Few years back I gave up driving for precisely 90 days ( for Lent, lol) My transportation costs went way up. I have never purchased one cent of extra insurance. Basic here is 50$ mo. I was driving older Japanese 4 cyls NEVER financed. One taxi ride of $15 would equal my normal costs for 3 days. I’m a bit leery of new friends who don’t drive because they often want rides. If you are an urban core type, fine. I like to move around when feel like it.

        • MiTurn says:

          Will Uber haul my garbage to the dump? No garbage service here…

        • Augustus Frost says:

          Longer term, the financial downside to this strategy is that ride sharing (Uber and Lyft) are subsidizing their customers with shareholder capital. The drivers have been too by effectively accepting low hourly comp, often because they don’t understand full ownership costs.

          This isn’t sustainable forever.

          Traditional taxi services previously had a monopoly but that’s not the full explanation for their much higher prices. The investors and drivers need to make enough money.

      • Swamp Creature says:

        DC

        We’re a one personal car family. Own a 20 year old car. Bought it used just before 9/11. We can afford that. The other car is used strickly for business. We write off the mileage as a tax deduction and it keeps out income lower than it would otherwise be. Break even on it every year. So that’s a win, win.

    • Old school says:

      Dave Ramsey’s rules of thumb about a car is:

      1. Don’t drive one worth more than half your income.
      2. Pay cash.
      3. Don’t dump more than 50% of car’s value into a repair.

      All common sense rules I think.

      • andy says:

        That sounds ridiculous. Sorry.

        • Augustus Frost says:

          It’s not ridiculous, except to someone who doesn’t mind living above their means. Look how most people seem to approach car buying over their entire life.

          The median household net worth (according to FRED) was about $121K as of 2019, not much different adjusted for price changes from 1998.

          If someone buys even a $20K or $30K car every five years (not unusual at all) and it loses at least half its value (as it normally does), how is the average American supposed to build wealth over their lifetime when an “asset” representing 20% to 30% of their net worth is constantly depreciating?

          Remember, these are averages, not where the person’s income (and presumably net worth) increases substantially over their life.

          Let me guess, they are supposed to make it up by participating in an asset mania?

          The correct answer is that they can’t and maybe they don’t care.

          I don’t care either, except that Americans in the aggregate somehow concluded they have a birthright to minimum living standards, even if it’s at someone else’s expense.

      • Peanut Gallery says:

        I think these are extremely sound pieces of advice. Andy, what is ridiculous about this?

        • Tom S. says:

          It’s ridiculous because it came from con-man Dave Ramsey. Who is paying cash for a first car? You need a car to go to work. It’s not like you get paid for living in your parents basement.

        • Augustus Frost says:

          Why does this principle only apply to a first car?

          Presumably, there are many people that won’t be able to do it. It doesn’t change that of those who do, many or most won’t be able to build significantly more net worth by paying substantially more than necessary for a depreciating “asset”. That I presume is supposed to be the primary point.

        • Peanut Gallery says:

          Well, prior to 2020 the idea to pay cash for a car versus debt financing it implicitly means you should buy a cheaper car more in line with what you can actually afford.

          So that means (again in pre covid valuations) instead of buying a 35K car on debt, why not just buy a used but fairly reliable car at 7-8K?

          Cmon folks, let’s think this through a little more carefully.

        • ElbowWilham says:

          I paid cash for my first car. In 1994, I paid $700 for an ’81 ford fairmont with rusted out floor boards. Hey, it got me to work and back and the heater worked in the Midwest winters. Worst was I had to run the heater in the summer otherwise it would overheat.

        • Shiloh1 says:

          Everyone I knew paid cash for their first car – in the 1970s.

      • Cookdoggie says:

        “Don’t dump more than 50% of car’s value into a repair.“

        This rule of thumb is suspect. I have a 95 Toyota Tacoma, 5 speed manual 275k miles. I’ll gladly pay more on a repair to avoid spending a lot more to buy another vehicle. And if you own a slightly used vehicle paying more than even 10% of its value could be a bad idea. You have to consider why it needs repair. Is it a potential lemon or are you replacing a part at the end of its expected service life, etc.

  4. Peanut Gallery says:

    After talking to some in the auto finance industry, apparently the sentiment is still very much the “roaring 20s”. They are still getting paid and cash flow is good – it’s just that their business model got flipped on its head. Went from low margin high volume to ….. high margin low volume.

    Franchise laws in all of the US states need to go away and stop feeding these useless parasites on the US economy. Like seriously, why in the world does a dealership finance manager need to make 6 figures? Just do away with the dealership/franchise model. Is now not the best moment in history to do away with that terrible obsolete arrangement and just buy directly from manufacturers?

    • El Katz says:

      Probably because the manufacturers don’t want to deal with the buying public. If you’ve ever sat in on CR calls or listened to people who think that “lifetime fluid” actually means lifetime – as in no need to ever check it – you’d know why.

