Should we expect major incentives b/c of Corona

[kglassic]

In my line of work I see a ton of businesses suffering, and i mean badly. All due to Corona and people staying in. Even real estate brokers say the same way good weather gets folks into houses, Corona keeps them out. Reastaurants -> ouch. Have not been to the movies but looking at box office Mojo I see they havent broken 100K since mid February.

Question: Doing plunging sales usually encourage incentives from car manufacturers? I cant think of last crisis like this.

It all depends on how long the factories are closed. People are still buying right now with the new incentives introduced because of the virus and no vehicles are being produced. If that continues for 30+ days then inventories will be down. The low interest rates will drive most of the business for the foreseeable future and additional incentives will not be needed.
Inventory numbers are what drives incentives and that is on a regional basis.

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[viper88]

It all depends on how long the factories are closed. People are still buying right now with the new incentives introduced because of the virus and no vehicles are being produced. If that continues for 30+ days then inventories will be down. The low interest rates will drive most of the business for the foreseeable future and additional incentives will not be needed.
Inventory numbers are what drives incentives and that is on a regional basis.

There is probably at least 90 days supply. Probably more because of the incentives and left over 2019s. I think 90 days inventory is widely consider ideal for car companies. All car companies are reporting stalled sales. I don't know if idled factories tell the whole story? Will there be a recession? Will people be scared to spend money? In 2009 there were huge discounts and a lot of dealers going out of business. I don't know if this crisis is worse economically then 2008-2009 or not? I am going to guess it is because of the recent response from the White House. There will definitely be some blood shed and fire sales if this is true.

 

[Sine Language]

I ordered my vehicle back in late January and it finished being built, but has been sitting somewhere with the delivery date getting pushed back more and more. I've honestly been thinking about whether I want to take on a new vehicle loan, given how things might be.

However, if Jeep does decide to introduce 0% APR for 84 months, there is absolutely no way I would pass that up. So the delays on my order vehicle is actually a good thing, as it gives it more time for this to be possible.

 

[Sohm Wan]

let it burn, let it burn, let it burn! one person's trash can be my treasure.

 

[VNT]

It all depends on how long the factories are closed. People are still buying right now with the new incentives introduced because of the virus and no vehicles are being produced. If that continues for 30+ days then inventories will be down. The low interest rates will drive most of the business for the foreseeable future and additional incentives will not be needed.
Inventory numbers are what drives incentives and that is on a regional basis.

A 7 yr loan is not an incentive, just another dumb thing GM and Ford started and now FCA is following. Stopped by local store, freinds with owner and some techs. Sales are tanked, service very slow everyone is staying home and not getting cars repaired and very little sales traffic. dealers are upset that FCA is not putting cash on the hood, no one wants a 7 yrs loan but many coming in with cash and then walk out when they find out no rebates. The dealers and FCA need cash buyers to generate cash flow, and got news for you but these type of customers dont care about 7 yr loans and the folks who do 7 yr loans aint going to be buying cars.

 

[viper88]

A 7 yr loan is not an incentive, just another dumb thing GM and Ford started and now FCA is following. Stopped by local store, freinds with owner and some techs. Sales are tanked, service very slow everyone is staying home and not getting cars repaired and very little sales traffic. dealers are upset that FCA is not putting cash on the hood, no one wants a 7 yrs loan but many coming in with cash and then walk out when they find out no rebates. The dealers and FCA need cash buyers to generate cash flow, and got news for you but these type of customers dont care about 7 yr loans and the folks who do 7 yr loans aint going to be buying cars.

I agree. A cash buyer wants a cash rebate or incentive to knock down the selling price.

 

[Notorious]

...one person's trash can be my treasure.

SO WRONG

 

[Andy2434]

A 7 yr loan is not an incentive, just another dumb thing GM and Ford started and now FCA is following. Stopped by local store, freinds with owner and some techs. Sales are tanked, service very slow everyone is staying home and not getting cars repaired and very little sales traffic. dealers are upset that FCA is not putting cash on the hood, no one wants a 7 yrs loan but many coming in with cash and then walk out when they find out no rebates. The dealers and FCA need cash buyers to generate cash flow, and got news for you but these type of customers dont care about 7 yr loans and the folks who do 7 yr loans aint going to be buying cars.

