Wow...Financial Analysts' say we have reached "peak" car - Alfa Romeo Stelvio Forum
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post #1 of 13 (permalink) Old 06-02-2019, 11:06 AM Thread Starter
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Basically predicting 3% annual market losses.

I think the downturn in sales globally has more to do with high prices and inability to repair making a majority of buyers worldwide not want to spend on new cars. If the industry can find a way to allow DIY and sell something actually interesting AND reliable that is less than the annual income of most buyers......sales will return. (US new car price averages at $34k, current US census record put 50% of the populace earning $30k or less per year. Worldwide prices seems to hold. New cars cost more than half of what workers analysts dont see that as a significant problem is amazing to me. Or maybe it's part of why they are predicting long term shrinkage...)

Yes Uber and ride sharing services effect, but fact remains no one aspires to using ride sharing. It is something done for conveniance or need, it isn't what most people dream about. Course with registration, and insurance plus the cost of the car, isnt hard to see why people use Uber instead.

Regardless, cruddy that markets are being predicted to shrink so much globally. The scary part is there was no mention of growth from EV sales like there normally is...

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post #2 of 13 (permalink) Old 06-02-2019, 12:06 PM
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They are predicting the China trade tariffs will make it worse too ....
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post #3 of 13 (permalink) Old 06-02-2019, 12:18 PM
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This is still weird to me: About 1/3 of my friends kids don't have a license or want one until they are forced to get one. This includes kids in college. We are in Texas. Outside of DFW, Houston, Austin and San Antonio, Public transport is almost non-existent. Cost seems to be the biggest factor.
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post #4 of 13 (permalink) Old 06-02-2019, 05:26 PM
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A long time ago, a high school kid could buy a cheap beater, maintain it, and pay next to nothing for insurance.

Can't do that anymore.

Kids these days are making a rational, market-driven decision. Cars are way too expensive to buy and too complex to maintain. Basic transportation that costs as much as your annual income? The math doesn't work. Besides, this generation has nowhere to go -- they spend their lives staring at tiny screens.

'Course, this doesn't apply to toys like Alfas.
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post #5 of 13 (permalink) Old 06-02-2019, 07:20 PM Thread Starter
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Unfortunatly it does apply to toys. This is across the board including luxury sales and SUVs....the market is very bad.

Spent the morning talking to dealership GMs at 5 different major lots. From Ford to Mercedes I was told they have a 120 day supply or more of every model even the "best sellers" at current sales. Dealers want a 60 day supply maximum. I was told at both a Nissan and BMW dealer it is so bad they had to freeze shipment of any new models and go rent additional storage space because the new cars were taking up space for service, meaning they couldn't take in new cars for repair. Which is where the profit is even when sales are good. These are not small places, these a nationally owned multi-line dealers in the LA market where getting extra real estate is VERY expensive.

At the BMW dealer he told me they contacted BMW and asked for LESS new Z4s (the BMW Supra) on thier allotment. They expect the car will increase showroom traffic only. Very pessimistic and scary comming from a dealership general manager when talking about a well publicized new vehicle launch. If other dealers feel the same BMW has a serious problem.

I've seen the thing with kids now not getting a lic or being interested in cars. Most of the ones I have really been able to talk to, it comes down to being (in thier heads) completely out of reach. Like why I could care less about the new hot actress or whoever...I'm not ever going to date her...if she meets me she'll just think I'm old and, dont care.

Young people arent stupid they can see that they will probably have a job earning maybe 30-40k a year "doing good". With rent at 2k a month or more, $100 cell phone, 75 for internet, plus, plus, plus,...making a $500 payment on a nice car is unrealistic. IMO the reason kids spend so much time staring at screens is because after work/school there is nothing else they can afford to do. Including visit friends in person, going outside always winds up costing money.

More so the next generation doesnt like compromise. So the classic, just buy a POS till you can get better doesn't work for them. For better or worse 20somethings today dont spend money on things they dont enjoy and aspire to. They do without instead. They do without cars cause they are not worth the money being asked for the most part.

Example from my family.