      Then there’s the laws of the individual states…. who’s going to keep up with all that nonsense? Tax collection, licensing, etc., etc.,

      Then there’s the “what to do with the used car” dilemma. A Toyota factory store wouldn’t want your Ford. They don’t have the service techs, parts, access to TSB’s, nor training to fix it. Manufacturers protect their IP and wouldn’t “share”. So, the “factory store” would dump it at auction…. And who, pray tell, is going to buy it if you have no dealers? Open the auction to the public? Have you ever been to an auction? They’re as is / as shown. No new tires. No safety checks. No reconditioning. No nothing.

      Lastly, I do believe that the original auto sales regime began with factory stores, which then added distributors for logistics reasons, which then required independent outlets to properly serve large markets due to cost of developing dealership sites (service, parts, sales, vehicle storage). Toyota still has one distributor – Southeast Toyota aka JM Family Enterprises – and they have independent dealerships.

      There may have been issues with anti-trust behavior (price fixing or surrendering segments to one manufacturer), price gouging (no competition = no reason to discount), the debacle of trying to run multiple retail outlets – incentivize sales people vs. those who get paid regardless as volume feeds factories, HR issues, site selection, capital investment (a reasonably sized dealership costs in the range of $11M to bring online, exclusive of operating capital)….

      Lots of reason. The only reason Tesla can get away with it is that they have next to no volume and the bulk of their sales are concentrated in metropolitan areas.

      • Apple says:

        Times have changed. A lot of people are comfortable buying new automobiles over the internet. Especially if they could save thousands of dollars and not have to deal with sleazy cars salesmen.

        • El Katz says:

          @Apple:

          You missed the point. Without the dealer, there is no infrastructure to deliver, service, provide spare parts, store, etc., your car. Amazon can’t fit them in their trucks and mobile service is inefficient.

          Manufacturers wouldn’t be able to muster the capital to purchase land, develop it, build the building, staff the building, purchase equipment (price an alignment rack lately?), etc..

          There is already a move to reduce the size of the footprint of auto dealerships in looking towards the future. They’re not as dumb as you think.

          As far as buying a car on the internet, there’s a certain company who has the “car vending machines” that’s running into problems with state DMV’s by selling cars that they don’t have titles to. That creates a situation for the customer who can’t register his car, can’t pay for the car if it’s financed (the title has to be sent/available for the lienholder to perfect their lien), the state who can’t collect taxes. This particular company may lose their license to operate in a few states as a result. Who do you go see in those situations when their corporate office is in PHX and there is no local representation? A lawyer. There’s a few other online purveyors that are in similar stead.

        • Sams says:

          El Katz, you must explain one thing, what is the problem with the title to the car and state DMV’s?

          All new cars have a WIN that is the cars identity. At the sale the seller, if a retailer, registrates the car on the customer at the governmental car register that after all taxes and fees are paid provides the new owner with a registration document and license plates.

          At the moment the retailer registrates the car, they will notify the bank/finance company if not sold by cash. The lienholder will then registrate the lien in the governmental register of liens in cars and other movables before they pay the seller and the retailer hand the car to the buyer.

          Mostly this work seamless and there is no need to visit the salesman’s office. Can and is done on the internet with the car handed out by some representative of the retailer.

          If the car manufacturer do not have their own service network, they have contracted this out to an independent car service chain.

          Anyway, the car owner can go to any independent garage to have their car serviced. With full factory warranty as long as the service is provided to the manufacturer’s standard.

      • Sams says:

        Then, why are there manufacturer owned retail in other markets?
        The arrangements vary from direct manufacturer owned to different form of franchise, less or more tightly controlled by the car manufacturer.

        The flip side, where manufacturers are into retail sales, the law states that information necessary for service should be available to all garages authorized by DOT to perform work on cars.

        Selling different make secondhanded cars do not look to be a problem. It is more like new car dealership will only sell rather new secondhand cars. Older cars are passed on to other dealerships that do only seconhand cars.

        • El Katz says:

          You have unreasonable expectations as to how to move the used vehicles. Do you honestly think that Brand A will properly appraise a Brand B car? Do you think Brand B will accept the vehicle at the price Brand A put on it? Unlikely. What if the customer agreed to a price on his new Brand Amobile but Brand B wouldn’t pay that for it? Odds are it would run up against anti-trust anyhoo.

          The other issue is that “in other markets”, people aren’t as impatient as Americans. Americans want their new car NOW, not 6 months from now when the manufacturer can deliver a built-to-order product. There is a large percentage of U.S. auto sales that are “spot deliveries” – where the trade is accepted, contracts issued, and the car delivered in the same day.

          America is a car-centric culture… unless you live in a city (which I don’t), you pretty much need a motor vehicle. I don’t think I could ride my bike the 13 miles each way to haul groceries home… too far to haul a wagon…. grocery stores don’t deliver out here as it’s too inefficient for their business model. Uber doesn’t serve this area – private car services do (not taxis as there aren’t any) but they charge $60 to haul you each way into town.

