ECON What long term effect on drop in auto production
- Thread starter Troke
- Start date
I think the effect will last as long as the average age that an auto is junked. That could be 20 years. In other words, until the majority of the autos produced this year are junked, there will be an effect. Assuming of course they get back to full production next year.
ohiohippie
Veteran Member
My dad worked at the General Motors Plant in Cleveland until he passed in ‘94.
He used to say whichever way the Big 3 were going the country was following.
He’d be rolling in his grave if he knew what has happened to the Big 3 and his beloved country.
*sigh
He used to say whichever way the Big 3 were going the country was following.
He’d be rolling in his grave if he knew what has happened to the Big 3 and his beloved country.
*sigh
bassaholic
Veteran Member
They want electric vehicles to take over. Driver-less ones. Most folks, the lower to mid level classes will be required to use them for transportation.
Impact downstream.
I read many years ago about an auto manufacturer that started a plant in Tennessee if I remember correctly. There was a 10% growth rate in the area for 10 years straight. Compounded mind you.
First the plant was built. Other smaller plants were built to support this larger plant. Then small communities started to develop in surrounding areas because they needed places for all the new employees of the larger plant plus the smaller companies that were now forming to support this larger plant. Then they needed places to shop and eat and fuel cars and live and all of the other things in life like mechanics electricians plumbers. The list goes on.
I think you get the point by now. Auto industries drive local economies way beyond normal flow of money. Take that out of the picture and the future does not look good for any of us but in those areas you are going to start seeing Detroit syndrome all over this country. Not a good day at all.
Basically Ghost Towns.
I read many years ago about an auto manufacturer that started a plant in Tennessee if I remember correctly. There was a 10% growth rate in the area for 10 years straight. Compounded mind you.
First the plant was built. Other smaller plants were built to support this larger plant. Then small communities started to develop in surrounding areas because they needed places for all the new employees of the larger plant plus the smaller companies that were now forming to support this larger plant. Then they needed places to shop and eat and fuel cars and live and all of the other things in life like mechanics electricians plumbers. The list goes on.
I think you get the point by now. Auto industries drive local economies way beyond normal flow of money. Take that out of the picture and the future does not look good for any of us but in those areas you are going to start seeing Detroit syndrome all over this country. Not a good day at all.
Basically Ghost Towns.
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LYKURGOS
No Surrender, No Defeat!
If you haven’t seen the impact you must not be looking very hard. Our used car prices are up over 45%. Imagine if someone hits your car, they have no insurance and you have nothing but liability because you paid the car off. To replace that 2017 smallish car will cost you $4000 more than it would have last year.
The number of new vehicles on the lots in 2019 was 3.9 million units the number of new cars sitting on the lots this August is 900,000.
Enterprise is the largest buyer of new cars in the US. Last Labor Day (2020) they sold down their fleet as they always do. When they went to add back in March there were no new units, so they had to fill from the auctions. The price for a midsize sedan rental, ranged from $45-58 per day in OkC last year. This year the rate is $90 without taxes.
I have hundreds of personal examples of people selling one and two year old cars back to dealers and making thousands of dollars over the original purchase price
Repair parts in the powertrain arena have no ETA on delivery
A large salvage yard in our region, annually spends $3million on inventory has spent $1 million a month for the last 6 months getting it while he can
How many plants are shut down with employees fired? Thousands!
The number of new vehicles on the lots in 2019 was 3.9 million units the number of new cars sitting on the lots this August is 900,000.
Enterprise is the largest buyer of new cars in the US. Last Labor Day (2020) they sold down their fleet as they always do. When they went to add back in March there were no new units, so they had to fill from the auctions. The price for a midsize sedan rental, ranged from $45-58 per day in OkC last year. This year the rate is $90 without taxes.
I have hundreds of personal examples of people selling one and two year old cars back to dealers and making thousands of dollars over the original purchase price
Repair parts in the powertrain arena have no ETA on delivery
A large salvage yard in our region, annually spends $3million on inventory has spent $1 million a month for the last 6 months getting it while he can
How many plants are shut down with employees fired? Thousands!
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naegling62
Veteran Member
To give you and idea about the situation. Car dealerships will put new cars in malls for advertising sales. The other day I went to the mall and they had used cars displayed.
Gimpywarrior
Contributing Member
This is the plan. No cars means lower carbon footprint and the commies in congress get their wish.
In my opinion, a replacement parts shortage would be a bigger problem. We can easily manage a year of reduced new car production if we can keep the ones already in our garages running.
But, the market will out. If there's money/demand, production will eventually rise. Means higher consumer prices of course, but that's something that's coming at us from all angles anyway.