28 year old nephew is a car nut like me. He drove hand me downs till he could afford an A3. Got in an accident and totalled the car recently. Insurance paid it off but that is it. Did he get a new car? He went and looked at Mazdas and Nissans, Ford, Subaru, everything...thought they were all cheap and sloppy feeling. Liked Alfa alot but also wants to have a house before he dies. Decided he would rather put more into saving for a house and have some extra money to eat out at nicer places then pay what is being asked for "half-assed engineering with stupid kiddie iPads glued onto a dash and bs apps (his words)." To him the basic car felt like junk, leather and subwoofers dont make it drive nicer they just distract from that, and $30,000 is too much to pay for distractions. The $40k plus for an Alfa is just too much period for him.

That is typical now.

Ev's are not going to help this. The industry is shooting itself in the foot and dealerships agree. They dont want an EV, they want an affordable (under $25K), well engineered, entertaining to drive, attractivly designed vehicle to sell, but no one is making one.

Gonna get darker till that changes.

Especially since it isn't just kids looking at inexpensive cars. Most of my friends and family are not buying new cars regardless of age or income. They all say the new ones are too expensive, and they like what they already have better than the new models. I know a few people who want Alfa's but they are waiting till I've put 50k on to see my experience. Life is too expensive, even making mid 6 figures, spending more than $30 thousand on one thing is a big commitment to not really be that happy.

Get an affodable car that can accelerate with some authority, be fun, comfortable to sit in, and fit 4 adults, convince people it will be it turns around in a couple years. Toyota almost did it with Scion till people figured out other than the FRS, they drove like crap and none of them had any power....
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post #6 of 13 (permalink) Old 06-03-2019, 07:40 AM
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The issue is market saturation. The problem is oversupply due to many market and technology attributes. Vehicle useful and reliable lifespans are now easily 100K plus miles and average age is 10+ years. Look at Nissan dumping product and days inventory as a huge problem. The only answer is reduced numbers at better margins and differentiation... Fewer units at higher margins. Alfa has nailed it in theory but it is hard to introduce a new brand in a crowded market with entrenched players and honestly the statute of limitations was nearly past for the brand (those with emotive experience and affinity had nearly aged out- at least in North America). The passing of Sergio Marchionne, whose pet projects were AR and Maserati will challenge the commitment level because the cost to an already strained balance sheet is huge. The key will be consumer acceptance and loyalty and of enthusiasts as the market is much more about fashion than practically. We early adopters are the key and explains why Alfacare is paying so much attention and why the chronic complainers are sinking the ship by whining and peeing in the well. Remember: the market is cruel and punitive in a buyers market which is why the future depends on loyalty and emotive acceptance of the brand.

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post #7 of 13 (permalink) Old 06-03-2019, 10:58 AM
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Scale hit the bullseye! When I was a kid in the 60's, my dad rolled over the car every 3 yrs and before 60K miles because that was when all the repairs began to happen. Move forward a decade and it was 75K miles and 3-5 years. Move into the 90's and it was 100,000 miles and 5+ yrs. Fast forward to 2019 and cars easily go 100000 with nothing more than basic service. Above that point things can start to happen, but rarely is it major till 125-150K miles. 7-10 yr old cars are still VERY reliable if serviced properly. There is a huge abundance of 50-100,000 miles used cars available for the masses. Thank the leasing market for that. All the folks driving over their REAL financial abilites has an effect down the line. Even I buy top shelf and keep them as long as they behave for much longer than I used to unless something new catches my fancy. I have never had a 9-10 year old vehicle need anything major.

Companies that build junk will not be rewarded. Companies that make products that look dated quickly will not be rewarded. Even the punks buying the used stuff know what to stay away from or what they aspire to wins over the practicality of the Asian, boring ride. The millenials got held back by the recession as their upward mobility was neutralized. This to shall pass. We are in transition to alternate forms of powertrains. That too, is making people hold back as their criteria are not yet being met. When I can drive my 373 mile trip non-stop at 75-80 mph and have the usual 50 mile+ reserve for the accident etc...I'm in too. Also when hybrids don't have to weigh 500+++ lbs more.

A major reason why I am so harsh on the few....I want Alfa to succeed!!!
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post #8 of 13 (permalink) Old 06-03-2019, 04:16 PM
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To succeed, AR needs to sell a lifestyle and image. MB, BMW, Audi and Lexus are fashion and image sales. Otherwise why would normal folks with better then average salaries pay for them. AR is about driving dynamics, style and passion. They need to spend some major cash on advertising to get Americans sold on that image.