          Besides, my beer would get warm….

        • Sams says:

          Well, we do have very different observation points. :)

          What I see is that brand name retailer, brand name different brand and independent car dealer value a secondhand car very much the same. They all aim for the same mark up at resale and the market price is pretty well known to everyone, customer included if they have a look around.

          The car salesman probably has not much brand loyalty, to the salesman a sale is sale and he count the money.

          The impatience in USA I see, but that just necessitates cars in storage. If not recent economic development force people in the USA to learn patience. At least when buying a new car.

          Around here, the culture is quite car centric too and quite a few gladly wait 6 months to get their car to exact their specification. ;)

      • Larry says:

        I would agree that Tesla’s volume is one reason. The other is the marketing and cache around the brand. It has been the cool, futuristic kid. The promise of something new and wiz bang. As Telsa aspires to gain larger market share, it might realize that a dealer network is indeed a very, very good thing. If I own a car from almost any automaker I can take it to any number of independent shops or authorized dealers for service. If I have a Tesla and have a problem, well, I can’t take it to any independent shops. And how many service centers are there in MA? Four. Only four. Realistically I can probably only take it to one for convenience sake. And just like the fabled German automakers who overengineer their vehicles, a lot goes wrong with Teslas. Take a look at this account from an early adopter who lives in Western, MA and tell me Tesla doesn’t have a big, big problem on it’s hands.

        • Truth says:

          Thank You Larry : )
          Teslas. Take a look at this account from an early adopter who lives in Western, MA and tell me Tesla doesn’t have a big, big problem on its hands.

          Now I know I certinaly don’t want one

          I was thinking about getting one not now :
          As well, from what I am reading online, they cost more to operate and keep up than a Gasoline Car .
          As well, I keep seeing Forecasts of Higher Electric costs from Very happy Utility Companys
          Now thanks to ” No Law enforcement ” with insider trading running rampant with all political parties involved as it seems I see nothing on the horizon except more Inflation triggered by Caspolitistic greed.
          It seems that Insider Trading is now Legal as it does not stop with no one held accountable
          So to worry about the Environment , air quality and such becomes well behind simply staying alive and with food to eat . The HUGE Increase of Homeless living on the streets and Covad running Rampant ,
          places Modern Day Life well behind the history we once had.
          Manufacturing was lost in part when Japan brought cars to the USA . Far better Cars than USA Cars as they developed fast . Then China joined in Ect .. America struggles to stay afloat with Insider Trading running things now . Greed is running the country perhaps now . Do people really think those who became Rich by controlling the economy are going to stop ? Dream On and don’t hold your breath . One Year of Inflation will take 10 Years to undo & balance out .

        • El Katz says:

          Re: Tesla. Look at the follies of Rich Rebuilds with salvage Teslas. Tesla won’t let a rebuilt title vehicle use their superchargers. Spare parts are virtually unavailable.

          IMHO, Tesla is a technology company that happens to put their tech in movable objects – not an automobile manufacturer. They build cars in tents….

  5. NJB says:

    Volume down but prices up. It should be a wash. Yet the total market cap of car manufacturers has increased by around 3 times since 2017. Something has to give.

    • Dale says:

      Lower volume, much higher unit price. That’s exactly

      It is also certain doom. See “The innovator’s dilemma”. But the looters known as Apple and GM management have no care at all for future viability.

    • andy says:

      Tesla is 1.2 Trillion dollars.

      • NJB says:

        Yep. I think the most likely thing to “give” is Tesla’s market cap. It’s responsible for a large chunk of the market cap growth.

  6. Depth Charge says:

    I was shopping for a new vehicle the last couple years. I’m out. I have no interest anymore. I think I can make my current vehicles last the rest of my life.

    I want no part of this insanity anymore, especially since buried in 6uild 6ack 6etter is a requirement for kill switches on all new vehicles by 2026, so the totalitarian dicktators – both parties – can control your every move. We are now living in a full-on police state.

    • Throop says:

      I’m with you there. Have 2 cars that I do all the work on. I think I can get them to last another 20 years. Biggest fear is crashing them.

      • MiTurn says:

        Throop, I’m with you! Another issue with 20+ year-old cars is getting parts.

        But I’m always in the market. I anticipate a glut of used cars at reasonable prices in a year or so, maybe sooner.

        • Flea says:

          Cuba has them running 60 years later no computer chips hum

        • IanCad says:

          Then watch out for the Fed introducing another “Cash for Clunkers” market distortion.

      • DR DOOM says:

        Okay, I am,trotting out my 2002 rust bucket 4×4 Silverado with 300k+ miles on it story. Bonus time coming. I got another engine,complete, no short block for this boomer cheapskate. I have a manual tranny replacement also sitting on a pallet in the barn. I will need that tranny. The manual gearbox on my 2002 sucks. I had to replace 2nd gear at 90k. Sounded like a siren when it loaded up the teeth. My wife can cremate in it if the law don’t stop her. I had a 1945 Willys Jeep in college. It had the original roll over at any speed option package and could go .000001 miles per hour in 4 wheel drive. You could walk behind it and grill a steak on the rear of it. What we called chicks 45 years ago thought it was, wait for it, Bitching. All the Boomer Haters thought I was going to say cool or groovy Hey, ain’t no hate crime hating a boomer, enjoy.