But, the market will out. If there's money/demand, production will eventually rise. Means higher consumer prices of course, but that's something that's coming at us from all angles anyway.
et2
Has No Life - Lives on TB
There’s practically zero infrastuture to support them. From electrical grid, rare earth minerals ( controlled by China), parts, computer chip capacity, battery disposal, etc. Just the mining of the materials for the batteries alone is the biggest issue. We don’t do much of it here in the US, think China. It would take us decades to build the mining capacity back up, and the filthy dirty processing goes against everything green these morons are trying to achieve.
China will not allow us to win this.
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Jeff B.
Don’t let the Piss Ants get you down…
Great point. I was talking with our Financial Advisor the other day and this came up. Over the years, the auto industry has been used to jump start the economy. Now the auto industry is essentially flat on its back, not due to lack of demand, but chip supply.
Which should make any thinking person contemplate the actual state of our economy, which I’d describe as on life support or a zombie economy. It keeps going, not realizing that’s its brain has died.
I count myself fortunate that I got a new truck a couple of years ago. I keep them for a long time, so I’m good (barring any surprises) for a long time. We were, however starting to think about a newer car for HQ6, as hers is a 2011. Well, that’s on the deferred action list for now, I’m glad hers is in the shape it’s in. She can continue using it into the indefinite future.
What about the folks that find themselves in need of a car “right now”? As I see it, they’re left to scrounge for the scraps that come available and have to pay too dollar.
Once (if ?) chips start flowing and the auto lines start running, they’ll make loans available to anyone with a pulse, which will set us up for another ”crisis” as scads won’t be able to pay for their nice, new cars.
Jeff B.
Which should make any thinking person contemplate the actual state of our economy, which I’d describe as on life support or a zombie economy. It keeps going, not realizing that’s its brain has died.
I count myself fortunate that I got a new truck a couple of years ago. I keep them for a long time, so I’m good (barring any surprises) for a long time. We were, however starting to think about a newer car for HQ6, as hers is a 2011. Well, that’s on the deferred action list for now, I’m glad hers is in the shape it’s in. She can continue using it into the indefinite future.
What about the folks that find themselves in need of a car “right now”? As I see it, they’re left to scrounge for the scraps that come available and have to pay too dollar.
Once (if ?) chips start flowing and the auto lines start running, they’ll make loans available to anyone with a pulse, which will set us up for another ”crisis” as scads won’t be able to pay for their nice, new cars.
Jeff B.
LYKURGOS
No Surrender, No Defeat!
3 years of drastically less production on a typically 7 year depreciated item means we will have this shortage,(if we can get fuel) for 7 -10 years with over production. To produce even 10% over production is huge numbers
For decades we have seen a 40-50% of collision vehicles being exported and once they leave they never come back. I’m bidding daily against Honduras Mexico Saudi Turkey Azerbaijan etc. These countries are dumping dollars and buying up our used wrecked vehicles as well as other commodities
For decades we have seen a 40-50% of collision vehicles being exported and once they leave they never come back. I’m bidding daily against Honduras Mexico Saudi Turkey Azerbaijan etc. These countries are dumping dollars and buying up our used wrecked vehicles as well as other commodities
SquonkHunter
Geezer (ret.)
With every day that passes I am so glad I (finally!) bought a new truck last year. I had been putting it off for several years and made the purchase during the COVID-induced crash in sales last May. Got a good price and the dealer was so glad to make a sale - the place was a ghost town.
I was talking 5-10 yrs, not next week. And as several have noted, we might be stuck with it permanently as things are usually measured.
LYKURGOS
No Surrender, No Defeat!
Yes for all things considered this is permanent. With currency issues supporting car price inflation. The upper limit price of cars is only dictated by financing and money in hand. A good friend of mine has placed an order to Peterbuilt for 50 units. They gave him a 2.5 year delivery schedule He would take them all right now but can’t get them
Permanent? I well remember the slump during the Ford/Carter years. That's when a lot of us were getting our start in adult life. This recent "thing" is reminding me more and more of those times. We survived. Just fine, actually. This worldwide "Covid Economy" bullcrap is self-imposed. I do feel for the Brits, Irish and Scots, because they have a double-dose of disruption with the Brexit timing, but they too will adapt and overcome.
If you are frugal, skilled and not afraid of work, you'll probably come out on top. There's no guarantees in life - but living in fear of doom and the worst case scenario will get you nothing but a spot on a shrink's couch, or a rope from the barn rafters.
If you are frugal, skilled and not afraid of work, you'll probably come out on top. There's no guarantees in life - but living in fear of doom and the worst case scenario will get you nothing but a spot on a shrink's couch, or a rope from the barn rafters.
Blacknarwhal
Let's Go Brandon!
Oh, I know. Drove past some kind of Italian circus setting up in the parking lot at the mall nearest me the other day.
