Eastern Railroad Discussion > Automobile traffic - current status?

For much of this year, I have seen what I perceive as 'normal ' autorack traffic on the rails. Although I am not in the market for a new car, there is a Chevrolet dealership that I pass by regularly that for most of this year, has had virtually no cars for sale on their lot. At first, I accepted it as a reality of the chip shortage that was widely reported on earlier this year, but now that we are 9 months into the year, it has been increasingly shocking to me that they don't have cars on the lot to sell. Is this the reality across the board at many dealerships or is this one an anomaly?

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P Wrote:
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> For much of this year, I have seen what I perceive
> as 'normal ' autorack traffic on the rails.
> Although I am not in the market for a new car,
> there is a Chevrolet dealership that I pass by
> regularly that for most of this year, has had
> virtually no cars for sale on their lot. At
> first, I accepted it as a reality of the chip
> shortage that was widely reported on earlier this
> year, but now that we are 9 months into the year,
> it has been increasingly shocking to me that they
> don't have cars on the lot to sell. Is this the
> reality across the board at many dealerships or is
> this one an anomaly?

Not an anomaly. There is still a huge shortage of new cars with no end in sight.

The chips auto makers use are obsolete and there's only one plant in the world still making them.

They can either redesign the car's electronics or wait for their turn on the production line. Either option will take years to come to fruition.

I'm in Louisville, Ky. where Ford has two assembly plants, the Louisville Assembly Plant that produces the Ford Escape, and the Kentucky Truck plant that produces the Ford Expedition, the Super Duty trucks, and the Lincoln Navigator.  A lot of vehicles are produced here.  Ever since they announced the chip shortage, Ford has been storing vehicles in just about any place there is a level spot.  A mall that has a closed Sear store has several hundred stored near that store.  Another mall had some space for a while and Ford had hundreds of vehicles there.  In Buckner, a community about 15 miles from the truck plant, they have practically every inch of the county fairgrounds covered with trucks.  The Kentucky Motor Speedway is about 70 miles from Louisville and there are thousands of Fords stored there.  These are the places that I know of.  Our state fair wrapped up about two weeks ago and that facility has parking for 40,000 vehicles, however, there are events going on there constantly so only a portion can be used for storage.  There must be some chips arriving because I can drive to the Kentucky Truck Plant and watch CSX drag about 100 autoracks out of that plant every evening  I am not sure how many the Louisville Assembly Plant is producing but I know they have a capacity of about 75 vehicles an hour. If the chips ever become available, a lot of places are going to have a lot of empty parking spaces available.

John

Yep, most car lots I see have lots of asphalt for sale.

My son recently purchased a new truck to replace the 2002 that he got from me. Dealer had a vehicle for test driving but nothing else on the lot. He was able to purchase one that was "in transit" to the dealership, took about a week to recieve the vehicle. As a side note beware of the "market adjustment" cost that some dealers are attempting to use. They tried to get him for $4995. He more or less told them he was not falling for it, that other dealers were not doing this.
i know back to railroading. I have an occasion here in central Florida to see a CSX train and the last one I saw had auto racks for half the consist. Something must be moving/selling.
CR

At the RFI/Miami Valley Railfans meetup in Union City Indiana last Saturday we observed one train, which had some loaded auto racks
headed east. I'd estimate about 10 racks. Whenever I drive on I-69 to northern Indiana to visit relatives, I see plenty of car carriers with
new Silverados from the Roanoke, IN assembly plant, which is working overime shifts. Demand for new vehcles must be off the charts
if these plants can't keep up.

People I know who have recently retired from the GM Roanonke/Ft. Wayne Assembly plant told me there's not just a chip shortage, but
various electrical parts, wiring harnesses, etc. that are hard to get. 

Whenever I go for routine service at the Chevy dealer where I bought my Silverado, invariably the salesman who made the sale to me stops
by the waiting room and asks if I want to sell it back! 5 years old/60000 miles and he me offered $35000.00 last month....Never see anything
like this...

About 37 days inventory on dealer lots right now, compared to the usual of 65-70.

Dealers seem OK with that as there's less competition, more opportunity to sell expensive add ons.

Manufacturers are building fewer stripped down base models.

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Lackawanna484 Wrote:
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>
>
> Manufacturers are building fewer stripped down
> base models.
>
> Posted from Android

And I just got a super deal on a very low-mileage 2019 Chevy Equinox (which had been a one-lease vehicle). It was affordable because it did NOT have all the electronic bells and whistles such as lane assist and automatic braking that today's market demands. The deals are out there if you look.

