Unsold cars pile up
source: http://www.reuters.com/article/domesticNews/idUSTRE4B61NA20081207
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WisconsinNorm
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Does anyone REALLY KNOW what a car costs out of the rear end of a factory? What a dealer REALLY pays including manufacturer/dealer rebates--&--If there were no dealers and cars were sold out of the back of a factory, what would a reasonable mark-up be to keep such a level of high-tech manufacture solvent?
- 3 years ago
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WisconsinNorm
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AveryMoore
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WisconsinNorm:
Excellent point.
Anyone who has worked in Accounting for any large corporation knows that it is routine business to inflate costs to give the appearance of low taxable profit. This is far from unusual practice.
As a summer job I was hired as a junior cost accountant for a large firm that manufactured, among other things - hearing aids. Had to see the boss one day because a cost variance arose in one of our products. By my calculations the actual cost of a hearing aid was $25 and change. Our selling price to wholesalers was over $300.
I asked my boss to show me where I had made my mistake. He knew the product and started laughing. "They're HOSTAGES!" he said. "They have to buy at whatever price the industry sets! Do you think it actually COSTS $25 to make one of those things? It's pennies! Our costs are a mirage! See?"
Back at university studying Economics I heard the euphemistic version of the "Hostage Pricing Principle". It was called "Inelastic Demand." Naturally, I laughed.
But until I took more Accountancy courses nobody ever talked about deliberately inflating costs to hide profits.
But one thing the class was told confidentially - "Usually your employers will want you to skim about 15-25% of profits to their benefit. Don't. They get the money and you get the jail term."
The real cost of cars? Nothing like what we are expected to pay.
- 3 years ago
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AveryMoore
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themanwithadog
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No problem really. Manufactures must sell all the stocks for $50 to registered car owners, all their older vehicles should then be scrapped and the scrap exported to China. Let them build the new cars but with minimum toxic emissions then export them to the US where they will be considerably cheaper than the US made models
If they build too many the problem is theirs
- 3 years ago
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themanwithadog
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AveryMoore
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rasting writes,
"Surplus of cars, that's interesting. With the world in a recession and deep doo doo what will they do with these cars. Will they just sit in these lots or eventually get sold?"
rasting? Your likely answer - and a fine example of idiocy - sits in the desert just outside Tucson. And yes both instances reflect incredible waste of raw materials and an excess of gross stupidity.
Recycle? Sell at a loss just to move some product and bring in some cash? Offer cheap rentals? Use the shells and install different engines?
That's not how we've done business.
- 3 years ago
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AveryMoore
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motokoinversailles
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why don't they sell them for what they are worth right now?...nothing! so i can get out of my crappy '93 taurus, and into something a little less frumpy
- 3 years ago
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motokoinversailles
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GreenhouseNeutralFoundation
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While all these gas guzzelers are sitting there, why don't they get started converting them to electric?
Bob Williamson
Chair Greenhouse Neutral Foundation
Author of ZERO Greenhouse Emissions - The Day the Lights Went Out - Our Future World
www.strategicbookpublishing.com/ZEROGreenhouseEmissions.html - 3 years ago
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GreenhouseNeutralFoundation
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Dragunov316
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I lack sympathy for the car industry. They have made hundreds of billions in profits over the years, and they never planned for this, even though they knew it was coming. Japan and Germany planned for it.
Maybe they should consider selling these cars wholesale just to recover loses. (Real wholesale, not their wholesale) Then they can start making decent alternative energy vehicles.
- 3 years ago
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Dragunov316
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AdrianBikes
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So what, no one needs newer cars, we just need better cars.
I say get damn bike! All we need now is an efficient bike pathway structure and the need for cars would go WAY down.
shiiiiiit
- 3 years ago
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AdrianBikes
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metalcookiesxy70
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Recycle the cars, then produce more energy efficient {green}cars to replace those cars that have been thrown away...When will these automakers learn that not only we are in a recession, therefore almost no one can actually afford a car, but that green cars are simply much better for the environment and the economy...
- 3 years ago
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metalcookiesxy70
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bornproof
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I think the auto industry will be just fine as long as people need transportation that allows them to personalize their environment when they are on the go instead of smelling other peoples farts, listening to babies scream, or being infected with germs from sneezes and coughs on the train or bus or mass transit. Think about it!
- 3 years ago
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bornproof
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thorstein
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It's only going to get worse!
- 3 years ago
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thorstein
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bigred5
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I've been in the market here lately for a new ride. In my humble opinion their not stacked deep enough yet.
- 3 years ago
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bigred5
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BFAM_RVS
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I sure hope the prices for cars drops along with the increase in unsold supply...
