CEO of Largest Car Dealership in U.S. Confirms What We Already Suspected
Due to intentional undersupplying, car prices don’t appear to be dropping anytime soon.
Written by Preston Charles
Reviewed by Kathleen Flear
Remember the days of the greatly slashed,
mega car sales
? “Come down to John Doe Car Lot for our Presidents Day clearance sale!” According to Mike Manley, CEO of AutoNation, parent company to the most dealerships in America, those days are likely behind us. Like the pandemic has done for multiple industries, it’s made automakers rethink how they once did business, and ultimately trimming down their inventories. Supply chain issues compounded with
microchip shortages
have led automakers to believe that high and tight is a better model. The result is a steady demand and a higher price point. In short, it’s better for the seller and worse for the buyer. Car sellers shift their thinking
Last year discounts hit a five-year low. New car prices have begun to stabilize, which could be a sign for better things to come, but Manley, argues otherwise. “Significant discounting and high incentives can also damage a brand, which is another reason for our industry to balance appropriately supply and demand,” says Manley.
And Manley isn’t alone in his harsh take. Last year,
General Motors CEO Mary Barra
told reporters, “We’ll never go back
to the level of inventories that we held pre-pandemic because we’ve learned we can be much more efficient.”The CFO of Mercedes-Benz parent company, Harald Wilhelm, has also chimed in with a similar sentiment, “We will consciously undersupply demand level.” It feels kinda disappointing, doesn’t it?
Longer lead time
In the days of old, like 2019 and before, customers were used to going to the dealership and driving a car off the lot that day. With this new model, customers can expect to wait 3-4 + months for the car of their choice.
Other options are to keep your finger on the pulse of certified pre-owned cars in your area. You can also check back often with the dealership as buyers frequently fall through and a car could become available last minute. You just have to be ok with the color it was ordered in and the finishing trim.
It’s been a weird few years on a lot of levels, not least for the consumer. Whether these strong statements by the heavy hitters above will be lasting or disappear in the coming years is yet to be determined. Time, and the quarterly sales report, will tell.
MORE: Electric Car or Hybrid: Take a Quiz to Figure Out Which Is Right for Your Needs
Protection for the car you do have
Perhaps now more than ever it’s important to protect the car you currently have so you’re not forced to buy something in this tough market. Car insurance super app,
Jerry
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