Toyota Dealers have 3400+ “New” 2023 or older cars on lots

Some dealers bought inventory of in demand cars from other dealers and have to get over msrp to break even. The floor plan financing costs for the new old stock can be significant as well.

 

Maybe it needed that much of a discount in the old days. Somebody has made a bet that it doesn't work like that anymore. I see signs that they... aren't wrong.

 

Odd.
Our Toyota Dealers all have limited stock.
Their cars are selling like hotcakes!

 

Last year my CFO's 2012 GMC started showing signs of age related decline.
We've all seen this on TV more than once over the last eight years or so.....
SO....she started using our 2020 on a daily basis and she instructed me to immediately start sourcing a new Yota pickup.
I asked for a repeat of the instruction because I wasn't quite sure that I had heard her correctly.
Verification completed, I waited an appropriate amount of time (measured in milliseconds) and immediately began a THREE MONTH search for my first new Toyota since swearing a blood oath in 1989 (*) that the Earth would be orbiting a cold, dead star before I EVER bought another Toyota again.
I tried very hard to buy a new Toyota truck, but it would seem that Toyota is trying even harder to keep price conscience purchasers out of their showroom floors. I purchased my 6th(?) new GMC in a row, secure in the knowledge that if I have to replace the transmission or put a new crate engine into the thing that I will still be money ahead - especially since I had to borrow money for this purchase at over 5%.

Lessons Learned:
1. Car inventory aggregators sell clicks, NOT cars - nor even accurate information about cars (cars.com is the worst of these.)

2. If a product is free (kbb, truecar, cars.com, autotrader) YOU are the 'product' but these aggregators can be used to zero in on a dealership's individual web site for fine scale fecal elimination.
Expect many errors in listing - especially if you are looking for a NEW new car instead of a 'programme' car, used car, fleet return, etc....

3. If you think you need to buy a new Toyota, DO NOT limit yourself geographically with one exception!
Under no circumstances should you consider buying one from the SE Toyota group no matter how attractive the price may seem to be up front.
Some areas of the United States are blissfully unaware that other parts of the US 'may not' be prospering equally under the current regime, and some models that are extraordinarily popular in some geographical areas are less so in others. Primes and 4x4 trucks are good examples of these. A hopped-up TRD 4x4 with a cat-back system, beadlock rims and a gooseneck hitch 'may' have about the same utility on the left coast as a Prime does in Big Sky country.
This means that a smaller dealership in the rust belt mave better inventory for YOUR car than one of the big city lots.

4. An airline ticket is cheaper than paying $2000 more than you have to for a car, but a phone call is cheaper than an airline ticket.
I've tried three times in the last 31 years to break my oath by purchasing a Toyota because the Japanese USED to be the best car manufacturers on the planet, although the Koreans have them beat lately and the ChiComms and others are in the hunt.
I have an open mind about Yotas because they ARE good cars - even if they are supported by a dealership network that seems to be more interested in the 'Art Of The Deal' than they are of being good corporate citizens - if there IS such a thing.

5. Supply chain issues are still a 'thing.'
I saw several new vehicles that were red-lined on the dealership lot for parts that needed replacement but were not available.
I was tempted to try to buy one of these but the dealership's management nixed that attempt - which was foolish.
If a dealer cannot get a part.......

6. My new GMC full-sized truck has been in use for nearly a full year and it is performing well above my expectations - albeit at 1.5 MPG below that of the smaller Taco that I tried to purchase instead - so perhaps the greatest lesson is not to be brand loyal if the brand isn't loyal to their customers.....and to my eyes, approximately NONE of them ARE.


(*) This, before I learned:
"..... 'Do not take an oath at all, either by heaven, for it is the throne of God, or by the earth, for it is his footstool, or by Jerusalem, for it is the city of the great King'"

 

Holding back the less popular ones and doling them out a few at a time is a great way to preserve the appearance of that status for longer than it is true.

I'm sure there are going to be some savings to be had on these cars, but they aren't going to be deep discounts. The used market is still on fire and provides plenty of upward pressure on the prices of cars like this.

 

Dealers here will store overstock on under used parking lots, which don't have to be next to the dealer site. Perhaps they aren't just there because of lack of space at the dealer.

 

When I went to my beloved home state OF Indiana to view the eclipse last week I noted hundreds and hundreds of new trucks being stored in a former industrial site. A family member told me they were shelved for lack of parts......

