Car sales plummet in April, setting stage for possible auto industry shakeup

Greaser · Canadian Poncho Superstar!

Car sales plummet in April, setting stage for possible auto industry shakeup

4SPEED427 · A Poncho Legend!

My nephew works for a pretty large family run auto dealer group in Winnipeg. They have numerous dealerships. They laid off 70% of their staff at the peak, I'm not sure what percentage are back at this point.

CdnGMfan · Canadian Poncho Superstar!

My cousin used to be General Sales Manager at City Pontiac-Buick-Cadillac in the 1970s. He then had a heart attack and was off for a while. When he came back they were so used to functioning without him there that he found he no longer had a job.

I think many businesses are going to rethink how they operate after all this.

ABC123 · Uber Guru

Greaser wrote:
https://www.cbc.ca/news/canada/london/car-sales-1.5556498
"I think you're going to see everyone run a lot leaner.
One of the things that I think a lot car dealers are discovering
is how well they can function with fewer people.
You're going to see them take their people back slower than what a lot of people are hoping."

Yep,

Not just in automotive.

I notice that my on-line work account has now been suspended.

Don't think I'm in their plans for the near future.

More time for cruising !

68vert · Guru

So I've been mulling over weather to replace the wife's 2009 Toyota Highlander, we've owned since 2010 (1 year lease buyback). Been dead reliable even to 190,XXX KM on it now but just looking for an upgrade, do you think we're at the 'bottom' now or should I wait 6 months or a year? Ideally would like to find another low mileage version a year or 2 old. Tried to convince her to look at other brands/models too but she says...you have your truck, motorcycle, and your 'toy' car so I get to choose MY car lol. Don't want to be a bottom feeder off someone else's hardluck, but just looking out for my own hard earned dollars too.

68vert · Guru

4SPEED427 wrote:
My nephew works for a pretty large family run auto dealer group in Winnipeg. They have numerous dealerships. They laid off 70% of their staff at the peak, I'm not sure what percentage are back at this point.

There's a large family run dealership network close to me too and they have GM, Nissan and Hyundai dealerships. The GM dealership has some very long term sales people, unlike some other revolving door salespeople that jump brand to brand (which always makes me question their true integrity when the say Brand X is best then next month it's Brand Y....anyway I'm digressing) and one of their long term salesguys has been off for 6 weeks plus and not sure when he's going back...... I've heard some of the very good sales people can make close to 6 figures so I'm sure the dealerships are rethinking their business model.

MC · Canadian Poncho Superstar!

68vert wrote:
So I've been mulling over weather to replace the wife's 2009 Toyota Highlander, we've owned since 2010 (1 year lease buyback). Been dead reliable even to 190,XXX KM on it now but just looking for an upgrade, do you think we're at the 'bottom' now or should I wait 6 months or a year? Ideally would like to find another low mileage version a year or 2 old. Tried to convince her to look at other brands/models too but she says...you have your truck, motorcycle, and your 'toy' car so I get to choose MY car lol. Don't want to be a bottom feeder off someone else's hardluck, but just looking out for my own hard earned dollars too.

My best guess is that if you are thinking that buying new is a possibility, wait a little longer.

- Companies are currently sitting on huge inventories of unsold new cars as dealers are mostly closed or not busy at all due to covid

- Cash flow has been severely reduced for all companies, and they will need to get those cars moving to bring cash in to pay their bills and remain solvent

- Factories have been stagnant for awhile but planning to start running again soon - will be working to pump out remaining 20 models, but will have to switch over to 2021 production in August

My guess is that there are going to be some great deals to bring customers into dealerships to get some cash flow happening, and they will soon be dumping 20s to start bringing in 21 models... so can't guarantee, but the ducks are lining up for some good deals, in my opinion (just an opinion of a guy on the internet, so use advice with caution).

Canadian Poncho · A Poncho Legend!

A friend of mine is buddy's with the owner of one of PEI's busiest used car lots. He was talking to him today. He said he's only selling cars under 4 grand and even sold a couple where the buyers used a credit card. Most banks don't even have staff on hand to process a car loan.

