German experts new cars will be 50% cheaper

GDHazy

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Does he speculate that this is because of the drop in demand for cars in general? It's certainly a possibility, but the outcome is not that the cars today will be 50% cheaper - it's that the only cars left are the cars that are cheap, and everyone is driving SUVs. Anecdotally, There are 10 households in my extended family, and only mine has cars. Everyone else has SUVs. So it is plausible if the trend has a very high ceiling.
 
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Here is the translation.

German experts: New cars are up to 50 percent cheaper


German experts advise buyers to wait with the purchase of a new car, because certain models will probably be much cheaper.

Almost all car dealers and leasing companies in Germany are closed and demand is falling due to the crisis. The German car market shrank by nearly 38 percent in March 2020 as a result of the corona crisis. Car experts from our neighboring country therefore expect that there will be high discounts for buyers.

According to market analyst Ferdinand Dudenhöffer of the University of St. Gallen (Switzerland), dealers are dealing with large stocks of cars that they do not sell. This is partly because in a number of cases dealers are obliged to purchase cars, while it is unclear whether and when they will find buyers. In addition, bankruptcies threaten numerous car companies.

Need for security

"The car market in Germany will experience a massive slump this year," said Dudenhöffer. "It can only be mitigated with smart offers that don't put the customer at great risk." According to him, an option is a car subscription, whereby customers, due to the uncertain economic prospects, only have to commit to one provider for six months. According to him, buyers do not so much need bargains, but security.

Nevertheless, large discounts are inevitable for the car industry. Models of which a huge stock has been built up and which only take up space for dealers, are, according to Dudenhöffer auto expert, a lot on offer. "Discounts of up to 50 percent are not inconceivable," the expert told the German weekly Focus. Although the Dutch car market is different from the German one, the consequences of the corona crisis can also be reduced here. prices will lead.

Production is now going down. Approximately 4.7 million cars were still produced in Germany last year. Dudenhöffer expects it to be 3.8 million this year.
 

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More chance in Trump believing global warming is real that a 50% drop in car pricing
yes, but there will be a large drop. Buy a 7-8% Annuity with $50K wait for 7 years then it will pay for whatever car you want, forever. I have done that. Bought me a new Taycan- and a Volt, and a 991.



Chuck J
 


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i think he meant they will be 50% cheaper to build , as robots will take over most human task, the car companies will use this Pandemic to Replace most people with robots citing Health and safety concerns.
 

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i think he meant they will be 50% cheaper to build , as robots will take over most human task, the car companies will use this Pandemic to Replace most people with robots citing Health and safety concerns.
The Taycan manufacturing is already automized to a very high degree. There are several good videos from the factory on LinkedIn and Youtube on the subject ...
 


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i think he meant they will be 50% cheaper to build , as robots will take over most human task, the car companies will use this Pandemic to Replace most people with robots citing Health and safety concerns.
No, he is saying large inventories may create pressure to drop prices up to 50% clear out dealer inventory. I doubt that. I do know of a Toyota Dealership that pre-ordered for their five locations and all their cars, still shink wrapped, are sitting the parking lot of a closed shopping mall. I love my 997 but I'd gladly take a new RAV4 Hybrid for $18k!

"According to Dudenhöffer, models with a huge stock and only take up space for dealers are very much available. "Discounts of up to 50 percent are not unthinkable," the expert told German weekly Focus. Although the Dutch car market is different from the German one, it is only that the consequences of the corona crisis will also lead to lower prices here. Moreover, the Dutch have bought cars en masse in Germany in recent years and that will probably be no different when the corona crisis is over."
 

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yes, but there will be a large drop. Buy a 7-8% Annuity with $50K wait for 7 years then it will pay for whatever car you want, forever. I have done that. Bought me a new Taycan- and a Volt, and a 991.



Chuck J
I leased cars frequently and I would take a similar approach. Leverage the low lease rate. Put the residual/buy out amount in an index fund at the end of 3 years, 39 or 42 months buy out the vehicle and still have a profit in the index fund. Once I was very lucky that a neighbor kept asking me when I was going to sell my car. My lease was up, I negotiated a lower buy out due to the excess mileage, which they waved as a "loyalty bonus" paid for the car, sold to my neighbor for $8k profit and had $70k in the index fund. win-win-win situation. Neighbor was very happy. Dealership was happy with two sales. I was very happy with a 997 C4S Cab that I paid for in cash. :)
 

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No, he is saying large inventories may create pressure to drop prices up to 50% clear out dealer inventory. I doubt that. I do know of a Toyota Dealership that pre-ordered for their five locations and all their cars, still shink wrapped, are sitting the parking lot of a closed shopping mall. I love my 997 but I'd gladly take a new RAV4 Hybrid for $18k!