- 3 years ago
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BFAM_RVS
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Chango2000
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they should make transformers from the surplus of cars and put them in all major metropolitan cities.
they could be tourist attractions.
- 3 years ago
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Chango2000
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2muchinfo
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If there are so many cars in the U.S just sitting there shouldn't the price of cars go down due to overproduction?
- 3 years ago
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2muchinfo
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ii386
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2muchinfo:
we can only hope!
- 3 years ago
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ii386
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AveryMoore
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2muchinfo:
2muchinfo writes,
"If there are so many cars in the U.S just sitting there shouldn't the price of cars go down due to overproduction?"
That's The Glorious THEORY, isn't it?
There's no reason manufacturers couldn't rent them all for peanuts and at least make something! But will they?
- 3 years ago
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AveryMoore
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Stunner1
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Where all of these cars go? I think it's good so many people aren't buying cars anymore but the cars that are stil being produced are just sitting there and filling up space. We need to come up with a way to recycle or use these cars in a way that can help the economy.
- 3 years ago
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Stunner1
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tracy_hall_37
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Everyone needs to get rid of there cars and do something to help the environment because you are ruining the environment for everyone alse who lives here.
- 3 years ago
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tracy_hall_37
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barbara3d
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tracy_hall_37:
nice thought but would not work in places like Atlanta or other big cities. Also hard for familes to haul children, groceries on them. Younger people just responsible for themselves, okay.That might help them out and their pocket books as well.
- 3 years ago
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barbara3d
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sleepnomore
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Tell the automakers to release the car that runs on water or the one that runs on air. You know they have the technology. Those cars can sit and rot for all I care. No one will give me a bailout to get one.
- 3 years ago
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sleepnomore
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petarro
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Ill pay $7000.
- 3 years ago
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petarro
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islek
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People are spending any money in the auto industry to fix the vehicles they already have. In most cases, that's the less expensive alternative than buying a new car, even with the deals being offered right now. Supply will go down because demand will go down.
- 3 years ago
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islek
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Leonidis
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I bet they wish they didn't get rid of that electric car now!
- 3 years ago
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Leonidis
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arcticspirit
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One would think that if they are not selling that they would quit ordering! And the companies would quit sending?
Sighs.
- 3 years ago
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arcticspirit
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2muchinfo
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arcticspirit:
But that is not happening. They continue to make new cars when there are thousands of cars that have never been touched.
- 3 years ago
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2muchinfo
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krush_productions
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And we want to make new cars because?
- 3 years ago
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krush_productions
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arcticspirit
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krush_productions:
I've never owned a new car.
- 3 years ago
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arcticspirit
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krush_productions
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krush_productions:
I don't anymore, just ride a bike and it fucking kicks ass!
- 3 years ago
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krush_productions
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metalcookiesxy70
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krush_productions:
I never will own a car...
- 3 years ago
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metalcookiesxy70
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barbara3d
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krush_productions:
metalcookie: why? what do you do if you want to travel or just visit someone and the weather is bad? That is sad. They will be cheaper REAL soon and maybe electric too.
- 3 years ago
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barbara3d
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AveryMoore
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krush_productions:
Barbara3d writes of NOT wanting to own a new car,
"metalcookie: why? what do you do if you want to travel or just visit someone and the weather is bad? That is sad. They will be cheaper REAL soon and maybe electric too."
Barbara? Never heard of "rental"?
- 3 years ago
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AveryMoore
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metalcookiesxy70
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krush_productions:
I won't because.....I know that I will buy a bike, or maybe something else of transportation, if not, then I will ride a bike...
- 3 years ago
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metalcookiesxy70
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1percent
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Excellent!
Pareo Nullus
- 3 years ago
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1percent
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TheSystemHasNoSOUL
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Comming soon.. SUV's will become portable Greenhouses...GM will be a new corporation Green Machines..for weed growing etc...fresh delivery to your doorstep...of course for medical purposes only....
- 3 years ago
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TheSystemHasNoSOUL
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Nozlo
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Spot on purplefox. Everyone knows that we all need to drastically cut our emissions of CO2 for this planet to survive. Oil is running out. We also know that the cars being made now are using petrol because that is good for oil companies which is good for generating tax revenue. We also know that cars could be very much more efficient than they are but the oil companies have powerful lobbyists. So we are all being used - big time. And it is time to STOP.
The age of the internal combustion engine driven car is over. It was an invention that has had its time. The situation shown above should be driving (excuse the pun) the devlopment of vehicles with propulsion using different fuels that won't ruin the planet, that will make every nation independent of foreign oil suppliers which will dramatically improve our financial woes.
If the big car companies can't change then they deserve to go to the wall and leave it to others who can.
- 3 years ago
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Nozlo
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ii386
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so why can't they sell me a cheap one? I need another car and you should see these prices i'm expected to pay!