        • Harvey Mushman says:

          “Bitching” is what my wife does to me
          “Bitchen” is what a 1945 Willys Jeep is.

        • otis says:

          I broke my pelvis in half being thrown from one of those old jeeps on a farm at age 13. Center of gravity was too high for the narrow wheelbase. I still wear special shoes from that crash.

          Call me a masochist but I kinda like jeeps.

          Even had a lifted cj7 with a straight 6 for a while in college.

      • Brant Lee says:

        And we thought Cuba had it bad. I would rather be fixing up and driving those cars from the 50s rather than stuck with this junk we have today.

        • El Katz says:

          There was an entire series done on the cars of Cuba. Many of them have engines from boats, fork lifts, and whatever they can muster. Resourceful people but I wouldn’t want to get into an accident in one. They’re frankenmobiles.

    • Flea says:

      Buy a pre 1970 vechile will run forever until no gas

    • Pea Sea says:

      Lol. Jesus, calm down.

      • Peanut Gallery says:

        Pea Sea,

        Depth Charge is just getting more and more ridiculous. I think he is doing this all for show.

        I admit it is pretty amusing though. “6uild 6ack 6etter” was quite clever…

        • Depth Charge says:

          What I think is ridiculous are sheeple like you who think a police state is “normal.” Matt Taibbi, a well-known liberal, was talking recently about the shocking pivot that liberals did on the surveillance state.

          It used to be that conservatives were more amenable to the NSA spying and all that went along with it, while liberals were the ones pushing back and questioning this infringement upon civil liberties. Now they are doing the bidding of the CIA, the FBI, etc., and with the blessing of the oblivious like yourself.

          There is absolutely no good reason why an automobile – a durable good purchased with the hard-earned money of a free citizen – should be a spying machine for the government. Read about all that is included in this “kill switch” and get back to me. It’s horrifying, and government overreach in the worst possible way.

          There used to be laws against “illegal wiretapping.” Now the government thinks it’s their God given right to listen to you whenever the hell they want, and via your own personal property. Sorry, move to China if you want to accept that kind of gross overreach. I WILL NOT.

        • ivanislav says:

          No, DC is right and you are naive, an apologist for a system that is becoming increasingly out of control. We in the US have had it too good for too long and the dumb seem hell-bent on learning what tyranny means through personal experience.

        • RockyCreek says:

          I’m with Depth Charge on this. There is an insane amount of traffic cameras and license plate readers everywhere which violate our 5th and 6th Amendment rights. This regulatory “kill switch” mandate in the BBB which glided through “CONgress” and was signed by the president is a violation of our 4th Amendment right. An appropriations rider is needed immediately to kill the “kill switch”.

        • ivanislav says:

          Rocky Creek,

          Some people are clueless. I mentioned to a friend the license-plate readers at all major intersections and she was like “Oh, you mean red-light cameras?”. Utterly oblivious.

        • historicus says:

          Peanut

          Look at what has happened in the past few years
          Student loans …. controlled by govt
          Mortgages…..controlled by govt
          Healthcare system….in the process of being controlled by govt
          Education……in the process

          The Constitution was written to limit govt.
          Article I sect 8…..what the federal govt CAN do
          Article I sect 10….what the States can NOT do

          If we want to object to an expanded Federal Govt…like surveillance ….what of the Fed taxing us (promoting inflation)?
          That’s a Congressional power and may not be delegated.

        • otis says:

          @ Depth Charge
          Jan 6, 2022 at 7:09 pm

          The Left is the new Right.

        • Peanut Gallery says:

          OK people, calm down. I am actually in agreement (more or less) with everything you guys are saying about surveillance and government over-reach. Contrary to what you guys actually think I consider myself an extremely conservative person.

          I just meant to say that Depth Charge’s NARRATIVE WRITING STYLE has become ridiculous. Not his beliefs.

          Geez people, calm down. Society is just constantly in DEFCON1 ready to rip everyone a new one with every little comment related to government and politics. What is wrong with people

        • Depth Charge says:

          “Depth Charge’s NARRATIVE WRITING STYLE has become ridiculous.”

          Do you really want a homogenous world where everybody is the same, boring carbon copy of each other? People like myself add color to the world, and aren’t concerned with copying what the next guy is doing so as to fall in line and not stick out like a sore thumb.

        • nick kelly says:

          Maybe WR should start another site: Whinestreet.

          Why would you have an expectation of privacy at an intersection? Why is there a unique set of numbers/letters on your car at all? Answer: to identify the owner: you. So according to this completely bogus interpretation of your constitution your privacy is already invaded by the license plate. Shouldn’t you be able to drive anonymously?

