How the Vehicle Production Nightmare Upended Everything and Why Automakers & Dealers Don’t Want the Old Ways Back

Yves here. Wolf’s article focuses on how the new car business has become a “made to order vehicle” business, much to the delight of industry participants. But it’s very removed from what I encounter down here.

Since I’ve been in something closer to the real world, as opposed to transit-heavy NYC, it’s become clearer how most Americans are hostage to cars, and high car prices are catastrophic for low income workers. We had one aide, a Filipina nurse who was working huge amounts of overtime so she could buy a car. Some others had difficulty with their shifts because they depended on family members for rides. Another had recently bought a lemon and had it in the shop regularly.

Our best aide bought a lovely used vehicle, a not very expensive convertible, with some of her big unemployment check. It was totaled less than six weeks later by a car full of drunks, where the driver had no license and no insurance and the vehicle had expired tags. She was injured as well as devastated by losing the one really nice thing she had bought herself in years. She could afford only a badly-beaten up replacement which has gone in for repairs pretty often.

That is a long-winded way of saying that for most Americans, the current and likely future pricey car market is merely an inconvenience: do I pay up and still wind up having to wait and even then not getting all the features I’m supposed to due to chip shortages, or do I compromise on a cheaper or older car? When you get further down the food chain, compromise is the only option, and that can mean being able to buy something that is barely better than a clunker.

By Wolf Richter, editor of Wolf Street. Originally published at Wolf Street

Despite the ridiculous price spikes for used vehicles – the CPI for used vehicle retail prices spiked 41% year-over-year in February, and Manheim’s wholesale price index for used vehicles spiked by 38% – there’s no shortage of used vehicles on dealer lots. There is plenty of supply. But new vehicles have been in a historic shortage due to the semiconductor shortages and the ensuing production cuts. And this has changed how the industry operates.

The number of used vehicles on lots of franchised and independent dealers in February (purple line in the chart below) rose to 2.62 million vehicles, the highest since December 2020, according to data from Cox Automotive. This was down by 9% from the average inventory in 2019 (2.88 million vehicles).

But the number of new vehicles on dealer lots has been hovering at catastrophic lows. In February, dealer inventories edged up to 1.07 million vehicles (red line), which was down by 70% from the average in 2019  of 3.66 million vehicles.

Days’ Supply

The standard metric in the retail industry of days’ supply shows how many days this inventory at the beginning of the month would last at the current rate of sales, with no additional vehicles added to inventory. The metric is a function of both, the number of vehicles in inventory and the number of vehicles sold during the prior 30 days, and it eliminates the effects of inflation on inventories.

Used vehicle supply ticked down to 51 days in February mostly due to higher sales in February than in January. This supply of 51 days is above average supply in 2019 of 48 days, and above average supply in 2021 of 41 days. In other words, there is plenty of supply, at the current rate of sales:


But new vehicle supply at dealers ticked down to 34 days. Before the pandemic, 60 days’ supply was considered healthy. The average in 2019 was 90 days, which was too high due to the slowdown in new vehicle sales at the time. During the lockdowns in March and April 2020, when sales ground to a near-halt, supply spiked. But then sales picked up again in mid-2020, and the production cuts due to the semiconductor shortages became the #1 problem:


Total combined supply of new and used vehicles and of auto parts at dealers, which the Census Bureau reported yesterday for January, declined to 1.24 months (about 37 days’ supply), having stayed in the same catastrophically low range since March 2021, with hardly any improvements.

This data from the Census Bureau goes back 30 years, to 1992, unlike the above data sets that only go back to 2019. It shows just how much of an outlier today’s vehicle inventory has been. But by combining new and used vehicles and parts, it papers over the catastrophically low levels of inventories at new vehicle dealers:

Production Nightmare

When the Federal Reserve today released the industrial production data for February, which includes manufacturing, there was another bad number for manufacturing production of motor vehicles, components, and parts. This is the sector that has been most severely hit by the semiconductor shortages and by other supply chain issues.

The index for production of motor vehicles and parts has been in the same low range since the beginning of 2021, when the semiconductor shortages started to bite. In February, production was roughly level with February 2021, but was down 11% from February 2020, and was back where it had been in 2014.

Despite the drop-off in production of motor vehicles and parts (red line), the overall index of Industrial Production ticked up to the highest since 2008 (purple line):

Production cutbacks by automakers is a global issue. Toyota just announced a series of production cuts at some plants globally. EV maker Rivian, which just started getting its pickups out the factory door, announced last week that it might have to cut production this year in half. The German automakers are now coming out with further production cuts, on top of those caused by the chip shortages, because some of their key component makers – such as of wiring harnesses – are in Ukraine and have shut down. Every day seems to produce a new challenge.