BINGO with respect to cash purchases. With checkbook in hand, I was looking for scorched earth deals, so to speak, when purchasing my last 2 vehicles.

 

[Adamoni]

I would rather see cash incentives but there is value to many buyers in 0% loans and it usually spurs on purchase a bit so there is value to seller also. At this point there should probably be both.

 

[kglassic]

BINGO with respect to cash purchases. With checkbook in hand, I was looking for scorched earth deals, so to speak, when purchasing my last 2 vehicles.

As someone who would benefit greatly from additional incentives, I'm not sure we can expect anything more exciting on the Wrangler. I don't want to be negative here but in the short term (60-90 days) it's just not necessary. Jeep has 74 days' stock of Wranglers on the ground and less than 1000 still being shipped. We typically have inventory of 120 days plus by May 1 in preparation of the summer selling season. With the factory closed those numbers will get worse before they get better. More on this later...

FCA is planning to 'progressively restart' plants beginning May 4 (already a 3 week delay from the April 14 date previously set). Needless to say, the dealers won't start seeing new inventory until the end of May for some models and much later for others. The vehicles we get from Mexico and Canada could be delayed further as U.S. car companies do not have complete autonomy outside our borders and those factories may take longer to reopen. Jeep has 82 days supply of Grand Cherokees, 84 days' of Cherokees, less than 60 of both Renegade and Compass and a whopping 103 days' supply of Gladiators

A number of consumers as well as experts have referenced the 2008 mortgage bubble and recession that followed. Although the Coronavirus panic is not yet over, the differences are significant from an auto industry standpoint. New vehicle inventories were bloated in 2008-09 and the factories kept producing long after the bottom had fell out. The car companies and dealerships learned from this and paid a steep price (they won't let it happen again). Thousands of dealerships closed and although it was unfortunate at the time, it has made the industry much stronger.

If this Coronavirus storm lasts long enough to cripple the auto industry we'll have more than incentives and discounts to worry about. They'll have to convert all the factories to make more toilet paper.

 

[Andy2434]

As someone who would benefit greatly from additional incentives, I'm not sure we can expect anything more exciting on the Wrangler. I don't want to be negative here but in the short term (60-90 days) it's just not necessary. Jeep has 74 days' stock of Wranglers on the ground and less than 1000 still being shipped. We typically have inventory of 120 days plus by May 1 in preparation of the summer selling season. With the factory closed those numbers will get worse before they get better. More on this later...

FCA is planning to 'progressively restart' plants beginning May 4 (already a 3 week delay from the April 14 date previously set). Needless to say, the dealers won't start seeing new inventory until the end of May for some models and much later for others. The vehicles we get from Mexico and Canada could be delayed further as U.S. car companies do not have complete autonomy outside our borders and those factories may take longer to reopen. Jeep has 82 days supply of Grand Cherokees, 84 days' of Cherokees, less than 60 of both Renegade and Compass and a whopping 103 days' supply of Gladiators

A number of consumers as well as experts have referenced the 2008 mortgage bubble and recession that followed. Although the Coronavirus panic is not yet over, the differences are significant from an auto industry standpoint. New vehicle inventories were bloated in 2008-09 and the factories kept producing long after the bottom had fell out. The car companies and dealerships learned from this and paid a steep price (they won't let it happen again). Thousands of dealerships closed and although it was unfortunate at the time, it has made the industry much stronger.

If this Coronavirus storm lasts long enough to cripple the auto industry we'll have more than incentives and discounts to worry about. They'll have to convert all the factories to make more toilet paper.

Life for MANY will be very different on the other side of this Rona event. As such, I doubt that whether someone can purchase/least a brand new vehicle will be in many families' financial equations. There will definitely be more serious concerns to deal with.