          Now you can reply using your $500 computer with power that would have cost a million twenty years ago, some would say a successful product of capitalism.

          ( I had an early Apple 2. It had 32K, had one external drive and cost 3500, at the time the price of a new basic car)

        • Depth Charge says:

          “Why would you have an expectation of privacy at an intersection? Why is there a unique set of numbers/letters on your car at all? Answer: to identify the owner: you. So according to this completely bogus interpretation of your constitution your privacy is already invaded by the license plate. Shouldn’t you be able to drive anonymously?”

          This is what’s called a “strawman argument,” and it’s a last resort for people who are either intellectually lazy, or just plain stupid. You should have thought your reply through before you sent it, because it’s really, really dumb.

    • 91B20 1stCav (AUS) says:

      DC, et al-interesting additional sidebar on this sidebar (with more points of view) “Avoidable Contact #132” by Jack Beruth on Hagerty 1/5/22 (guessing you saw this article already, Wolf…).

      may we all find a better day.

    • Austrian school says:

      Depth Charge: You forgot to mention that for a long time, newer cars have a GPS system (in addition to I phones with GPS) whereby the government can and will track your every move. The new ones will now act as evidence against you if there is an accident. That is one reason why I drive a simple old car that the government can not track and is much easier to repair than the new ones with sensors and all the worthless electronics.

      • DR DOOM says:

        Some one who makes the statement that they have nothing to hide and do not care if the Gov’t spies are a threat to freedom and are an enemy of our constitutional republic. Who in the hell is breeding these fools.

        • perpetual perp says:

          OK, OK already. The NH House of representative passed legislation yesterday allowing anyone to come into the voting room itself. So much for the sanctuary of the vote. And we are also a free carry state so you can walk in armed and ask, innocently of course, who they planned to vote for. In NH libertarians have taken over the Republican Party. They hate the government and refuse to pay for its services. They are, in point of fact, authoritarians. They are freeloadfers and will be the first crew to attack their political opponents. You got a little taste of it last January 6, 2021. Sure blame the tree huggers.

        • 91B20 1stCav (AUS) says:

          DrD-ref Franklin’s quote on trading essential liberty for security.

          (The overriding irony these days is that many who seem to shout loudest for ‘liberty’ from many things also shout loudly that they also be made ‘secure’ from many things…).

          may we all find a better day.

      • Harvey Mushman says:

        Just wrap you car in tin foil, Lol!!!

    • otis says:

      In 2026 I’ll still be driving what will then be a 57 year old car. An EMP event would not kill my car.

      On that fine day when our inevitable 83 year old pooopy pants shuts down cars in an emergency pandemic decree to curtail genital warts, I will drive past all the EVs smoking a cigar blasting Big Pun

      • 91B20 1stCav (AUS) says:

        Otis-only if the gas stations disabled by the EMP can be brought back online (dunno, maybe the stations in your area retain ’20’s-’30’s era hand-crank pumps, but then the fuel deliveries would have to come from presumably non-EMP-hardened tanker rigs, and then…oh, never mind…).

        may we all find a better day.

  7. MiTurn says:

    “…legacy automakers took an additional beating from the arrival of newcomers…include notably Hyundai and Kia, Mitsubishi, and more recently, Tesla.”

    In spite of consolidation, maybe there are still too many manufacturers. And the slew of new EV manufacturers — real and projected — will only make the pie slices thinner.

  8. Anthony A. says:

    Two people I know had their old (over 10 years) pickups stolen a couple of weeks ago. No trace of them and police reports were filed. I guess the crooks are stealing older vehicles in good shape for possible resale across the Mexican border. Or they are stripping them out for parts.

    • El Katz says:

      There’s a big market for “square bodied” GM pickups. Pickups are easy to chop and “repurpose” with a VIN from a rotted out specimen.

      • otis says:

        C-10s, short body trucks, old blazers and cheyans are selling for bank right now.

        cant beat an old small block chevy

    • Swamp Creature says:

      They are stripping them for the parts and selling them to parts dealers in other countries. When I was in Guam this was a common practice. No one was ever prosecuted because all the parts could be cleaned up and sold with any traceabilty. In many cases the parts are more valuble in total than the original vehicle.

      • El Katz says:

        If you attempted to build an entire car out of a parts catalog, you’d see what a bargain an assembled car is. Years ago, we clowned around with this idea. Quit when the $20K-ish car hit $100K

        • 91B20 1stCav (AUS) says:

          ElK-cue the great Johnny Cash’s ‘I Got it One Piece at a Time’…

          may we all find a better day.

    • Depth Charge says:

      I built a kill switch into my highly valuable old truck. I tapped into the power wire to the fuel pump and when the kill switch is turned on, there is no fuel being delivered so the truck will crank and crank until the battery is dead, but never start. They would never be able figure it out, and just move on to the next vehicle.

      • Dan Romig says:

        Nice.