Supply chain challenges always existed, but most issues could be resolved fairly quickly. Now the issues are multi-layered and widespread, with new causes being added to it, such as the difficulties of the component suppliers in Ukraine and Russia.

New Vehicle Sales – and the New Way

As a result of the inventory shortages of new vehicles, customers have switched in large numbers to ordering vehicles and waiting patiently till it arrives.

But it’s hard to gauge actual demand for new vehicles because supply is so low. Vehicles are sold at mind-boggling prices, for mind-boggling per-vehicle gross profits at dealers and automakers, as customers are still paying whatever to get a new vehicle.

And there is enough demand at these mind-boggling prices, given the constrained supply, and inventories have not yet been building in any meaningful way. A significant inventory build would mean that supply is outrunning demand at those prices. But that hasn’t happened yet.

So right now, sales are limited by what automakers can produce. In February, only 1.05 million new vehicles were sold. This was down by 12% from February 2021 and by 22% from February 2020. These are historically low sales going back to the 1970s:

Automakers and dealers are loving the mega-record per-vehicle gross profits, and they’re loving that customers have stopped haggling and just pay whatever, including over sticker, and they’re loving the large-scale shift by customers to buy via make-to-order, rather than off the lot.

This is a system Tesla, which doesn’t have franchised dealers, implemented from get-go. Make-to-order solves all kinds of issues. It solves the problem of some units getting old sitting on the lot and having to be sold at deeply discounted prices. It solves the issues of inventories piling up and dealers being overstocked, such as in 2019, when automakers had to heap costly incentives on the market to get those vehicles over the curb.

Manufacturing vehicles that have already been sold is a more efficient way of selling, and both dealers and automakers want to encourage customers to keep doing that. And dealers would love for customers to keep paying MSRP or over MSRP.

But they all would like to sell more vehicles at those per-vehicle mega-profits. Which means that automakers will have to be able to get their supply chains straightened out and build more – but they don’t ever want to overbuild again, like they used to, because such inventory gluts cause profits to plunge.

The semiconductor shortages have upended the old way of doing business in the auto industry, and have upended how customers buy new vehicles, such as paying sticker or over sticker and ordering vehicles rather than picking one out on the lot. Retail customers could always order, but it was just a few customers who did. Now lots of customers are doing it.

The dream for the industry – but not necessarily for the customers who have to pay for this – would be if automakers and dealers can maintain this system of how customers buy, and what they pay, with dealers operating on very lean inventories and mega profits, even as production starts recovering from the shortages.


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  1. Tom Doak

    My understanding of the business (from living in Michigan for 35 years and knowing people in various parts of the industry) is that car dealers have a sales territory, but that automakers have always been able to dictate to dealers how many cars they have to take. What’s changed is, they can’t make them take cars they haven’t been able to build yet.

  2. Hayek's Heelbiter

    I thought replacing everything that worked perfectly well mechanically in cars with electronics and code, Just-In-Time supply chains, offshoring of all of our chip manufacturing capability, was supposed to result in a new Golden Age for the American automobile consumer.
    Am I missing something by not getting with the program?

    1. Larry

      Batteries are incredibly expensive still. Despite a lower number of parts, pure BEV vehicles onboard batteries are massive and consume loads of rare earths and precious metals. Not clear that BEVs are a solution to anything other than giving well healed people an ego boost and some cooler tech.

  3. PlutoniumKun

    I wonder how this will effect the car rental market. Traditionally they’ve operated by soaking up excess car stock – seeing what cars they are using has always been a good way to see which company has needed to get rid of a lot of a particular model. The company I usually use – Sixt – has I think had a slightly different model, mostly picking up higher specced German cars – I’ve assumed that they had some sort of deal with VW and BMW for any vehicles that have become a delivery problem for one reason or another.

    I would guess that if manufacturers no longer have spare capacity to sell to Hertz, then those companies are really going to struggle unless they can raise prices a lot. From my understanding, car hire is a very low margin business.

    1. Robert Gray

      > … those [rental] companies [e.g., Hertz] are really going to struggle unless they can raise prices a lot.

      Which they have recently done / are continuing to do. And how! I customarily visit the US once a year although I haven’t been since 2019 because of the corona. For the location, time-frame and duration I needed, I typically paid $200 – $250 for a Hertz (or other) rental car. Trying to plan for this summer, the prices I’m seeing start at around $800!

      1. PlutoniumKun

        Thats a pretty shocking price rise. It would dissuade a lot of users and force them into other plans i would guess.

        Prices have risen significantly here since Covid (they were obviously rock bottom at the beginning of the pandemic). Out of curiosity, I just checked summer rental prices and they are excruciatingly high – not by the same order of magnitude of your Hertz quote, but I’d say nearly twice the pre Covid rate.

        1. Kurtismayfield

          Everything related to vacation spending has gone up considerably. I am attempting to find summer lodging for a weeks vacation and the prices have doubled compared to pre COVID.