- 3 years ago
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ii386
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bigred5
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ii386:
been looking here lately and the prices dont reflect this pile up.
- 3 years ago
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bigred5
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purplefox
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that is a very scary image. i can imagine mountains of rusting cars piled high in years to come - even more so when we eventually run out of fuel. the whole car industry needs to begin scaling down... maybe during the credit crunch is a good time to begin.
- 3 years ago
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purplefox
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stuburns
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the auto companies don't need a bailout like the one they just got...they need to have a fire sale to recoup their losses. don't get me wrong, I am all for the UAW, their jobs are tedious and dangerous. it's when the execs whine about their bottom line when they have multimillion dollar salaries...cut the prices on these oversized land yachts...or better yet, give them away to families who have no transpo. greedy bastards....
- 3 years ago
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stuburns
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bansheewail
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2 for1?? GMC's at the Dollar Store? Can I still finance that dollar?? Nope. Nevermind.
- 3 years ago
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bansheewail
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AveryMoore
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bansheewail:
bansheewail writes,
"2 for1?? GMC's at the Dollar Store? Can I still finance that dollar?? Nope. Nevermind."
Exactly right.
It's bad enough that for decades we've subsidized the car companies to manufacture obsolete junk as cars but to add far deeper insult the banks - now flush with voter tax revenue are refusing to offer car loans.
See the Rachel Maddow piece on that one.
Banks now don't need the business?
No. Now not THAT business.
For some odd reason they seem to think the economy is about to tank, they'll never get their car loan money back, so they'll just sit on their hands, [assign themselves fat bonuses?] and play deaf and dumb.
This, by the way, is a near perfect replay of the 1930's when banks suddenly became hyper prudent about trusting other people with money. Usually - their own.
- 3 years ago
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AveryMoore
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MediaOcre
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This is the universe's way of dealing with Mankinds misdirection of the Earths current condition..and its a karma response to the car salesmans attitude that has abounded for decades..we all have been victims of their deceptions....
The oil companies should bail out or loan money to the car companies..as they have been in cahoots with them for years producing gas guzzlers for all their profits as we all know... as one example 40 billion in profits for the oil companies during the last quarter collectively. They can afford to help there friends and our economy or these auto firms will just end up as CORPORATE CORPES...which is probably justified according to the survival of the fittest routine...
Google TESLA electric car ...lets underwrite this kind of alternative development not the same old same old junk...... - 3 years ago
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MediaOcre
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Mancer
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MediaOcre:
I agree with you there. Just watch who killed the electric car. GM had them years ago. but killed them off because big oil said so.
- 3 years ago
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Mancer
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bwianator
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Recycle them and make new, more efficient cars, and a greater quantity of them.
America is still in a place where we make our decisions based around the major money holders, but soon we will do what is best and most efficient for all. - 3 years ago
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bwianator
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nessie00
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Traffic jam! Let's sink them and hopefully reefs will appear over time.
- 3 years ago
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nessie00
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asherp
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It's because they suck.
People do not by shitty cars.
- 3 years ago
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asherp
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jszygiel
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good, pile up, damn car salesmen leeches ! i feel bad for the auto companies , but blame it on the salesman!!!! i hate them!
- 3 years ago
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jszygiel
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bornproof
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jszygiel:
sounds like you got one hell of a deal on your last car purchase.
- 3 years ago
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bornproof
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TomBeaker
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115 days of inventory, seems like the perfect time to put the big 3 through a fast bankruptcy to cut out the legacy costs.
They could be producing again before the dealers run out of cars.
- 3 years ago
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TomBeaker
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gaba1985
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Dont be selffish to "car company" sell them cheap, and u will help to reduce carbon dioxit, becouse new cars better then old engine.
- 3 years ago
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gaba1985
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Mancer
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If they big 3 get the bailout then every tax payer owns a piece of these cars already. I say we open a non-profit in every city and allow every single person the chance to call and have a car delivered for their shopping needs. No more need for taxis, and sharing a car is far cheaper since we would only be paying for gas. SPREAD THE LOVE!
- 3 years ago
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Mancer
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trth2pwr
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I say everyone who needs a ride, head to the pier and start a car jackin! It's all part of the bail out plan, steal a car and the government has one less lemon on it's hands, and if you get arrested, go to congress and beg for a bail out, remind them the other criminals they have bailed out recently and your request should be a minor issue easily remedied with a slap on the wrist or court ordered community service, washing these unsold cars?
- 3 years ago
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trth2pwr
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AveryMoore
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trth2pwr:
In the shot above, anybody see any reason to claim there's no good land left in America for farms or homes?
- 3 years ago
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AveryMoore
