i’m not sure that’s the case because while they are making premium on the few cars they sell that quantity is way off the norm. Not to mention how much they’re having to pay for used cars when you trade them in.

 

Yeah, the volume is way down. Last week I watched the "Supply Chain Crisis" documentary on the Science channel and they said there are 50% less new vehicles produced today compare to pre-covid. There is a factory in Taiwan that supplies over 50% of the world semiconductors. At the start of COVID automakers saw dwindling demands for new vehicles so they sharply cut down on their orders of semi-conductors. By the time demand started to pick up it was too late to get the much needed chips as orders are backlog for months.

 

Cmon you don't think they're more than making up for the high trade in values on the way out either for sale from their own lots or auction off? They are FOR PROFIT businesses.

 

that’s true I agree with that but I do believe they’re making less money overall due to less units sold both new and used.

 

Many folks seem to believe that but I have my doubts. So many larger dealers in northern NJ are completing MAJOR renovations during this "chip shortage". HHmmmmmmm

 

I don’t believe that there is any kind of chip shortage.

 

I'm with you my friend. Seems the industry has just figured out a way to exponentially increase profit margins and they'll be running with this model as long as the consumers are willing to overpay.

 

People are driving less so their service revenue is down but this shocked me. For the year 2021, Lexus reported U.S. sales of 304,476 vehicles, up 10.7 percent on a volume basis from 2020 and in 2019 their US sales were 298,000. So I don't think they are hurting today. Hard to imagine when you go to a dealership and they have no new cars on their lot. My salespeople said this will be the new norm. They pay floor plan interest on cars sitting on their lot. A high priced vehicle sitting for two months will eat up $1,000 in profit. In today's world on new cars they do not have that much profit in a new sale. They are making their profits in service and used cars.

 

I am with you. Furthermore I believe birds aren't real

 

Have you been driving in rush hour lately? I feel there is more traffic these days than before the pandemic hit.

 

You would be wrong, but you're free to believe what you want.

 

This is true in my area. The trains are running at about 20% capacity, though.

 

I think he is being sarcastic. At least I am hoping. heh.

 

Yep that likely suggests most folks still working remotely were formerly using public transportation. I see the New Jersey Transit parking lot not far from where I live is 90% vacant still every day. That services commuters who used to commute into NYC every day.

 

Floor plan interest is reimbursed by the manufacturer to the dealer with "holdback" money. A certain percent, different from each manufacturer, is given to the dealer to compensate them for the interest charged until the vehicle is sold. This is considerable money.