Thanks! Six years in the making ... We started as a YouTube channel (me and my dad), and now we are here. So fun. So cool. What a time to be building!
215 karma · joined February 27, 2014
Greg did a good job documenting the challenges of buying a car in today's market. Fortunately, we are starting to see a softening in consumer demand which has led to used car prices to begin to drop in some areas and for certain types of vehicles.
We expect that as automakers increase production we'll go away from markups. The timeline for that is tricky since Asian brands (Toyota and Honda especially) are struggling MUCH more than American automakers. MSRPs are rising fast too, so while dealer markups may disappear as demand weakens and supply increases, don't be surprised if you see MSRPs that are 5-10% higher year over year.
Wait times right now for hybrid vehicles are over a year. The push to PHEV and BEV will continue to be delayed due to ridiculous prices. The average transaction price for a new EV last month was north of $66,000. Not affordable.
Great insights in Greg's article. I wish we could have helped him before he embarked on the journey.
They'll make tons of gross profit because their cost infrastructure will go down, and OEMs will be happy because they still won't have to deal with customers and can focus on wholesaling cars to their "dealer" network.
The rub is in the finance and insurance products. OEMs all have captive lending arms, and currently dealers make a ton of money ($1,500+ per vehicle retailed) in finance and insurance profit. Navigating that relationship will be interesting as OEMs take on more control of the sales process.
The current "markup" phenomenon is the same as the prior experience (pre-pandemic) where OEMs intentionally subsidized the purchase of their vehicles well below MSRP, and savvy customers could negotiate thousands off a car deal. It's mind boggling to me that we allow for such an inefficient market to perpetuate! 100 years of franchise dealerships is enough! Time for business and consumers to wake up and enact change.
The reason car dealers are so powerful is because they influence so many aspects of local government.
1) new FTC proposed rules (which are open for public comment!) would ban the practice of “surprise” add-ons at the dealership.
2) a lot of folks that contribute to markups (and other crowdsourced initiatives) go all the way to getting a buyers order and then report those add-ons when they show up then.
If you’re interested in the FTC rules, read here: https://joinyaa.com/guides/ftc-dealer-rules/
The bulk of vehicles taken off production schedules were in the Asia-Pacific (306,000) and North American (214,000) regions.
China accounted for the majority of Asia-Pacific losses, nearly 194,000 vehicles. About 112,000 vehicles were removed in the rest of Asia.
Honda Motor Co. cut 115,000 vehicles in the U.S., 57,000 in Canada and 19,000 in Mexico. Stellantis had a net loss of 19,500 in North America, while Ford Motor Co. lost 3,300 units in two Canadian plants.
AFS estimates the global industry has lost 8.9 million vehicles from planned production so far, and the potential lost volume is 10.15 million.
Last week, AlixPartners raised its estimate of lost auto industry revenue to $210 billion, up substantially from its May forecast of $110 billion. Meanwhile, Bloomberg reported that the Biden administration is considering invoking a Cold War-era national security law to force companies in the supply chain to provide information on inventory and sales of chips.
When semiconductor shortages eventually ease, Volkswagen plans to keep fewer cars on dealer lots, because it has proved to be more profitable for manufacturers and dealers, Keogh said.
“Going back to the days of having 100 to 120 days’ supply is not going to happen,” he said. “Now, people have 30 to 40 days’ supply and it’s working quite fine. Somewhere in that 40- to 50-day camp would be a beautiful thing.”
I documented my decision making process leading up to leaving the firm I was COO at. I was 24, and making $200k per year. I still knew entrepreneurship was the right decision. So glad I made the leap!
Our goal is to create a resource for how small and medium size business and nonprofit leaders are adapting their organization's as a result of Coronavirus. If you have any questions or thoughts on how we can make this most valuable, please let me know.
MarketSmart is like HubSpot, SurveyMonkey and Tableau mixed together and specially designed for nonprofits to help their fundraisers zero-in on the wealthiest and most passionate prospective donors.
There’s a start-up vibe here but we are profitable and our growth is stable (+32% in 2016, +25% in 2015 and this year we are aiming to grow by 50%+). There are 1.5 million nonprofits in the United States alone. So, with fewer than 200 customers spending an average of about $25,000/year each, there is lots of room for expansion. We are well funded and already have many of the most recognized charities around the world as clients (in four countries).
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