Art House

Lackawanna484 Wrote:
-------------------------------------------------------
> About 37 days inventory on dealer lots right now,
> compared to the usual of 65-70.
>
> Dealers seem OK with that as there's less
> competition, more opportunity to sell expensive
> add ons.
>
> Manufacturers are building fewer stripped down
> base models.
>
> Posted from Android

The problem with stripped down models is there is so much stuff that is required by law...back up camera....anti lock brakes....etc....that it costs little to sweeten it up some more but they can still charge you a premium because you THINK you are getting the souped up version....when fact is...they are all at least that well equipped. And todays young car buyers think if they are getting CarPlay in their new car that they have the luxury version, never mind...it's not leather...it's not AWD...etc....

Heath_Tower Wrote:
-------------------------------------------------------
> At the RFI/Miami Valley Railfans meetup in Union
> City Indiana last Saturday we observed one train,
> which had some loaded auto racks
> headed east. I'd estimate about 10 racks. Whenever
> I drive on I-69 to northern Indiana to visit
> relatives, I see plenty of car carriers with
> new Silverados from the Roanoke, IN assembly
> plant, which is working overime shifts. Demand for
> new vehcles must be off the charts
> if these plants can't keep up.
>
> People I know who have recently retired from the
> GM Roanonke/Ft. Wayne Assembly plant told me
> there's not just a chip shortage, but
> various electrical parts, wiring harnesses, etc.
> that are hard to get. 
>
> Whenever I go for routine service at the Chevy
> dealer where I bought my Silverado, invariably the
> salesman who made the sale to me stops
> by the waiting room and asks if I want to sell it
> back! 5 years old/60000 miles and he me offered
> $35000.00 last month....Never see anything
> like this...

Yes.  News reports today about Ford on CNBC and The Wall Street Journal reporting that parts besides chips are in short supply and vehicles are stored waiting to be finished.

Lackawanna484 Wrote:
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> About 37 days inventory on dealer lots right now,
> compared to the usual of 65-70.
>
> Dealers seem OK with that as there's less
> competition, more opportunity to sell expensive
> add ons.

Careful.

The Wall Street Journal story you cited recently in another thread, and that I think you are recalling in writing this post, was not a particularly well-written story. It mixed discussion about new dealer procedures that Ford has for electric vehicles (EVs) with less clear discussion about the applicability of those procedures to conventional internal combustion engine vehicles (ICEVs).

Previous thread referring to the WSJ article: https://www.trainorders.com/discussion/read.php?2,5542474,page=1
Scroll down to the 19th post in this thread.

WSJ article link (paywall likely): https://www.wsj.com/articles/ford-reveals-new-ev-selling-rules-to-dealers-11663170525?mod=Searchresults_pos1&page=1

A better summary of the Ford dealer meeting in Las Vegas where CEO Jim Farley laid out the new dealer procedures in The Detroit News, which I realize to which you may not have had access (likely behind a paywall): https://www.detroitnews.com/story/business/autos/ford/2022/09/14/ford-its-dealers-you-have-choice-make-ev-sales/10361158002/

The meetings were really much more about Ford dealers' sales and support procedures for EVs than they were about sales procedures for ICEVs. Ford, which is moving aggressively towards EVs across its product line, has taken a hard look at the direct sales model of Tesla and other EV producers relative to the traditional dealer-sales model, particularly a bargained-sales approach. It wants its dealers to move into the space where there are more direct EV sales, more EV pre-ordering, less or no bargaining for EVs, and good support for EVs. Including fairly steep standards for employee technical training for sales and service, and installation of fast charging stations. At a dealer cost of up to $1-million. But it is less clear as to whether the new standards for EV sales will also apply to ICEV sales.

Said The Detroit News article: "Ford dealers will have three choices. They can opt not to sell EVs. They can become certified to sell EVs under a new set of standards. Or they can go all in and become a "certified elite" EV dealer."
Said Ford CEO Jim Farley: "The main message that I have for the dealers, which I've never said before because I never believed it was true, is that you could be the most valuable franchise in our industry." But he also said, "You have to pick."

The article also mentions, without detail (other sources have more detail), how Ford is moving toward three primary business groups for design, production, marketing and sales: Ford Blue, its legacy business; Ford Model e, its EV business; and Ford Pro, its commercial vehicle business.

But even The Detroit News article does not really give a clear, black-and-white answer as to whether the new sales and service model for EVs will also be applicable to ICEVs.  Nor the degree to which that may be, and how much freedom its franchised dealers will have to sell ICEVs by more traditional sales models. Including lots of inventory on the lot, and bargaining with customers.