Kayak
Adrenaline Junkie
Oldest daughter bought her first new car back in April. A Honda. It's been in the shop five times, but the lemon law doesn't help because there are no cars to replace it with. Hers is a sport model and those have been sold out for a while, and there are none in the pipeline to be made. This last time it was towed in for service, they told her they were fighting with another dealership for a part that a different dealership had. If they could get it, they'd have her car for her in a week, if not, they said it could be months before they could get the part to fix it. Thankfully, they got it, and she has her car back. Don't know how long she'll have it back this time.
My heart breaks for her.
TL : DR -- don't buy a Honda.
My heart breaks for her.
TL : DR -- don't buy a Honda.
Italian circus, huh? Must've been a Fiat dealer?
Blacknarwhal
Let's Go Brandon!
Italian circus, huh? Must've been a Fiat dealer?
No, an actual Italian circus. Though for all I know there might have been used cars in one of those tents.
SmithJ
Veteran Member
I have read (don't have the article handy) that dealers and manufacturers are making plans for when the chip shortage abates to not go back to the old way of doing business - ie. less/no dealer incentives, a lot less inventory on the dealer lots and more focus on restricting pricing to MSRP. In other words, there's no going back.
Exactly! All them little cars, spewin' all them little guys named Tony in clown suits an' wavin' wrenches around... as long as the circus lighting wasn't Lucas-wired...No, an actual Italian circus. Though for all I know there might have been used cars in one of those tents.
Troke honest to god I think your deaf and dumb sometimes. Pop your head up and take a look around. This post here should clue you in.
SquonkHunter
Geezer (ret.)
We survived those times ('70s) but we only recovered and grew because we had Reagan in the '80s. Without his push for deregulation and fighting inflation we would have continued on that downward spiral. Now that Xiden is undoing everything good Trump did, times are looking more and more like the late '70s again.
intothatgoodnight
. . .
Bear in mind that the economic tone of the 1970s was first struck in 1971, when Nixon took the U.S. dollar off of a gold-backed standard.
Shortly thereafter, the 1973 Arab oil embargo gripped CONUS - and the rest is history.
intothegoodnight
Sleeping Cobra
TB Fanatic
They don't want you to drive but want everyone to take mass transit.
desert_fox
Threadkiller
Jubilee on Earth
Veteran Member
Just want to update that I know three people now who got notice of layoffs at car manufacturers. They all said it’s because of chips. One works for Ford, one works for Chrysler, and the third works for a Tier 2 supplier.
This is all within the past week. No one knows for how long, but they’re starting to panic a little. Nothing worse than being laid off when the holidays are right around the corner.
This is all within the past week. No one knows for how long, but they’re starting to panic a little. Nothing worse than being laid off when the holidays are right around the corner.
AlfaMan
Has No Life - Lives on TB
Fewer new cars will keep the used car market pricing higher than normal for a long long time. It's not showing ANY signs of price decreases currently.
And the car makers that are able to produce new vehicles (Hyundai/Kia, BMW, Nissan overseas production etc) will sell them at full price, and will (and are) be getting good sell throughs and profits from them.
AlfaMan
Has No Life - Lives on TB
You're seeing what I'm seeing. Cars I'd look at that might have gone for 5K in the past are now regularly going in the 7,500-8000 dollar range. Front line aged inventory that local dealers are flipping are wholesaling for as much as retail prices on their window stickers. We're talking aged front lines-60 days plus.
AlfaMan
Has No Life - Lives on TB
Curious-what model Honda? All of them are under fuel pump replacement recalls, some still fall under the Takata airbag recalls; '16 and up Civics/CR-Vs/Fits still have the AC condenser recall. And most of the '16-19 motors still fall under the oil dilution warranty extension.
LYKURGOS
No Surrender, No Defeat!
I don’t know if I believe the source but a Toyota salesman said that Toyota has all the parts allocated to build the 2022 models. I think it’s fake advertising but they are getting 10 new units a week in a town with a 15000 population. Not too shabby. They are selling to people all over the nation though.
Maybe all they have planned to build is 1000 units in 2022.
Meanwhile if your not vaxxed your getting axxed the end of the month. Go figure. How is that helping car production numbers? Oh that’s right they want us walking!
This whole mess is designed to hide the collapsing economy. When 30% of the unvaxxed walk off the jobs nationwide in two weeks they will blame the collapse on us bitter clingers hating on granny’s and lgbq’s
Maybe all they have planned to build is 1000 units in 2022.
Meanwhile if your not vaxxed your getting axxed the end of the month. Go figure. How is that helping car production numbers? Oh that’s right they want us walking!
This whole mess is designed to hide the collapsing economy. When 30% of the unvaxxed walk off the jobs nationwide in two weeks they will blame the collapse on us bitter clingers hating on granny’s and lgbq’s