February Sales

One of our sponsers, a high-end dealer, just told me Saturday that in maybe 20 years in the sports/exotic car business he has never seen the market in such a weird condition.

He mentioned that several out of town people have actually made substantial deposits on cars (thinking that they were a great bargain since things were so far depressed) and then just walked away without saying a word. The incredible thing is that his dealership usually has kept a policy of returning deposits no questions asked if a deal got into trouble - and yet these people still got cold feet and ran away never to be seen again.

I suppose you could have had a super-great deal on a Duesenberg back in 1936 or 1937 too - if you could pay the freight.

 

Thanks.
Our town came close to canceling the Fourth of July celebration this year.

 

Jim,

I don't know if you remember but I put up a blog post a short time ago about how Ferrari didn't use the traditional rules of supply and demand in their business model. I said their business would always be fine because they produce less cars than the amount demanded etc. etc.

You commented about how severely their demand was dropping (something like 50% over last year).

Well it appears I may have to go back and revise my post...and by revise I mean erase everything and start from scratch.

I can't believe how badly the high end companies are getting murdered.

I went into the used exotic dealership I work at during the summer, and oddly, they said February was one of their best sales months in a long time in terms of number of cars sold. I'm not sure if thats an indicator for the used exotic market as a whole, or they just happened to have a good month. What do you think, is the used market picking up because of all the dropping prices, maybe buyers are deciding its as good a time as any to get a deal on a Ferrari?

P.S. Thanks for putting the numbers up every month. Appreciate being kept up to date on the sales numbers.

 

BMW's 2008 profits down by 90%.

http://www.allheadlinenews.com/articles/7014397125

 

Regarding Hyundai:

Consider the financial impact from people that will return their cars under this program, and I'm sure the number crunchers at Hyundai have figured it costs + / - the same as a typical program offering discounts, cash back, financing, etc. My assumption only, however.

Just a matter of how you want to spend your promotional dollars and the public perception of the program. Interested to see how it works for them.

 

Never thought I would say this but Hyundai is starting to make a good quality car and improving their vehicles every year. They have carefully followed the Japanese and German automakers good experiences and failures. I always wondered if the 100,000 warranty would cost the company dearly. Supposedly that 100,000 mile warranty on these vehicles is not costing the company more money because the cars are holding out well. I thought this would definitely doom the company and overwhelm their service department.

We will see how many people actually have to return their cars. I think this is a genius program for Hyundai as they want to have as many cars out to improve their branding. When one sees a lot of a certain car make on the road the perception is that it must be a good car and sales increase. I don't think this program would work for Toyota or Ford for example because they already sell a 100,000 cars. Hyundai is tryng to be a major player. Hyundai may lose a few bucks but it may help their bottom line in the future. Hyundai is a marketing machine and it may work. I am very curious if the other smaller companies will follow suit.

 

Correct me if I'm wrong but I seem to remember that Hyundai got into some financial trouble when they entered the US market by offering easy credit to marginal borrowers a lot of whom defaulted.

 

How's that?

 

Prevailing wisdom is that they make more from brand marketing than they do from car sales.

 

Wise many says giant tea leaves follow hard rains.

 

Indeed, car sales have been hovering at break-even even at full capacity, now they have the Cali albatross when pre-ordered deliveries are down a conservative 30%.

Marketing bs has inherent diminishing returns, when every putz in China is wearing a Scuderia cap backwards global sales will drop. Ferrari's Western appeal is competition dependent, at a time when F1 has become a very, very bad joke... The engine rules, for example, are more spec than NASCAR's: What's the difference of a "Ferrari" spec racer and a "BMW" spec racer?

It might not be a perfect storm, by the wind is surely blowing, the sails have not been set correctly and Monte's down below 'charming the ladies'.

 

I just read the Harley article and they did not mention Harleys purchase of MV Augsta from Cagiva. This gives them an entry into the sport bike class with a great name. They should have bought Husqvarna as well but BMW snapped that up. Both of these market segments are growing and not getting hit as hard as the crusier segment.

I think Ferrari needs to get back to it's roots and make lighter simpler cars. There seems to me to be a big hole in that part of the market.

 

You are on the money about lighter cars. If only, Ferrari and Mazda could merge and produce a slightly larger Miata (increase the wheelbase from 91.7 to the classic Ferrari wheelbase of 94.5) with a alloy-block turbo six that weighted 2,500 lbs and looked like an updated old school California, damn. Double damn.

To paraphrase an old saying, when it comes to sports cars for the street, it is the motion of the ocean (i.e., how it drives) that counts, not the size of the ship (i.e., going 200 mph).

Dale

 

IMO a smaller, lighter Ferrari with a straight six would be a heck of a car but I doubt that they'd risk the perceived hit to brand image. A return of the Dino would be a smart move.

 

Not sure of the UK figures but yesterday went to the Aston Martin Dealer in Derby, they said for the past month they have sold 28 cars (20 new, 8 used) and last year they sold 128 cars total (new and used).... kinda threw me, said that most if any cancellations in orders have resulted in other people picking up the order and taking delivery...

 

Bring back the Mondial and put a four banger in it, up front...

 

Where's my prozac......

 

...[Whoosh]?

 

A modern 3liter V-12 would be magnificent, in something the size and weight of an S2000 it could be fantastic.

...Pity, there are no enthusiasts in the Ferrari top ranks.

 

Someone hasn't studied history...