Quote:
Originally Posted by Tcoat
Sorry guys.
Just going to copy & paste in all the related threads.
For those of you thinking there are going to be great deals as the dealerships try to get rid of their "excess" inventory. Keep dreamin'!
I have to sit through a two hour meeting on the state of the industry twice a week.
Some FACTS:
There is not a single new car being made right now.
Most companies have not made any for 3 to 6 weeks.
It will be anywhere from 2 to 8 weeks before most are making cars again.
This means someplace between 8 and 12 MILLION less new cars built this year.
The whole industry is at a zero cash flow level.
When production does ramp up again it will be slow and restricted to high demand/volume models to restore cash flow.
Several of the smaller parts suppliers will not survive this which will hamper the start ups even more.
Many of the manufactures should be tooling over to the 2021 models within the next 60 days.
They are trying to decide if they will return to making 2020 models or go straight into the 2021s.
R&D is on hold with every single manufacturer so no new models are being worked on (see cash flow above).
Low volume cars are most certainly DONE for this year and probably for at least two more. IF they come back at all.
The glut of used cars that is already building will hammer another nail into the coffin of the new ones.
I know that there will be a bunch of armchair experts working at McDonalds that will dispute this information but at this point in time there is about an 85% probability you can kiss the Twins (in any form) goodbye forever.
Forget everything you think you know about the auto industry because NONE of it applies anymore and it will NEVER go back to pre Covid status. We are all living through the end of an automotive era as we know it.
Sincerely,
Tcoat
Senior Manager
Tier One automotive parts supplier
30 years in the business
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FWIW, completely agree. We're going into a completely new world. As unsettling as it is for everyone, there will be no going back to 'normal' for the foreseeable future. The 'new normal' is going to be
very different from the life we have all known. We all want everything to just go back the way it's been, go back to life as we knew it, but it's just not going to happen.
The impact on the next-gen twins is that all car companies are now going to be in cash conservation mode for quite a while. It's sheer survival. Not so much how to maximize revenues, but how to minimize the bleeding. Even Toyota, the largest car company in the world, is going to be focusing on minimizing the pain.
Toyota is a completely financially driven company. I interviewed for a position in new product planning with Toyota over 30 years ago, and was turned down. Their reason was that I was "too much of a car guy". They were afraid that I would let my love of cars get in the way of making strictly financially-based decisions. Every one of the dozen or so people I interviewed with at the time were proud of
not being 'car people', but strictly financial types. Making decisions based strictly on the 'numbers' was the Toyota way, and I suspect it hasn't changed.
Even though Toyota's pockets are very deep, they may well decide that it's better to cut their losses and discontinue development - and spending - on what would at best be a niche car with an inconsequential impact on sales. Even in a best case (pre-coronavirus) scenario, the 86/BRZ would be trivial in terms of total Toyota sales (and Subaru, at 1/10 the size, can't do it on its own). In the new world order, it's probably going to be hard to make a case for continuing to spend money on a specialized niche car that might not make any return on investment (or certainly not as good a ROI as a mass-market car such as a Camry). A couple of days' worth of Camry sales probably exceed an entire years' 86/BRZ revenues.
I would absolutely
love to see a new BRZ/86 with a turbo 2.4 engine. Even though I just bought my 2019 6 months ago, I'd be the first in line for one. But the harsh reality is that it's just not likely to happen.