Welcome back to the CarDealershipGuy newsletter. Where you can get all the top automotive news in 5 minutes or less.
What’s Inside:
🏆 New Vehicle Prices Reach All-Time Highs, Again
🔋 Ford Sticking It To The Dealers
🔎 A Glimpse Inside The Industry
📰 Look Mom I Made The News
📖 Articles I Read This Week
Read Time: 4 Minutes & 27 Seconds
Was this email forwarded to you? Subscribe Here
🏆
New Vehicle Prices Reach All-Time Highs, Again
New vehicle prices reach a new all-time high of $48,301.
This tops the previous record set in July which was $48,080.
This is a .5% or $221 MoM (Month Over Month) increase and a 10.% or $4,712 increase from August 2021 new vehicle prices.
The major player in this price increase is still limited supply.
But even with limited supply, we are still seeing lower than normal sales for new vehicles.
The average number of units sold per month this year is 1.1 million. In contrast the first 8 months of 2019, the average number of units sold per month was 1.4 million. Giving us a 300K unit difference between 2019 and 2022 new vehicle sales.
But if you want my hot take the real issue will come in 2-3 years when we have a used car shortage.
I mean the used cars were all new cars at one point, right? So what happens when we go several years with a limited new car supply...?
🔋
Ford Sticking It To The Dealers
Remember last week when I said Jim Farley the CEO of Ford is going to Las Vegas to meet with franchised Ford dealers?
Well, he met with them and he laid out Ford's plan for how they are going to stay on top of the market and go head to head with other EV brands like Tesla.
Ford gave their dealers 2 options:
Incorporate no haggle pricing & make necessary EV investments
Lose the ability to sell EVs at their dealership
This is a HUGE deal because EVs could start making up a large portion of sales for dealerships in the near future.
So if they want to have a piece of that pie the dealers are going to have to start selling cars at the suggested price (no haggle) and make the necessary updates to their dealership to become EV certified.
These EV certifications have 2 tiers at the moment:
Tier 1 or Model e Certified Elite updates will cost $900,000 at first and then an additional $300,000 by 2026. This money will go towards DC chargers to help Ford create a robust charging network.
Tier 2 or Model e Certified will start with a $500,000 investment to place just one charger at their dealership. However, if a dealership goes with this option they will be limited on what EVs they are allowed to sell.
These dealerships have until October 31, 2022, to opt-in to one of the two EV certification tiers before they lose their ability to sell EVs.
How many Ford dealers do you think will opt-in?
🔌
This Weeks Newsletter Is Brought To You By Recurrent.
Is an EV only as good as its battery? For many used car buyers, that answer is yes.
Judging a car by its odometer is a fading standard from the combustion engine era.
Since battery health and odometer are not directly correlated, buyers are looking for new ways to evaluate range and range loss before a purchase.
That's why car owners and dealerships around the US are using a new tool from Black Book and Recurrent to determine EV values, and often justify higher prices.
If you plan to sell an EV in the next 6 months, check an EV's value here. Today it supports most Tesla, Chevrolet and Nissan models in the US.
Want your ad to appear here? Reply to this email or fill out this form.
🔎
A Glimpse Inside The Industry
I always find that the most interesting things in life are the ones hidden in plain sight.
And there is a big one going on right now that no one is talking about.
While everyone has been paying attention to the record-breaking car prices over the last 2-3 years no one has been talking about what happens on the other side of this.
Well, when there are record-breaking prices. There are also record-breaking loans.
How else are these people going to pay for their new trucks?
But now that prices have started to come down and sales have started to slow these loans have been declining quickly.
So quickly that 2 major auto lenders have started purging dealer partners over the last couple of weeks.
Meaning auto lenders have begun tightening. Fast.
📰
Look Mom I Made The News
This week Business Insider released an article titled "Used cars are getting cheaper. Here's a breakdown of how prices have moved from Scions to Jeeps." written by Ben Winck and Madison Hoff.
In this article, they talk about how used car prices are starting to decline. Something I have gone into great detail about on both my Twitter account (@guydealership) and this newsletter.
But the best part is that they actually discussed the tweet exchange I had this week with Nick Huber (@sweatystartup).
"Prices could continue to fall 1% to 2% every week, and the end of the year could yield the best deals before a potential rebound, an industry expert and newsletter writer who solely goes by CarDealershipGuy"
📖
Articles I Read This Week
Thank you for joining me again here on the CarDealershipGuy newsletter. See you next week!
Want to place an ad on an upcoming CarDealershipGuy newsletter? Reply to this email and I will be in touch.
CarDealershipGuy Job Board
Are you a talented individual who is looking for a job in the auto tech space?
Are you a company in the auto tech space that is looking to hire talented individuals?
Do yourself a favor and come check out the CarDealerhipGuy Job Board:
What did you think of this newsletter?Here's your chance to tell me what you really think... |
DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.