        Many years ago, I had a hidden toggle switch to the MSD ignition on my 280 Z. It worked on the one time it was needed!

        • Seneca’s Cliff says:

          Most of the guys I know with older Toyota Pickups are talking about putting in Kill Switches like the one you describe. The recent ones that have been stolen here in PDX get the valuables and Catalytic converter stripped out then they are abandoned in one of the homeless camps when they run out of gas.

        • otis says:

          I had a kill switch under the tank on my 1985 RZ350, but it was for the tail light in case I was being chased.

        • rick m says:

          My ’98 tacoma prerunner is in the backyard to keep buy-it notes off, now they look over the fence. Those models have two piece ignition switches that can be turned with a big screwdriver after they jam up in regular use, anything will start mine now.car thieves use wreckers anyway. Neither vehicle gets parked anywhere risky anymore. And locks are for honest people, the others know who they are.

      • Douglas James says:

        Here in The Peoples Republic of Orygun, the regional oligarks released rental-on-demand BMW fleets in downtown. They may be in other markets too. Using an app, you approach any parked [graphics applied so no mistaking] sedan, activate the app, scan the unit, and the locked vehicle unlocks via satellite signal via remote operators and cc billing, ins. etc. It starts at some point, you use it much as any uber, then ‘abandon it.’ The cycle repeats, awaiting ‘demand.’

      • historicus says:

        Or, you could put a Steering wheel bar on….
        they see it and usually dont have the equipment or the time to mess with it.
        The catalytic converter is the thing that is tough to defend against.

        • Blaster says:

          How about an igniter switch on the Catalytic Converter
          When they pull it off it blows up in their face

      • elysianfield says:

        DC,
        Back in the early 70’s, I acquired an older Holmes tow truck. Did the same thing with the kill switch. Stolen three days later and I found it abandoned about five blocks from the house.

        Oh, did I mention that this was in Oakland California

  9. Brian pawlak says:

    Selling my fine used car for more than I paid for it 2 years ago, really? 70 thousand dollar pick-ups, 70 thousand $ Jeeps, Broncos. Problematic electric cars, no thanks. Bring back my Dodge Scamp, 3200 hundred bucks out the door. We are over the abyss.

    • Dan Romig says:

      Naked. Hypernaked.

      Sixty-five degree V4 engine. 209 kg fueled up & ready to ride. Fully loaded with the most state-of-the-art electronics and active suspension front & rear. Eight seconds to get to 200 kph from a stop. Incredibly fast to stop from 200 kph, and under control in doing so.

      New: $19.5k plus tax and license.

      We are not over the abyss. We have options.

  10. historicus says:

    Big prices…no money down….no payments for how many years?

    Recall the car payment delinquencies from a few years ago?

    Skew interest rates….and everything will be skewed. This is just more of the inverted world we live in.

  11. SpencerG says:

    I am pretty sure that Ford and GM are pretty happy with this. They have been wanting to get out of the “little car” business for quite a while. There just isn’t enough profit in it. Selling pickup trucks and Armored Personnel Carrier sized SUVs is a much better business model for them. Probably a better clientele as well… older, more money, knows to keep the oil and brakes in good shape.

    • RockHard says:

      I was going to comment that Hyundai/Kia are the only car companies that make a relatively affordable car these days. Wolf’s mentioned it many times: US auto manufacturers don’t build sedans because the margins are in the big vehicles.

      You lost me here though:

      > older, more money, knows to keep the oil and brakes in good shape.

      I don’t see how these have any relationship. People spending 70 grand on a car aren’t out there with the thing up on blocks changing the oil.

      • SpencerG says:

        No… but they also aren’t shortchanging trips to the Oil Change place to save a few bucks.

    • nick kelly says:

      They were driven from the biz. Remember Saturn. GM just imports from SK and calls them by old names: Pontic Wave, Chev Spark, latter apparently is not bad. Ford is better, but back out trucks ( 25 % tariff on imports) and there isn’t much left of the Big Three.

      As for Hyundai Kia being only small car, Honda Fit and Nissan Micra or Versa are well priced. Just in MO don’t touch CVT trans.

      Anecdote: while back lady of hse buys newer car. Mazda and I am tasked with selling her 2004 Dodge something. She only wants 500 so to save time I treck to a used lot and make my pitch. Boss says ‘those are terrible cars. I’ve has so many PO’d buyers get mad. If it was a Toyo I’d give ya 1200. I’m taking this lot import only. No more (of whatever I had) and no more PT Cruiser.’

  12. Seneca's Cliff says:

    I think this is how motoring for the masses dies. I used to think it would happen one day when no-one could afford gas. Now it looks like the cost of owning a car which just keep creeping up until they are just toys for the rich in the early 1900’s. I know that the way most people live makes car ownership crucial. But the universe has never cared about what we think we need. We only get what we can afford in the long run.

  13. Wisoot says:

    VW will need an indepth analysis Wolf when they publish. Dig deep. Thanks for article.

