Auto prices are coming down (reprise)

Daily Data: Prices go down, sales go up!

In today’s dispatch:

• a funny thing about auto sales

• some OEMs did better than others

• more discounts and better prices

• increased supply is part of the story, but not the whole story

• are new cars for the wealthy only? Maybe yes for now, but probably not for long.

---

👉👉👉Reminder to sign up for the Weekly Recap only, if daily emails is too much. Find me on twitter, for more fun. 

Auto prices are coming down (reprise)

Random Walk continues to see the auto market as a microcosm for asset-prices generally.

It’s by no means a perfect analogy, but what I generally mean is that is that after some period of illiquidity-enabled denial, car prices are gradually coming down to levels that consumers can actually afford.

This is no great calamity (hopefully, although I suppose it depends on the degree of leverage), but it is reality. Or the delayed onset of reality. And it’s driven by the same thing that’s bringing other asset prices down (whether they’re marked down or not): the lagged and variable certain effects of higher rates.

Again though, this is no calamity. It’s quite the opposite of calamity, really.

Building-and-pricing to market is a sign of strength. It reflects the adaptability of well-managed firms, and the continued “resilience” of consumers, who can still buy things, just slightly smaller and cheaper things than before.

Sales are still below prepandemic levels

The first thing you notice about cars, is that sales are still not back to prepandemic levels:

Cox Automotive

Sales were on the way towards recovery, until interest rates knocked the industry flat and down, and then . . . sales have started to recover again.

Some OEMs really stood out.