Back in the late 80's AR dealers where few and far between, and the cars very rare on the road. I bought a 1986 GTV6 used in 1990 from an AR dealer who mostly sold Chrysler and a few AR spiders. ( I saw my first GT6 at Cleveland auto show in 86, sitting all by itself next to a Maserati, and fell in love with it. I was lucking enough to ultimately buy the exact car used) Over the 3 years of driving it daily, I never saw another one on the road. I would constantly be asked what it was. AR really does not have an image in the US, and really never did. That all needs to be established.

As for new owners complaining. I see Scales point on that. The good thing is, if you go to Edmunds and look at the reviews for the 2018 Stelvio you see mostly positive remarks and almost a perfect 5 stars overall. (last I checked) In contrast, check out the owner ratings for the 2019 Acura RDX, just recently updated, 3.6 stars. Looks like Honda messed up on the infotainment system. Just our modern world.

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post #9 of 13 (permalink) Old 06-11-2019, 12:56 AM
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Scale and Viscount are way off the mark. AlfaOffroad pretty much nailed it.

I'm probably one of the youngest guys on here and most of my friends are up to a decade younger than me and I'm the token mechanic in our circle so I help everyone buy cars. People my age and younger are doing the math and new cars are a stupid purchase. When it comes down to a choice between more infotainment or making your rent payment, infotainment is stupid. When it comes down to a choice between the "lifestyle" a car offers and a grocery bill, "lifestyle" is stupid. When you're looking at the reality that you're going to pay a year's salary for something that locks you out of even simple maintenance like an oil change warning computer reset, buying a new car is stupid. Car makers have painted themselves into a corner where they aren't making what people actually need at this point, which is a basic car that's reliable, simple, and has a very low total cost of ownership.

Looking for a new car for me in late 2017 and for my wife in early 2019, we were *APPALLED* at the offerings. Compared to when we bought our last cars in late 2004 and early 2007, you're getting not a god damned thing that's better but you're paying $15k or more for the exact same level of car. Looking at the exact same cars we bought in the previous cycle, the stuff on offer today is heavier, has a smaller engine, has a worse type of transmission, is less able to be repaired outside the dealership, and yet costs almost 2x as much. The money has gone into the stupid infotainment systems, stupid features that no one needs, and more computerization that does nothing but break more often. I think the 2005-2008 era will eventually be seen as the pinnacle of car engineering because, while some features like driver aids have improved, overall the cars just aren't as good and cost more.

It's fine to offer luxury brands like Alfa and Maseratti for people who are privileged enough to not have to worry about the price of the car vs the price of gas/food/housing/healthcare. However, they are, full stop, luxury items and you can't then turn around and whine about slow sales in an economy that's seeing an ever-growing number of people unable to afford a luxury car. Watching trends, this is only going to get worse as the minimum viable product for a car is going to get more expensive, not less. Even if you strip out the infotainment and other useless electrification (I'm looking at you, stupid self-opening/closing tailgate!), complying with crash safety regs (which no one should weaken or compromise on!) and complying with pollution regs (which thankfully most people are realizing shouldn't be compromised on or weakened) simply costs more than it used to. There's some slop to add $5k of engineering costs to a $50k car. There's no room available to add $5k of engineering costs to what needs to be a $15k car. The econoboxes that were the mainstay of highschool, college, and young professional drivers are just going to be priced out of the market and you'll end up with an entire class of working people who can't afford to drive.
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post #10 of 13 (permalink) Old 06-11-2019, 07:50 AM
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"The econoboxes that were the mainstay of highschool, college, and young professional drivers are just going to be priced out of the market and you'll end up with an entire class of working people who can't afford to drive."

there was someone on the giulia forum who switched from an Alfa to a new Khia at lease end, because he wanted to save $ to buy a house.
it must be tough for young people now, because they think they "need" new.
used cars used to be pretty normal for people wanting to save; my Dad was almost 50 when he bought his first new car, and I've sure had plenty of used/cheaper cars over the years - but NEVER a new econobox.
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