  14. LordSunbeamTheThird says:

    Not so long ago 2009 that the US had a car scappage program CARS (Car Allowance Rebate System..) 3 billion bucks, 20% of which went to Toyota.
    UK had one as well “Cash for Clunkers” which because of the age requirements sadly sucked in a lot of the classics (original minis etc). How things change.

    https://en.wikipedia.org/wiki/Scrappage_program#United_States

    • El Katz says:

      Having been involved with the administration of Cash For Clunkers in the U.S., I can assure you that the entire program was rife with fraud. Another stupid government program that looked good on paper but, in the wild, was a license to steal for those that chose to do so.

      The program also harmed the lower income families as it took viable, inexpensive vehicles off the road and forced them to either buy more than they could afford or do without.

      At one time, my job duties involved overseeing the scrapping of rail damaged vehicles for a major distributor. The engines were to be destroyed (blocks broken), transmission cases were to be destroyed, electronics destroyed (EFI’s and the like), and the remaining intact bodies crushed in a shredder. Went as planned unless I left the yard. Tried hiring guards, but they took bribes…. Greed conquers all (and this was in the early 80’s).

      • 91B20 1stCav (AUS) says:

        ElK-would love to see a ‘Greed Index’ chart from Wolf, but, nevermind-i have the feeling it would always be a flat line on the high end of the graph…

        may we all find a better day.

  15. Island Teal says:

    Depth Charge 👍👍👍

  16. Prophet says:

    If you take the chart of Ford’s US Vehicle Sales and flip it about an imaginary horizontal axis, you get a chart Ford’s stock price.

    • ivanislav says:

      Yes, but look at net income – declining linearly for a decade with a few minor wiggles here and there against 200B in liabilities including 100B in debt.

      • Prophet says:

        Pay no attention to past or current funny-mentals (fundamentals), ivanislav. The long-term trend is UP and that is all I need to know!

    • Nathan Dumbrowski says:

      Exactly. Something is so fundamentally wrong with this and the other car makers stock prices. F stock up 169% over the last year. Ridiculous with a capital F

      • SocalJim says:

        That is because the analysts are pencilling in Ford getting big chunks of sweeteners in Build Back Better from EVs.

        Furthermore, the current administration is not hammering them about low cost foreign plants.

        • El Katz says:

          Ford is pulling a Musk – showing vehicles they “coulda shoulda oughta” someday build or trickling out products like the Bronco and Lightning. The marks are lining up as they don’t wanna miss the “to the moon” shot.

  17. Nathan Dumbrowski says:

    The first edition of the Chevy Silverado EV sold out in 12 minutes. Deliveries of the $105,000 electric pickup are expected to start in fall 2023

    I think this vehicle is an abomination. Where oh where are people getting the money to pay six figures for a truck?!?

    • Anthony says:

      From poor old Joe, of course

    • random guy 62 says:

      IMO they designed that thing in response to the Rivian R1T and Tesla Cybertruck, while I was hoping for something more like the F-150 lightning.

      The Avalanche kind of… sucked, so why make an electric one?

      GM’s target market seems to be the “outdoorsy” Californian who has more money (or access to credit) than brains, much like Rivian and Tesla.

  18. Tom H says:

    Enjoying the car talk here… better chime in.

    I have 2 pickups- a 2008 two wheel drive F150 XL manual with only 40k miles on it and a 2022 F350 4×4 super cab with 8 foot box. Guess which one is easier to drive. (the 150) I’m teaching my son to drive the manual so he won’t as easily text and drive.

    I wish they still put manuals in pickups. The 10 speed in the 6.2L F350 is a clunky beast, gets around 12mpg. Since I live in farm country and own land I can justify it. Also in a head on collision the survival odds might be a little higher.

    I’m tempted to sell the big truck, might even be able to make a little profit… custom ordered it in May, received in November.

  19. Sams says:

    Well, less cars produced, less consumed, less polluted and that is good for the environment.

    Probably a good example of how something is good for the environment, but not that good to the economy as the system is rigged.

    • historicus says:

      What’s a 7 year old TSLA worth, and what to do with all those depleted batteries?

      • Anthony A. says:

        Those lithium batteries burn real well. Not much left after the day long fire.

        • Wolf Richter says:

          Gasoline burns really well too. Not much left of the car after 15 gallons of gasoline ignite. Over 200 people die each year in ICE vehicle fires in the US. A car is a dangerous thing.

        • historicus says:

          Imagine that I 95 backup with all electric cars.

          Or a hurricane evacuation with, let’s say leaving southern FL.
          How do they recharge all at once say around Jacksonville?

  20. breamrod says:

    an interesting note. sold my 2009 Toyota pickup and bought a 2018 BMW. Called the insurance company to change and the girl said I was one of the few people that she had talked to that was trading up. She said she had seen a lot of folks selling their newer models and buying older models. Sign of impending recession?