 

[viper88]

As someone who would benefit greatly from additional incentives, I'm not sure we can expect anything more exciting on the Wrangler. I don't want to be negative here but in the short term (60-90 days) it's just not necessary. Jeep has 74 days' stock of Wranglers on the ground and less than 1000 still being shipped. We typically have inventory of 120 days plus by May 1 in preparation of the summer selling season. With the factory closed those numbers will get worse before they get better. More on this later...

FCA is planning to 'progressively restart' plants beginning May 4 (already a 3 week delay from the April 14 date previously set). Needless to say, the dealers won't start seeing new inventory until the end of May for some models and much later for others. The vehicles we get from Mexico and Canada could be delayed further as U.S. car companies do not have complete autonomy outside our borders and those factories may take longer to reopen. Jeep has 82 days supply of Grand Cherokees, 84 days' of Cherokees, less than 60 of both Renegade and Compass and a whopping 103 days' supply of Gladiators

A number of consumers as well as experts have referenced the 2008 mortgage bubble and recession that followed. Although the Coronavirus panic is not yet over, the differences are significant from an auto industry standpoint. New vehicle inventories were bloated in 2008-09 and the factories kept producing long after the bottom had fell out. The car companies and dealerships learned from this and paid a steep price (they won't let it happen again). Thousands of dealerships closed and although it was unfortunate at the time, it has made the industry much stronger.

If this Coronavirus storm lasts long enough to cripple the auto industry we'll have more than incentives and discounts to worry about. They'll have to convert all the factories to make more toilet paper.

Thanks for the insight from the inside.

 

[Dkretden]

As someone who would benefit greatly from additional incentives, I'm not sure we can expect anything more exciting on the Wrangler. I don't want to be negative here but in the short term (60-90 days) it's just not necessary. Jeep has 74 days' stock of Wranglers on the ground and less than 1000 still being shipped. We typically have inventory of 120 days plus by May 1 in preparation of the summer selling season. With the factory closed those numbers will get worse before they get better. More on this later...

FCA is planning to 'progressively restart' plants beginning May 4 (already a 3 week delay from the April 14 date previously set). Needless to say, the dealers won't start seeing new inventory until the end of May for some models and much later for others. The vehicles we get from Mexico and Canada could be delayed further as U.S. car companies do not have complete autonomy outside our borders and those factories may take longer to reopen. Jeep has 82 days supply of Grand Cherokees, 84 days' of Cherokees, less than 60 of both Renegade and Compass and a whopping 103 days' supply of Gladiators

A number of consumers as well as experts have referenced the 2008 mortgage bubble and recession that followed. Although the Coronavirus panic is not yet over, the differences are significant from an auto industry standpoint. New vehicle inventories were bloated in 2008-09 and the factories kept producing long after the bottom had fell out. The car companies and dealerships learned from this and paid a steep price (they won't let it happen again). Thousands of dealerships closed and although it was unfortunate at the time, it has made the industry much stronger.

If this Coronavirus storm lasts long enough to cripple the auto industry we'll have more than incentives and discounts to worry about. They'll have to convert all the factories to make more toilet paper.

This is FANTASTIC information and exactly opposite of what I was assuming. I assumed that dealers had a LOT of excess inventory now. Your great info here is going to require me to re-calibrate around the industry. THANK YOU again.

 

[Sohm Wan]

exactly, i wished this cat-ass-trophy did not occur. but it did. and i am not going to shoot a gift horse in the mouth. taking what i can get, probably giving nothing back. so hopefully, value of the Jeep Wrangler 2020 Sport S/Rubicon value drops in my location, especially with the packages i am looking for. first time buyer, long time wanter.

 

[TxJeepers]

0% for 36 months on a Wrangler is only good for those with a lot to put down. Your monthly payment could still be huge. If they bumped it to 84 months at 0%, gave me 90-120 days before the 1st payment, included all models and my dealer still let me get it 5-7% below invoice, well that would be great. 0% is awesome and I can always pay it off sooner than the 84 months (something you should always do regardless).
But, trade in values aren't what they used to be. Just too many out there anymore.
It will be interesting to see what happens in the fall when brands like Jeep normally roll out next model year. Will we see incentives then. Will the market be normalized by then. So many questions.

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