Other articles about Ford's plans for new standards for selling EVs. Some of these articles get pretty granular about the new dealer expectations for sales of EVs. But none also really settle the question in a clear, hard-edged way about the applicability of new EV sales standards to continuing sales of ICEVs. None of these were behind paywalls for me:
https://www.thedetroitbureau.com/2022/09/ford-requiring-dealers-to-plug-into-new-rules/
https://electrek.co/2022/09/14/ford-sets-new-dealers-requirements-in-order-to-sell-evs/
https://arstechnica.com/cars/2022/09/ford-tells-dealers-electric-vehicles-must-have-transparent-set-prices/

If it's not entirely clear as to whether new EV sales standards will apply to ICEV sales, it is clear that there is enormous, wrenching change going on in the automotive industry, among both manufacturers and dealers. The change process will probably not be easy, clean or quick. It will probably quite incremental, with successful and unsuccessful new approaches implemented and continued, or dropped. It may be more differentiated and market-segmented than it is now, as it appears that it will be for Ford.

It will be for the auto industry what the transition from steam to diesel was for railroading - and then some. And it seems likely to be a wild ride in any case.

Beware of sweeping statements about changes in the industry. The devil, and the angels, really are and will be in the details.

MC



Edited 1 time(s). Last edit at 09/20/22 15:47 by ironmtn.

Thanks for a thoughtful and detailed local view of a complex situation.



37 days inventory, from Cox, is fairly lean. But getting customers to design their own cars online and get a firm price takes the local dealer out of the driver's seat.

Posted from Android

Lackawanna484 Wrote:
-------------------------------------------------------
> Thanks for a thoughtful and detailed local view of
> a complex situation.
>
>.
>
> 37 days inventory, from Cox, is fairly lean. But
> getting customers to design their own cars online
> and get a firm price takes the local dealer out of
> the driver's seat.
>
> Posted from Android

Ford has been allowing customers to design their vehicles for years now with the Build and Price online feature. The dealer will still get a cut and not have to buy and store the vehicle on site, which has other benefits for the dealer. Interesting to see Ford push the dealers to get with the EV program. There must be quite a bit of foot dragging by the dealers for things to get to this point. Dealers are going to need technical and sales staff that are more capable in the electronics, electrical and IT fields and it's going to cost them in salary, training and infrastructure.

My bother in law is still waiting on his Mach-E, which has been ready for two months now(supposedly) in Mexico. Loaded on a train ten days ago headed to Richmond. 

Even the lower cost stripped down models have the same chips in them as the higher priced loaded versions. Only difference is missing components as most wiring harnesses are set up for all options. Cheaper to make them all the same . ---------- Ken 

DevalDragon Wrote:

> Not an anomaly. There is still a huge shortage of
> new cars with no end in sight.
>
> The chips auto makers use are obsolete and there's
> only one plant in the world still making them.
>
> They can either redesign the car's electronics or
> wait for their turn on the production line. Either
> option will take years to come to fruition.

Not sure you know what you are talking about. I work for an automaker. The chips used by automakers are not obsolete. Please list you source about the automaker chip obsolesence. The chips are being produced on allocation. Some automakers are managing the chip shortage better than others. Next year should look brighter for the auto industry for chip supplies, just about the time the economy is tanking in recession.  

My brother and I were traveling to Cass WV to ride the railroad there when he had an alternator failure.  We managed to get to the Honda dealership in Ashland, Ky and when we got there, they only had one car in the showroom.  It was a late-model Ford Mustang.  They did not have one new Honda on the entire lot  They only had a handful of used cars.

John

There's an article in today's New York Times about the auto industry's current situation. One expert sees the industry lowering production, while another says the car makers are fixated on market share.  Nobody wants to give up share, not even for greater profitability.

No mention about what might happen  when wiring harnesses, auto chips, etc are delivered, but I've seen reports that making those final adds to the hundreds of thousands of stored cars will jolt the new car market.  Still, many of them are going to take a train ride. Soon or later

Nothing to do with chips, but I've seen UP manifest trains carrying a significant number of auto frames recently on the Sunset route westbound.  Have not seen many frames on this line in the past.  Guessing they come from Mexico, for....?   

memphisfreight Wrote:
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> Nothing to do with chips, but I've seen UP
> manifest trains carrying a significant number of
> auto frames recently on the Sunset route
> westbound.  Have not seen many frames on this
> line in the past.  Guessing they come from
> Mexico, for....?   

Yes, Mexico, guessing they're headed to Toyota at Tijuana. Lots of truck frames out of Mexico these days, for instance to GM Arlington...

JG

Ford truck frames USED to go to Norfolk VA...but Ford unceremoniously closed that plant though at the time it was an attempt to stave off bankruptcy which swallowed both GM and Chrysler. It still saddened me...