    • Wolf Richter says:

      But someone must be buying the newer models that those folks sell, and someone must be buying the new models being sold. There must be a buyer for every seller. Maybe those buyers use a different insurance company?

  21. Michael Engel says:

    1) Ford sold 19,000 Mach E in 2021, second to Tesla, less than half of Mustang, hit the brakes since Aug 2021.
    2) Sony entered the EV market with cars that look like Tesla, loaded with music & electronics.
    3) The trend is up. Under the banners of $46,000/car, EV and self driving cars, GM & Ford are riding to the cliff, enabling Toyota, Hyundai- Kia and Mitsubishi to take over.
    4) Allocating capital to Hammers Lyriq and Silverado EV is equivalent to
    building muscle cars in the 1970’s.
    5) China best selling car is SAIC-GM mini EV for $4,500. Mary Barra smile is so charming.
    6) Ilan win space, risking China.

    • Anthony A. says:

      Sony has not built a car yet…..just a picture with a description.

      • Michael Engel says:

        Sony might shock the market with a silver battery, 500 miles range,
        good for 1,000 charges, or 500,000 miles. No info about their
        battery.

  22. Michael Engel says:

    Tesla Model 3 for $54K, order now, $250 due today, delivery in
    March 2023.
    Silverado EV RST for $105,000, sold out in 12 min. early delivery during the next recession.

    • Peanut Gallery says:

      Only $250 is required down for a deposit?

      Depending on how one looks at it, that is sort of a cheap option price to lock in that price, if you are bullish on vehicle prices for the next year.

  23. Marc D. says:

    That average transaction price in December of $45,743 is crazy. I’ve never paid anywhere close to that for a car.

  24. RockyCreek says:

    AutoZone, Inc. (AZO) is at $2,023.84 per share.

    • Marc D. says:

      Should’ve bought some of that a few years ago. They’re probably doing really well, with all the older cars still on the road.

  25. John says:

    2013 pony mustang not even 75k miles, almost though. Loaded. Well taken care of. Gotta be out in front to see the road though. Ford seems to have marketed their stock well. Holding Rivian, they still don’t pay though. Selling fewer cars and trucks and the stock is up? Reminds me of a tech stock.

  26. Michael Engel says:

    1) China zero tolerance and 10 million Omi daily cases globally will slow
    car sales, ease shortages pain.
    2) Help wanted, Macy’s cut two hours starting in Jan, because they can’t find qualified workers. Retail jobs are falling month after month. The gov cont to trim labor.
    3) Restaurants were sold out in Xmas, but now it’s Jan. 31 degrees in Dallas, but MCD and Burger King empty restaurants might serve PFE boosters.
    4) There are more used pickup trucks for sale in dealers lot.
    5) the trend is up, Biden on tv every day.

  27. John says:

    Wolf
    State of Maine Ford dealers are listing cars 10k over prices!, compared to New Hampshire. I could not believe it. No sales tax in New Hampshire, Maines 5.5 percent. Too much government in Maine. Hikes tolls right before getting billions (over two) for roads. Hiked cigarettes taxes, and then talked about returning money to taxpayers. A wtf!

  28. Swamp Creature says:

    Wolf,

    I was going through an article you posted in 2018 regarding Tariff issues on imported cars and the fact that Buick and Volvo were now manufacturing some lines in China. Also, you mentioned that many components of today’s vehicles manufactured in the US are composed of parts manufactured in China. I’m curious if you have any examples of components which you were referring to.

    • Wolf Richter says:

      The starter on our car. Happy?

      No seriously, this is an entire industry that moved to China, much of it after the financial crisis when a very large number of them filed for bankruptcy in the US, shut down most of their US plants, and reopened in China, including design centers, as part of the bankruptcy reorganization. Here is a partial list through 2009 of bankruptcy filings by auto component makers (the number continued to grow through 2011:

      https://burbageweddell.com/2010/01/09/27-automotive-supplier-chapter-11s/

  29. Swamp Creature says:

    Wow! What a list. Didn’t know all that.

    “Beyond the Hysteria about Auto Tariffmageddon” is one of the most interesting posts I have ever read. Gets into the weeds about what has happened to our manufacturing base. The short answer is we don’t have any manufacturing base anymore. What we do have is a bunch of nurds sitting in their parent’s basement trading in bitcoin. America is lost.

  30. Cookdoggie says:

    I understand Nissan’s decline. I own a 2013 Altima. The notorious CVT transmission is pure crap. Driving around town around 30mph, just barely on the gas, if the RPM gets down around 1000 the transmission will violently shudder as the computer can’t figure out what gear to be in. Putting the car into manual shift mode keeps the RPM high enough to avoid that.

    This year I noticed the headlights are really dim driving at night. Looked at the headlight assembly and the internal bulb cover is clouded over. Went online and discovered there’s a class action lawsuit on it. The heat is so intense the protective seal broke down.

    This is the kind of crap that made me swear off US cars in the 90’s. Only cars left I trust are Toyota and BMW.

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