This Comes As No Surprise

[rforbes]

I wonder how much price increase has to do with the Union settlement on wages and benefits?

There is what the manufacturers say, and what is real. Funny enough, not always the same thing.

Traditionally, prices are set by a pretty typical supply/demand curve. Essentially the cost of something is what somebody is willing to pay for it.

There is a common theme to blame the union and it's workers on the price of a car. But that is ridiculous. The union people aren't telling the manufacturers to focus on $80k+ cars. That is purely the management who is making those decisions. It is clear they don't actually want to build affordable cars, which they absolutely could do. The problem is affordable cars have a much lower markup than the high end vehicles. (e.g. SUVs, trucks, and luxury). They are all burning for that high markup vehicles as investors expect more and more returns, way beyond what used to be expected and what should be expected.

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[rforbes]

I wonder if the fact that they still haven't made any announcement on the 2025 models has an impact on this.

 

[Carnut12]

The prices are absolutely ridiculous. I’ve sold my loaded 392, but I bought it 3 years ago for nearly the same price as a regular 2024 Rubicon X. Dealers haven’t helped, the markups stayed for many months after demand was gone. It’s even worse for Dodge, they will have new 2023 Challengers and Chargers in 2026.

 

[Tokenwasp]

I wonder if the fact that they still haven't made any announcement on the 2025 models has an impact on this.

It probably the other way around. They can't announce 2025s with four months worth of 2024s (and some 2023s) still sitting on dealer lots.

 

[NPC 20883467]

I think Jeep and the Wrangler deserve all the market punishment they get.

Indeed... couldn't happen to a nicer bunch of idiots & crooks.

 

[gato]

I wonder how much price increase has to do with the Union settlement on wages and benefits?

Just so that you know, the final assembly labor content of a typical FCA product is ~30 hrs of $1,800. The labor contract wage increases added at most $200 to the cost of building a Jeep.

People need to understand that cost and price are two very different things. Automakers price their products to maximize the profits on the price x volume basis.

They are trying very hard to make the 2022 crazy prices the new normal. It will not work.

China will devastate their sales in China, Asia and Latin America. In the US and EU tariffs will keep prices artificially high. But all that excess capacity that no longer goes to China, Asia and LatAm will crash prices. In 2 years the market will be very, very different.

 

[alphawolff]

OK...

So Jeep sales are down, Mustang sales are up.

How about some figures on Bronco sales, since that would be relevant?

Top is bronco, bottom is wrangler. Appears bronco is staying steady/slightly increasing while wrangler has been decreasing steadily since 2021. We're selling ~40% less compared to 3 years ago last month, while the bronco has been increasing. It's neat to see how covid effectively cut sales nearly in half for 2 months then incentives brought it right back to higher than before. You can also see where the strike last year took a chunk out of sales as well.

 

[aldo98229]

Someone mentioned the Land Cruiser. Seen a couple around and they look really cool, but they START at $56K. Ridiculous.

I looked into this: Land Cruiser starts at $58,000, incl. destination. By the time you add a power sunroof, navigation and leather seats you are already at $75,000...for a giant SUV with a 4-cyl engine.

 

[Windshieldfarmer]

Stellantis clearly ran the gravy train into the ground. No mechanical improvements in the base 2.0 or 3.6 for 7 years and quality concerns that continue to grow. The world is moving forward….not Jeep. So many new competitors that appeal to occasional off-roaders. Me thinks huge rebates are coming which means current owners will soon experience a large jump in depreciation.

 

[yokramer]

There is what the manufacturers say, and what is real. Funny enough, not always the same thing.

Traditionally, prices are set by a pretty typical supply/demand curve. Essentially the cost of something is what somebody is willing to pay for it.

There is a common theme to blame the union and it's workers on the price of a car. But that is ridiculous. The union people aren't telling the manufacturers to focus on $80k+ cars. That is purely the management who is making those decisions. It is clear they don't actually want to build affordable cars, which they absolutely could do. The problem is affordable cars have a much lower markup than the high end vehicles. (e.g. SUVs, trucks, and luxury). They are all burning for that high markup vehicles as investors expect more and more returns, way beyond what used to be expected and what should be expected.

Just so that you know, the final assembly labor content of a typical FCA product is ~30 hrs of $1,800. The labor contract wage increases added at most $200 to the cost of building a Jeep.

People need to understand that cost and price are two very different things. Automakers price their products to maximize the profits on the price x volume basis.

They are trying very hard to make the 2022 crazy prices the new normal. It will not work.

China will devastate their sales in China, Asia and Latin America. In the US and EU tariffs will keep prices artificially high. But all that excess capacity that no longer goes to China, Asia and LatAm will crash prices. In 2 years the market will be very, very different.

Man its refreshing around here to see people that dont rush right to union bad this is going to make prices go up.

 

[Nitehawk92]

Sadly, I don't see the current management having any clue how to fix things. Executives show no ability for honest self-reflection.

All they plan to do is keep introducing more on-road "Jeeps" to try to grow volume, and that is that.

It seems like the execs priorities are always thinking about how to make more money, not how to make a better product and keep the customers satisfied. Happy customers is the way to make more money...

 

[yokramer]

It seems like the execs priorities are always thinking about how to make more money, not how to make a better product and keep the customers satisfied. Happy customers is the way to make more money...

Clearly its cutting costs, employees and safety, while raising the price until people stop buying then bitch the customers that are wrong.

 

[blackwater]

I think that the down turn on car sales is mostly the economy that we are in right now.
I was at my boat in Discovery Bay on labor day and was shock to see NO buddy around.
Not even boats on the water. Usually there are boat coming and going. The restraint is packed with boater. Theirs fast boats, ski boats and yachts. Put nothing was happening.
I have had a boat at the marina sense 1987 and have never seen it like this on any holiday.

100% correct! The weakest fail first. Even small chain fast food restaurants are failing. Walgreens is closing 100’s of stores, Big Lots, Family Dollar and many more..https://www.timesunion.com/business/article/companies-closing-stores-united-states-2024-19314014.php

It typically takes 2-3 years to feel the pain of economy decision makers and IMHO, it will get a hell of a lot worse.

 

[GinaC]

100% correct! The weakest fail first. Even small chain fast food restaurants are failing. Walgreens is closing 100’s of stores, Big Lots, Family Dollar and many more..https://www.timesunion.com/business/article/companies-closing-stores-united-states-2024-19314014.php

It typically takes 2-3 years to feel the pain of economy decision makers and IMHO, it will get a hell of a lot worse.

I think across the board, companies thought they could just keep pandemic price gouging going. Customers have replied with a firm, "NO."

 

[blackwater]

I think across the board, companies thought they could just keep pandemic price gouging going. Customers have replied with a firm, "NO."

I don’t believe even most dealer ships gouged. Supply chain issues made cars scarce and the dealerships had to still pay rent and mortgage payments. Therefore they jacked up prices on the few vehicles they could sell. Also with plenty of available credit and/or cash, consumers will buy whatever, no matter the price. People also received free Covid money and because credit cards are maxed and Covid money is gone, the economy is slowing, businesses are STARTING to feel the squeeze. Someone on this thread mentioned that nobody was in Discovery Bay Labor Day weekend, which was an anomaly. I was at Lake Powell and it was identical. People are cutting back on luxury items, soon it will be groceries.

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