68vert · Guru

MC wrote:
68vert wrote:
So I've been mulling over weather to replace the wife's 2009 Toyota Highlander, we've owned since 2010 (1 year lease buyback). Been dead reliable even to 190,XXX KM on it now but just looking for an upgrade, do you think we're at the 'bottom' now or should I wait 6 months or a year? Ideally would like to find another low mileage version a year or 2 old. Tried to convince her to look at other brands/models too but she says...you have your truck, motorcycle, and your 'toy' car so I get to choose MY car lol. Don't want to be a bottom feeder off someone else's hardluck, but just looking out for my own hard earned dollars too.
My best guess is that if you are thinking that buying new is a possibility, wait a little longer.
- Companies are currently sitting on huge inventories of unsold new cars as dealers are mostly closed or not busy at all due to covid
- Cash flow has been severely reduced for all companies, and they will need to get those cars moving to bring cash in to pay their bills and remain solvent
- Factories have been stagnant for awhile but planning to start running again soon - will be working to pump out remaining 20 models, but will have to switch over to 2021 production in August
My guess is that there are going to be some great deals to bring customers into dealerships to get some cash flow happening, and they will soon be dumping 20s to start bringing in 21 models... so can't guarantee, but the ducks are lining up for some good deals, in my opinion (just an opinion of a guy on the internet, so use advice with caution).

Thank you, all good points. Toyota dealers rarely deal around here as they will just be able to sell to the next customer for their asking price. That said this is unprecedented and weve bought 4 vehicles from this dealer so maybe if I hold out Ill get a better deal!?

Pontiacanada · A Poncho Legend!

MC wrote:

My best guess is that if you are thinking that buying new is a possibility, wait a little longer.
- Companies are currently sitting on huge inventories of unsold new cars as dealers are mostly closed or not busy at all due to covid
- Cash flow has been severely reduced for all companies, and they will need to get those cars moving to bring cash in to pay their bills and remain solvent
- Factories have been stagnant for awhile but planning to start running again soon - will be working to pump out remaining 20 models, but will have to switch over to 2021 production in August
My guess is that there are going to be some great deals to bring customers into dealerships to get some cash flow happening, and they will soon be dumping 20s to start bringing in 21 models... so can't guarantee, but the ducks are lining up for some good deals, in my opinion (just an opinion of a guy on the internet, so use advice with caution).

Yep. Yep. Yep. Yep & yep. I agree with you "guy on the internet".

DonSSDD · Canadian Poncho Superstar!

I agree with waiting and think there will be a lot of late model lease and financed vehicles coming back starting in a few months.

The back to work recovery is going to be very slow, people now are taking in way less money from EI, etc so even when they go back to work, they will be in a big hole cash flow wise. It will take a long time to catch up and to start thinking about a new car so demand will fall dramatically for new vehicles. I think there will be a lot of 2017-2020 low mileage used vehicles around and prices for these vehicles and new vehicles on the lot will lower quite a bit, maybe 10% for new and at least 20% for used. For used under $20,000 or so, I think these prices will not drop much as this will be what people can afford for the next couple of years.

The vehicle you have should maintain its value but a Toyota dealer will lowball you for it on a trade and be very reluctant to drop the new vehicle price. Id recommend selling privately and buying one a year or 2 old, with lots of warranty.

I am a retired commercial banker, I was lending money in the downturns in 81, 91, and 2008. This economic hit feels like it will be way worse. Until we get a vaccine or cure, the start back up is going to be very messy and protracted. Our economy has been running on do more with less for years, so no redundancy existed before Covid and now with social distancing, a business with say 20 workers will be going back to work with say 10-15. They probably cant make a profit with less than 20 or so people?

Well see how things go with say meat packing plants, what volume can they produce while keeping workers healthy?

As Jimmy Buffett sings, its a bankers job to worry.
m.youtube.com/watch

68vert · Guru

Thanks for everyone's input...it's just so unprecedented, we've been reasonably frugal having lived for many years at a level when our income was much lower so we're fortunate we can even consider a new vehicle, but it's still unnerving even though we've both held onto our positions thankfully.

Good point Don on selling our car privately, I know it's too old for the dealer to keep on the lot so off to the auction it will go and the tax savings (I bet I would be lucky to get $5-6K even if I'm spending $40K on something else) certainly wouldn't offset the difference I'm sure.