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The demise of the OEMs
- Thread starter Buckminster
- Start date
Doggydogworld
Active Member
Nope. Other OEMs recognize revenue upon sale to the dealer, but they track and report end-user sales. Some are up, some down but overall Q1 sales grew a a few % y/y and are forecast to grow a couple percent for the full year to just under 16m vehicles. Tesla's sales slump is indeed Tesla-specific. 16m is a good year overall -- boom time peaks see 17-17.5m while the depths of the financial crisis in 2009 only saw 10m sales. Plain vanilla recessions are 13-14m. The "Covid years" of 2020-22 ranged from 13.7-14.9m.
This article gives some summaries of other OEMs.
makes sense as the dealer is the next owner, middle man, but all of that inventory sitting at the dealers is recorded as sold
tesla's parking lots of Ts are under the category of inventory, not sold
apple to oranges
Hm. That guy owns a dealership (albeit used cars) and also talks with many other dealerships (new and used vehicles). Somebody is wrong.
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Doggydogworld
Active Member
Legally and financially the sale to the dealer happens when the factory loads the vehicle on the truck or train
GM immediately counts those sales as revenue on the income statements it files with the SEC
But these "2nd day after the quarter ends" press releases count sales to end users, not sales to dealers
Here is the US Q1 press release directly from GM. The headline is "Retail Deliveries Off to a Fast Start". It also talks about sales to government entities. There is nothing about sales to dealers, because that's not the point of this press release. It later says "534,479 vehicles in inventory". Dealers own those cars, not GM. This press release is all about dealer inventories, dealer sales to end customers, direct sales to fleet/government end customers, incentives end customers receive, etc. That's the stuff the stock market wants to know. The market doesn't care about GM sales to their dealers, because (as pointed out) that number lags too much and can be easily gamed.
I didn’t know all their dealers would report so quickly.
This videos says basically legacy auto will be cutting back. Such a disconnect. Will be interesting if this come true.
Looks like there will be some disruption in the auto industry.
RobStark
Well-Known Member
Average new car payment is $738.
Give someone a 27% discount and they will switch.
27% is not nothing.
27.5% tariffs are not the limit. The Chinese know this. They have a 40% tariff on the Model S and Model X.
Doggydogworld
Active Member
Dealer inventory is the collateral for the floorplan loan. GM, F, etc. know the minute that title transfers to the end customer.
Possibly… if the floor plan loan to the dealer is provided by the OEM. Which based on an article from a couple years ago, less than half are. Majority were provided by other banks. But maybe it’s higher now.
Doggydogworld
Active Member
Ford plays accounting games. A classic MBA 101 method divides products into 3 groups:
- Dogs - low/no growth, low profit
- Cows - low/no growth, high profit
- Stars - high growth, (eventual) high profit
- Stop valuing us at 10x our overall profit of 4-5b
- We're two businesses - cash cow SUV/pickups that earn 9-10b/year....
- ....plus a fast-growth BEV business worth 80-100b like money-losing Rivian or early Tesla
It was a lovely pitch. It dangled the tempting proposition that Ford might spin off their BEV business, generating huge fees for the investment banks the analysts work for. It also gave Ford a massive incentive to move costs out of their SUV/pickup cows into their BEV "stars". Which I'm certain they did. How much did they move? No way to know.
Of course the entire dog/cow/star pitch is in trouble today, with Ford's "600k/year" BEV growth goal in tatters and Rivian's stock down 90%. But it sounded great a couple years ago!
General Motors reports strong first-quarter profits as prices help offset small US sales dip
Despite a small dip in U.S. vehicle sales, General Motors’ first-quarter net income rose more than 25% on strong deliveries of pickup trucks and other higher-profit vehicles.
apnews.com
GM earnings top forecasts, company raises outlook and sees 'variable profit' in EV unit by year-end
GM results beat expectations as the automaker cited a "resilient" consumer driving sales and profits higher.
Ford tops Q1 earnings expectations, sees full-year profit 'tracking to high-end' of guidance
Ford reported first quarter results after the bell that beat expectations on Wednesday, with its changing product game plan front and center along with its focus on gas and hybrid offerings.
Toyota hits record annual output, sales on robust demand
TOKYO (Reuters) -Toyota Motor said on Thursday its global sales and production hit record highs in the year ended March 31, supported by robust demand and the absence of semiconductor supply constraints it had to endure in recent years. Still, Toyota plans to delay the start of its electric...
Toyota Output, Sales Hit Records as Demand Counters Scandals
Toyota Motor Corp.’s output and sales hit records in the financial year that ended in March on strong demand and as semiconductor supply problems eased.
www.bloomberg.com
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Doggydogworld
Active Member
Ford Q1 US BEV sales were +86% y/y, to 20k+. But that's sales to end customers. These revenue charts are based on wholesale to dealers. They barely shipped any Lightnings to dealers in Q1 2024. Partly due to production issues, but mostly dealers needed to clear out old inventory before stocking up on the new ones.
Look at Q2-Q4. Wholesale was 34k + 36k + 34k = 104k vehicles. They reported 15k + 20k + 26k = 61k customer sales. Add 10% for Canada/Mexico and it's about 68k, which means inventory grew by 36k vehicles.
Now look at wholesale Revenue. It was around 50k/unit from Q2-Q4 and then........ 10k in Q1??? Wait, what? Ford sold Lightnings and Mach Es to dealers for 10k each? Well, obviously not. They actually sold 10k BEVs to dealers at 45k or whatever each but had to rebate ~350m on the old inventory so dealers could finally move it. They can't go back and restate prior results, so the 350m comes out of this quarter's revenue.
350m / 36k old inventory = 10k per unit. That's what they had to pay dealers to move the old, overpriced inventory.
Look at Q2-Q4. Wholesale was 34k + 36k + 34k = 104k vehicles. They reported 15k + 20k + 26k = 61k customer sales. Add 10% for Canada/Mexico and it's about 68k, which means inventory grew by 36k vehicles.
Now look at wholesale Revenue. It was around 50k/unit from Q2-Q4 and then........ 10k in Q1??? Wait, what? Ford sold Lightnings and Mach Es to dealers for 10k each? Well, obviously not. They actually sold 10k BEVs to dealers at 45k or whatever each but had to rebate ~350m on the old inventory so dealers could finally move it. They can't go back and restate prior results, so the 350m comes out of this quarter's revenue.
350m / 36k old inventory = 10k per unit. That's what they had to pay dealers to move the old, overpriced inventory.