Post by RichardInTN on May 27, 2023 21:39:51 GMT -5
New Car Market: Prices Are About To Plummet Due to Oversupply
Vance Cariaga
Sat, May 27, 2023 at 9:31 AM EDT
The U.S. car market has shifted into lower gear in only a matter of months. After average car prices hit record highs as recently as last summer, some analysts now predict that an oversupply of vehicles will lead to a price war that sends prices plummeting.
A recent report from UBS estimates that global car production will exceed sales by 6% this year, leaving an excess of 5 million vehicles that will require price cuts to get sold off of lots, Yahoo Finance reported. Although those price cuts might not happen until the latter half of 2023, automakers are preparing for a price war, and some electric vehicle makers are already slashing prices.
“Given the bullish production schedules, we see high risk of overproduction and growing pricing pressure as a result,” UBS said in a note to clients. “The price war has already started unfolding in the EV space, and we expect it to spread into the combustion engine segment [during the second half of 2023].”
Makers of family cars are most likely to suffer from price cuts, the analysts said, while luxury carmakers are expected to hold up better.
...
finance.yahoo.com/news/car-market-prices-plummet-due-153706713.html
Vance Cariaga
Sat, May 27, 2023 at 9:31 AM EDT
The U.S. car market has shifted into lower gear in only a matter of months. After average car prices hit record highs as recently as last summer, some analysts now predict that an oversupply of vehicles will lead to a price war that sends prices plummeting.
A recent report from UBS estimates that global car production will exceed sales by 6% this year, leaving an excess of 5 million vehicles that will require price cuts to get sold off of lots, Yahoo Finance reported. Although those price cuts might not happen until the latter half of 2023, automakers are preparing for a price war, and some electric vehicle makers are already slashing prices.
“Given the bullish production schedules, we see high risk of overproduction and growing pricing pressure as a result,” UBS said in a note to clients. “The price war has already started unfolding in the EV space, and we expect it to spread into the combustion engine segment [during the second half of 2023].”
Makers of family cars are most likely to suffer from price cuts, the analysts said, while luxury carmakers are expected to hold up better.
...
finance.yahoo.com/news/car-market-prices-plummet-due-153706713.html