Subaru BRZ and WRX Sales Are Tanking

[SCRAPPYDO]

Car prices should have gone down post pandemic, but car companies never dialed it back when 'shortages' ended.

A 50k dollar WRX is a laughable joke. Nope, all day long. It is as idiotic as an 90k dollar Tahoe

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[Snow Drift]

Originally Posted by SCRAPPYDO

Car prices should have gone down post pandemic, but car companies never dialed it back when 'shortages' ended.

A 50k dollar WRX is a laughable joke. Nope, all day long. It is as idiotic as an 90k dollar Tahoe

Prices don't go down (besides EVs), neither do wages. It sets a new normal and we adjust.

Best hope is that they offer a new model or lower-trim at the old price.

[dwf137]

Originally Posted by Snow Drift

April's YOY decline is due to politics and uncertainty.

I wasn't talking about that, but the general idea of prices increasing and how the shock wears off. Look at the $10k ADM on cars during the pandemic. People didn't revolt, they paid up.

If all cars go up in price, then that just becomes normal. It doesn't mean monthly lease rates won't be gamed to help out, but the prices will go up (as they always do).

Yes, new car sales are down about 1 million cars each year since 2019. So, even more reason to need higher ASP to increase margins on what is sold. But, the lack of car sales isn't due to prices, it's due to fewer buyers. Kids aren't getting licenses, millions of people died during COVID, etc.

Car sales were abysmal during covid because of supply shortages. Pure supply demand chart. Supply was low, price went up so that demand equaled supply. That limited the auto purchases mostly to idiots who were willing to line the pockets of their dealers.

Today, our issue is the opposite. It's not supply that's killing the sales, it's price. It's the demand side. Price is too high so people aren't buying. So what has to happen? The price needs to go down. But then the US has artificially just jacked up the price of most of our cheapest vehicles by 25%. When we did that in the past (chicken tax) those manufacturers just stopped importing those cars to the US.

Covid deaths did not impact auto sales. 0.3% of our population died. Tragic, but peanuts in the grand scale of auto sales. Kids not buying cars? They still are, they're just delaying it, which results in a net nothingburger.

[samagon]

Originally Posted by dwf137

Car sales were abysmal during covid because of supply shortages. Pure supply demand chart. Supply was low, price went up so that demand equaled supply. That limited the auto purchases mostly to idiots who were willing to line the pockets of their dealers.

or to people who got in an accident that totaled their existing vehicle.

or to people who had life changes that required a different vehicle.

there were a lot of idiots out there though.

prices are still hanging out at supply shortage levels, that's the only good news about a potential market reset, it may help bring prices for all sorts of things back to reasonable.

[dwf137]

Originally Posted by samagon

or to people who got in an accident that totaled their existing vehicle.

or to people who had life changes that required a different vehicle.

there were a lot of idiots out there though.

prices are still hanging out at supply shortage levels, that's the only good news about a potential market reset, it may help bring prices for all sorts of things back to reasonable.

I sure hope it brings prices back down! Seems like they're going to go up in the near term though. I'm curious what it's going to look like in 2 years when my Ioniq lease is up...

Since the pandemic I bought 4 different vehicles. Leaf which was eventually replaced for the Ioniq5, a Highlander, and my BMW 135i convertible. Sold my VW Golf R, Outback, and a motorcycle. I timed things perfectly. Bought the Highlander for a steal right after covid hit and dealers were just trying to offload everything they had. Bought the Leaf on 0% financing with additional off MSRP. Leased the Ioniq for an absolute steal. BMW was bought cash at 5K less than asking. People paying ADM for cars was just because they were stuck looking for something in particular. There were plenty of deals to be had out there on cars without ADM, but if your heart was set on buying a particular vehicle, ADM was the reality.

[Snow Drift]

Originally Posted by dwf137

Car sales were abysmal during covid because of supply shortages. Pure supply demand chart. Supply was low, price went up so that demand equaled supply. That limited the auto purchases mostly to idiots who were willing to line the pockets of their dealers.

Today, our issue is the opposite. It's not supply that's killing the sales, it's price. It's the demand side. Price is too high so people aren't buying. So what has to happen? The price needs to go down. But then the US has artificially just jacked up the price of most of our cheapest vehicles by 25%. When we did that in the past (chicken tax) those manufacturers just stopped importing those cars to the US.

Covid deaths did not impact auto sales. 0.3% of our population died. Tragic, but peanuts in the grand scale of auto sales. Kids not buying cars? They still are, they're just delaying it, which results in a net nothingburger.

15.9 million cars were sold in the US in 2024. Even if that is down, it's still 15.9 million. Cars will sell with higher prices...once that price is the norm.

[dwf137]

Originally Posted by Snow Drift

15.9 million cars were sold in the US in 2024. Even if that is down, it's still 15.9 million. Cars will sell with higher prices...once that price is the norm.

I mean, sure, but that's only if people give in. Currently, they're not. We just had the worst sales month, worse than 2009. Remember what happened to the auto industry in 2009?

I think the auto industry is in for a big shift. A 50k wrx is a red flag, imo.

[Snow Drift]

Originally Posted by dwf137

I mean, sure, but that's only if people give in. Currently, they're not. We just had the worst sales month, worse than 2009. Remember what happened to the auto industry in 2009?

I think the auto industry is in for a big shift. A 50k wrx is a red flag, imo.

2008/9 lead to Subaru's dominance and profitability, while everyone else lost money.

[Russ_G93]

Apparently the new Normal is the diminishing of the middle class. Either Rich "enough" to have an EV (Charge the vehicle at a owned Home) or you can't (because you don't own a home). Doing the young dirty like this isn't going to help anyone in the long-run (Buying Power wise).

[dwf137]

Originally Posted by Snow Drift

2008/9 lead to Subaru's dominance and profitability, while everyone else lost money.

Indeed. But now they'll have a 25% tariff to half of the cars they try to sell here for the foreseeable future. Not starting out on a great foot.

[Snow Drift]

Originally Posted by dwf137

Indeed. But now they'll have a 25% tariff to half of the cars they try to sell here for the foreseeable future. Not starting out on a great foot.

All of their cars will be tariffed as the SIA cars use Japanese parts.

Tariff or not. USMCA or not. All cars will go up in price. No one will keep today’s prices when their competition is more expensive.

If we are going into a recession, and all cars are more expensive, then we know that Subaru thrives as a lower-cost/trusted option.

[JustyWRC]

Originally Posted by Snow Drift

All of their cars will be tariffed as the SIA cars use Japanese parts.

Tariff or not. USMCA or not. All cars will go up in price. No one will keep today’s prices when their competition is more expensive.

If we are going into a recession, and all cars are more expensive, then we know that Subaru thrives as a lower-cost/trusted option.

This is what I think was a huge factor in what got Subaru moving back then. Conquest buyers from higher priced cars trying to be frugal. Then discovering that Subaru offers a pretty dang good vehicle at a better price. I think a similar thing will happen again. Conquest buyers are still rolling in. Granted, my location lends more to the conquest buyer. When I started at this retailer, the only one for at least a 2 hour drive, we sold 191 cars all year. Last year we sold 1900 in this market between our two stores.I ask every customer if they've had a Subaru before(helps me avoid trying to tell them something they already know and can concentrate on the newer stuff) and, for a couple/few years now, I get much more people that are getting their first one. I just think the overall package of a Subaru will stand out when people look.

[samagon]

Originally Posted by Snow Drift

2008/9 lead to Subaru's dominance and profitability, while everyone else lost money.

Yeah, cause they had affordable, decent sized vehicles.

There's some affordable, and some decent, but the overlap of the two isn't quite there.