 

It wouldn't shock me to see a certain percentage of them going into the crusher as-is just to write off in their taxes and preserve the pricing on all the others.

American industry does this with everything from barley to Batman movies.

 

+1

I was thinking the same thing.
After all - they DROVE THEM away from the plant - riiight?

 

If they’re crushed into cubes they could be stacked in pyramids.

 

I'm sure crushing is not first on the list. If they can sell them for $100 below MSRP while the '24s are still >MSRP they will.

Then they'll work on wacky deals, selling them to less regulated overseas markets, maybe get congress to pay 2x MSRP to send them to Ukraine or something.

Then they'll crush what's left into a line on the tax filing.

 

Toyota sales surge to new record in 2023 - Toyota Media Site.

Toyota 2023 report: Record sales, output as chip crisis fades | Automotive News (autonews.com)

Toyota Motor North America Reports March, First Quarter 2024 U.S. Sales | Morningstar
"Toyota set a new record for 2024 1st quarter sales this year"

"For the first quarter, TMNA reported sales of 565,098 vehicles, up 20.3 percent on a volume basis and up 17.2 percent on a DSR basis versus March 2023. Sales of electrified vehicles for the first quarter totaled 206,850, representing 36.6 percent of total sales volume."

 

Toyota sells to dealers in the US, who may not have sold all they got.

 

That's kinda to be expected, if you're looking at year over year results. We're crawling out of the pandemic and people had to get back to work. Two and three car households went down to single car households, because they didn't need the extra cars, expenses, and weren't buying replacement cars. When most everyone needed to get back to work, most people are trying to figure out how to get another car affordability in a higher interest rate environment. We were near zero percent interest for almost a decade and bought everything on credit. People who used to live hand to mouth are now learning a very hard lesson. IMHO

 

Makers - especially Toyota adjust their volume to their Dealer demand.

Toyota Production System doesn't allow a vehicle to be built unless it is requested.
Every Vehicle manufactured by Toyota has a Manifest Document- someone has requested that vehicle.
They wouldn't be setting manufacturing records is someone wasn't requesting the vehicles.
Dealers would not be requesting vehicles/inventory they don't need or can't sell.
Something is not making sense.

Maybe the US Economy is beginning to tank under the runaway inflation, interest rate and consumer debt coupled with US Record Setting Automobile Financing Debt.
Toyota seems to be holding its own- but agree - something has to give under these nightmare economic conditions.

U.S. Consumer Debt Is Out of Control - National - The Black Chronicle

The country is just mirroring the irresponsibility of its government or visa versa

America’s ‘Debt Spiral’ Is Nearing a Critical Threshold (yahoo.com)

 

More than likely dealers are controlling supply and using alleged parts shortages or supply chains issues to justify higher than MSRP prices for their cars. You can sell high volume at low margins or low volumes at high margins. Low volumes allows more 'hand-holding", less customers screaming at you than high volumes.
It's no difference than the Saudi controlling the rate they pump oil out of the ground to maintain a set market price. They've opened their valves in the past when too many OPEC nations were cheating and dumping too much of their oil onto the free market. Flooding the market with cheap oil is their way of controlling those rouge OPEC nations and keeping them in line. Higher prices benefits all OPEC nations; the reason OPEC was formed in the first place
We also see this in gasoline prices when we switch from winter to summer gas blends and back again. Why the blip in prices when factories know that this is going to happen? Doesn't anyone plan anymore?

 

Big companies used to get into a lot of trouble for doing funny games to keep prices high.

But don't assume I mean the manufacturers. A lot of the shadiest stuff is getting done by "auto groups." These companies generally started as a single auto dealer and then bought a few others. Some also own regional distribution rights for certain brands.

These aren't "big companies" as you might think of them, but they have worked their butts off to not be small business anymore. State attorneys general don't want to mess with them- they're campaign donors, after all. But they're also too small for any of the federal regulatory agencies to get involved.

So these companies are too powerful for local & state AGs to help you when they screw you over, but they're too small to get noticed by the Federal antitrust people. They've been supporting local and state politicians for decades, to the point where they are coddled and protected.

I see companies like that doing all kinds of hinky stuff to make supplies look weaker than they are and hold prices higher than they need to be, all while profiting as never before and encouraging everyone to blame somebody else.

 

Some people will do some really weird stuff to be able to claim that they saved $bignumber on their new car, even failing to mention that they traded a valuable car etc.