How does auto manufacturing survive?

I'm awaiting a TRD Pro and I know it'll be months and months before I see one. But just taking a glance around Autotrader today, there are a BUNCH of dealers with little to no inventory on hand. Everywhere you look it's "In Transit"

So I'm left to wonder, whether supply chain or just keeping demand high, how are they making money? I mean, don't you have to sell trucks/vehicles to make money?

Admittedly I don't know much about the insights of the auto industry, but I don't see how you can stay in business if you're not selling your product...

 

When you make 2x as much profit /car you can sell half as many cars.

 

every unit is sold , fewer rebates or incentives , higher profit margins per vehicle . Things are slowly changing more inventory , fewer ADM , some offer discounts off MSRP

 

Don't forget service is a major cash cow for dealers and manufacturers.

 

This new model also lowers fixed overhead and carry costs at the dealership level. In the past the manufacturer had to be the bank for the dealers inventory. Now that cost is gone or greatly reduced.

 

I think the issue will really show up for dealerships in 2-5 years when they don't have the population of vehicles to service. All the sudden they have 1/2 or 1/4 of the cars coming through service than what they typically have. Yikes.

 

I have two friends/clients who own car dealerships.
They lose money on sales.
They kill it on service.
Fairly straightforward. Toyota corporate offers kickbacks and rebates to dealers upon vehicle sales, so that helps with some of the losses.
Overall however, vehicle sales really only exist at the dealership to facilitate service contracts. Thats where the profit is.

 

"in transit" is just code wording that the vehicle is coming to that dealership is already sold.

i mean when our 2023 platinum was "in transit" (we already had a $1000 deposit on it), it was a way for my dealership to drum up interest on the web surfers and possibly get them to come in and talk about getting one on order.

 

my truck was in transit and not spoken for when i found it

 

I think EVs are a fad. They aren't sustainable long term, regardless of what the marketing says.

Not that I think ICE is long term either, although the oil industry won't give up easily.

There's something better than both that will eventually make both obsolete.

 

also have to take into account (right now) that paying for charging stations to fill up on the go is such a mess. its like you have to have 5-10 different apps to pay for a charge outside of home since there isnt a standard for payment across all the different charge station brands. i know telsa you have to pay a premium for those stations that accept vehicles that are not telsa. telsa has a telsa rate and a higher rate for non telsa cars.

i mean i its the same price for electricity if its a telsa or rivian. its not like 87 octane vs 91 octane.

i guess you could stretch the clueless and say you are paying for 208v vs 120v /s

 

Sell fewer at higher price can be better business model than selling a ton at little profit. That model killed Detroit for decades

 

Same. “Sale pending” was added once I put the deposit down.

 

Extended warranties help. It's free money 55% of the time.

 

the tech isnt the issue.

1. rare minerals for batteries

2. charging stations
2.1 find some stalls not working

3. no common payment system across the different brands of charging stations
3.1 try managing 5-10 different apps to pay for charging at all the different brands of charging stations

4. cold weather charging
4.1 if you battery pack is too cold, your charging time just doubled (your battery pack has to be heated up before it will charge)

5. charging time can be anywhere from 15-30 mins or longer compared to 5-10 mins to fuel up

6. electricity cost vary alot from state to state, home charging is your best bet
6.1 long distance driving and playing "find waldo" (charging station)

7. range reduction during winter months
7.1 full charge range can be cut in 1/2 below 32-40F temps, worse if you live in states that drop below 0F or even hit -20F temps
7.2 that 300-400 miles range just got cut to 150-200 or even less depending on temps

8. power grid
8.1 if even 1/2 or 3/4 the country went to full ev mode, the power grid wouldnt be able to sustain the load
8.2 side effect, price of electricity would go up to then be compared to a tank of gas

just some hurdles that need to be addressed but no one talks about it openly.

these are my opinions, lets just leave it at that

 

I never understood those dealers who tell you to take your vehicle back to where you bought it for service. The Toyota dealer near me would service a skateboard if you brought it in I think

 

Get everyone used to paying ridiculous prices for ICE vehicles then cut the cost of EV's. A lot will make the switch.

 

Agreed. I bought a 2000 4Runner in 2011 from a dealership in Springfield, MO. Brought it to the local one in St. Robert, MO because essentially the rear wiper was weather welded (lol) onto the shaft.

They took the shaft off, then replaced the part and the wiper at THEIR expense. Since then we've bought 4 vehicles from them, and our future vehicles will be from them as well. Have received nothing but exemplary service.

 

Sounds like perfect control of the masses.

 

I think EVs are en vogue due to a government push on both the demand and supply side. They won't go away and in the end they may remain somewhat more popular than they used to be. But as consumers educate themselves about the limitations a large number will walk away when anti fossil fuel policy goes away. The claims this is the wave of the future and where we're all going are premature at best.

These companies that used to focuse on gas engines and are drastically restructuring to focus on EVs will be crushed by the expense of pivoting again and unloading what's left when they stop selling. It may even cause another round of bankruptcies. In the end we'll go back to a few stand alone EV companies who will be extremely relieved to get the market back to themselves and see a huge stock boom.

 

Steam is coming back around as the epitome of powered transportation. At least in my neck of woods we're half way there with all the coal fired EV's running around.

 

I own a hybrid F150, my opinion on Hybrids is completely different from that of plug EVs.

 

If the battery technology catches up, I think the primary motivation that people will switch to an EV will be the the potential for increased reliability, lower cost overall, and longevity.

If you never used battery powered tools, it would be hard to justify. Gotta replace the batteries, doesn't have as much power for some applications, but the reality is that on a job site everyone fights over the battery powered tools, and they are very durable.

 

I'll stick with ICE. I like dinosaurs

 

I think range increases are a realistic expectation but the game changer that will probably not happen in our lifetimes is the ability to put 1-200 miles worth of charge back into a car in a few minutes. I am not interested in vehicles whose needs I need to plan my daily routine to accomodate.

 

Not right for everyone. I personally would be fine with 300 mile range and overnight charging. Lots of work trucks or commuter cars would switch as soon as its more cost effective. A lot of people have more than one vehicle. Solar panels are already popular in every neighborhood where i live, so ability to charge car, use car as backup power, lower electric cost.

But my point was that I think the reliability, lower cost to own, and longevity will be the main reason people switch. Even somegthing as minor as getting oil changed may be more of an incentive to a lot of people to drive an EV.

I'm not suggesting they will be right for everyone or there will be some sudden transformation. I think it will be best for people who charge at home, and drive less than 300 miles where that works out.

So far whenever I mention my humble opinion that it will be longevity and reliability that will be more of a motivating factor, everyone just says, what about this or what about that. But right now most people either love or hate EV's for the wrong reasons, or the reasons that won't be relevant to people who end up changing over. And that's still a big IF the battery technology catches up. I was looking at the F150 Lightening base one, but prices jumped up over 10k in a month, so not even at option at this point.

 

How does auto manufacturing survive?


In 2007 they were too big to fail. Don't know if that's still true.

 

The generation of electricity is no better than the creation of gasoline and oil for ICE vehicles.

No one wants to talk about the harsh reality of how to generate that much power, reliably, and consistently. Nor about the reality behind solar panel creation and disposal. Or battery creation and disposal.

Nor do people want to talk about the harm to our bodies with all the EMF from these things.

I don't see EV vehicles going anywhere long term.

 

Auto manufacturing will and can survive just fine without Auto dealers.... all the dealers in the country could fail and auto manufacturers would be just fine, even thrive I dare say, they would make more money!