Light at the end of the tunnel for Automobile Supply and Demand

[MattIngram]

Interesting read, supply/demand for new vehicles are expected to reach equilibrium by October 2022. Hoping that new vehicles, like the maverick are able to get caught up next year.

https://jalopnik.com/used-car-values-are-poised-for-a-big-drop-1848251627

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[pxpaulx]

I'm skeptical that it will play out so simply. Your going to have 18 months worth of sold vehicles (both used and new) at historically high prices. The article also seems to skip dealer market adjustments, which they'll likely also try to continue.

The net result of having 18+ months of buyers with inflated loans under water would be continuing low inventory availability, as people won't be able to trade and upgrade unless the sky high pricing continues for a much more extended period.

I would be less surprised if the new vehicle industry adjusts their MSRP upwards to capture some of those market adjustments back from the dealers.

 

[MattIngram]

I'm skeptical that it will play out so simply. Your going to have 18 months worth of sold vehicles (both used and new) at historically high prices. The article also seems to skip dealer market adjustments, which they'll likely also try to continue.

The net result of having 18+ months of buyers with inflated loans under water would be continuing low inventory availability, as people won't be able to trade and upgrade unless the sky high pricing continues for a much more extended period.

I would be less surprised if the new vehicle industry adjusts their MSRP upwards to capture some of those market adjustments back from the dealers.

Nothing involving people is ever simple. That being said, new vehicle production meeting demand will impact used vehicle prices whenever that happens, 2022-2023. Consumers will simply choose new over used if everything else remains the same, especially price. As for market adjustments, we’ve seen numerous orders being cancelled/reordered on this forum. I suspect that market adjustments will no longer be tolerated by buyers, when dealer inventory normalizes and more alternatives become available.

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