"According to Dudenhöffer, models with a huge stock and only take up space for dealers are very much available. "Discounts of up to 50 percent are not unthinkable," the expert told German weekly Focus. Although the Dutch car market is different from the German one, it is only that the consequences of the corona crisis will also lead to lower prices here. Moreover, the Dutch have bought cars en masse in Germany in recent years and that will probably be no different when the corona crisis is over."

If we look back @ post 2008 when ford stock was @ 2.00 and on the brink of bankruptcy and their logo and brand name up as collateral to help stay afloat ( and yes the goverment forced alot of money on them) , never were prices 50% off. you could not buy a jaguar for 50% off instead what manufacturers did was give you a a whole bunch of over priced incentives and or options to. Additionally they pushed these cars to dealers and their dealers families with these great offers.

In my view, buying a new car at 50% off is like buying gold jewelry at a mall @ 75% off. they mark it up so much that you think its a great deal, but anyone can check the spot price of gold @ any moment. similar to throwing in a " Center Console Armrest with Porsche Crest Porsche Exclusive Manufaktur which normally cost $450" but really cost them $15.00

Another thing to consider is the negative affects a 50% sale has on a brand, If you have a one time sale of 50% off, the reality is you will probably do it again and again, and over time people will just wait till you have that end of season 50% till they buy from you. Simply put % off Sales tarnish brands. Have you wondered why Apple does not have sales? Instead of sales they give you headphones and other high margin items to encourage you to buy on black friday. Now they have moved into giving you Cash back when purchased with the "Apple" credit card.

Porsche and other german companies at this point are 50% engineering and style and 50% brand, your buying a status when you buy these cars. There is no way they will tarnish their brand name by selling cars @ 50% . Especially when Porsche is in such a strong financial portion , they have the fire power ($)to ride this out. And they will without any dents to their brand "Porsche Exclusive Manufaktur".
 

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Your, or at least my, station in life, my status, is not elevated by "things." My only measure of people is how they treat others. WRT cars, I simply loved my first Porsche, love my current Porsche and will love my next Porsche. Looking at a Porsche, especially the 911, you can see the car is smiling at you and I cannot help smiling back. Driving my 911 makes me smile. I still recall, a few years ago, driving from Denver to Seattle, due to snow and high winds wind, that drive took 22 hours. I arrived home, took a short nap, showered, joined the Porsche club for a four hour tour drive. After a 22 hour drive, I know of no other car that would made me want to get back in and go for a four hour pleasure drive. None, and I've driven everything. Even when I work on a Porsche I smile. Engineers have done things to make things easy... by far the easiest vehicle to do a break job, oil change, change a light bulb, etc.
 
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lucan6699

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I leased cars frequently and I would take a similar approach. Leverage the low lease rate. Put the residual/buy out amount in an index fund at the end of 3 years, 39 or 42 months buy out the vehicle and still have a profit in the index fund. Once I was very lucky that a neighbor kept asking me when I was going to sell my car. My lease was up, I negotiated a lower buy out due to the excess mileage, which they waved as a "loyalty bonus" paid for the car, sold to my neighbor for $8k profit and had $70k in the index fund. win-win-win situation. Neighbor was very happy. Dealership was happy with two sales. I was very happy with a 997 C4S Cab that I paid for in cash. :)
so i read this with interest and wondered if i could ask some questions. I am in the UK btw. So with the index funding of the residual/buyout amount.... i assume this still carries an element of risk if the index goes down or you need to cash out at a precarious time? i can see index's doing well if investing now, but what if it is high when investing and then low at the cashout point. Thanks for your views
 

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Interesting and good question. I never lost money across the index funds... It was not a single, one time, investment though and the money was spread across Fidelity funds (low load) in one "cars account." Most recently the money was in; Fidelity 500 Index Fund (FXAIX), Fidelity Total Bond Fund (FTBFX)., Fidelity Inflation-Protected Bond Index (FIPDX), Fidelity Select Utilities Portfolio (FSUTX). My "cars account" has grown considerably. Had a great year last year but will be a miss this year--hoping for a wash between this and last year. When yield on bonds swung, prices dropped so I rebalanced. I added more to utilities, fuel costs decreased, people will continue to pay for utilities.
 
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lucan6699

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Interesting and good question. I never lost money across the index funds... It was not a single, one time, investment. They are Fidelity funds in one "cars" account. The funds in a blend of Fidelity funds most recently; Fidelity 500 Index Fund (FXAIX), Fidelity Total Bond Fund (FTBFX)., Fidelity Inflation-Protected Bond Index (FIPDX), Fidelity Select Utilities Portfolio (FSUTX). My "cars" account has grown considerably. Had a great year last year but will be a miss this year. When yield on bonds swung, prices dropped so I rebalanced. I added more to utilities, fuel costs decreased, people will continue to pay for utilities.
thanks, i see now. so similar to spreading pension payments to make good to balance out the downs? and a certain amount of knowledge in the 'markets' obviously. Interesting, and something to have an active interest i am sure. thanks again
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