      2. Cynical Engineer

        The car rental business is struggling: They relied on having fleets of almost brand-new cars that required minimal repair/maintenance. The car manufacturers are no longer selling cars to the rental fleets so they’re having to keep their existing cars in the fleets. As these cars age, maintenance costs are going up and they don’t have infrastructure to do all these repairs in-house.

        Add in fleet utilization at close to 100% so there’s ample incentive/reason to raise prices. In the short run, they’re showing record profits, but expect that to change shortly.

    2. Dan

      Yes, my experience renting or booking rentals in California, Illinois, and Hawaii in the last year has borne this out. Pre Covid, a compact rental for $40/day was not unusual – prices are now sitting at $100 or more per day. I hate driving to Los Angeles from Northern California, but it makes no sense to fly and rent a car at these prices.

    3. Mike Smitka

      Enterprise Car Rental (privately held) is the largest car purchaser in the US in normal times, at 1 million new cars a year. After a few months those would flow into the used car market. So what happens to the rental industry has a huge impact on used car prices, and the availability of low-mileage vehicles.

      Early in the pandemic, the industry couldn’t rent cars, and aggressively “de-fleeted” to try to stay solvent. When travel resumed, albeit at low levels, they had no inventory – Enterprise for example had about 2,000 cars just at the Detroit airport, pre-pandemic [since I haven’t traveled, I don’t know how far they cut back]. They couldn’t purchase new cars, they were rationed to keep cars available for retail customers. They raised rates, but also kept cars far longer. Of course that feeds through the entire used car market. People keep their new cars longer than planned, and those who had bought a good used car likewise keep them longer because the sort of “good” used car they would normally buy are no longer affordable.

      I regularly talk with a local used car dealer, he has a hard time finding inventory of the sort his (rural) customers want. My son is car shopping, nothing available, empty lots for both new and used.

      Now as you note, cars are a necessity across most of the US. Those at the older end of the car market are stuck – they just have to keep their clunkers running, because without new cars, the effect ripples down the used car market.

      The question is what happens when production recovers, which may not be until 2023 (no neon, and Renensas fabs off-line in Japan due to the latest earthquake). Car companies love the profits, of course, but face government mandates [not consumer demand] to produce EVs and they don’t want to lose their entry-level customers.

      I attend auto industry functions regularly, it’s intellectually fascinating but really hits the ALICE [asset-limited, income-constrained, employed] population hard. I’m in a rural area, there’s no transit alternative, and walking only works for a small minority.

    4. Louis Fyne

      1. car rentals are crazy expensive, even in the off season.
      2. Staff noticeably has been cut back.
      3. if you are use a car rental, allot a lot more time than in the past
      4. be kind to the person behind the counter, theyprobably are much more miserable than you are

  4. rob

    Suburbia is Subsidized:
    I hope the link works. The video is saying that the USA style of suburbs is heavily subsidized. The US went down this route when cars were cheap and petrol was cheap. But now this is coming to affect Americans in their pockets.
    Having said that, electric cargo bikes are a great way to get to the supermarket and fill up on shopping.

    1. Andrew

      I have been thinking about those electric/pedal bikes. Instead of subsidizing electric cars to the tune of $12,000 (and that is only for those that can afford another $30-40 thousand to buy), why not subsidize the bikes at $1200 or so. Benefits would include a much larger participation rate hence more cars off the road, simpler production and recycle architecture could mean a lot more regional factories, plenty of parking lots repurposed for parks, gardens, etc., and healthier citizens. The downsides would include road-rage and a booming need for orthopedic surgeons but maybe that would subside over time.
      The fat tire bikes with dual powered wheels are also perfect in rural areas like mine with gravel roads and snow. This not quite so old codger is quite excited about these machines; range 25 miles at 20mph, park it for winter = 1/2 time off for 1999 1/2 ton Chevy (286,000 thousand miles).

      1. PlutoniumKun

        In Ireland and the Uk there are major tax rebates for buying bikes, electric or otherwise through your employer. Its supposed to be to encourage bike commuting, but in reality people use it just to buy a new bike they want. At a relatively modest cost to the government it has been an enormous boon to bike shops and cycling in general.

        1. Andrew

          I always appreciate your comments and from them I gather you have a lot of experience and or acquaintance in China. Is it true that Chairman Mao made it a priority to manufacture a good affordable bicycle for all Chines people. I seem to remember reading about that sometime ago and was thinking ironically of the United States (genuflects) following the Chinese example, you know an idea from the people who don’t “innovate”.

  5. jackiebass63

    The Toyota dealer I bought my last car from only has 14 new vehicles in stock.Normally they would have around 200. I suspect what is happening with them is most of their new incoming cars are pre sold. If that isn’t the case there is no way they could stay in business.I traded in a 3 year old Tacoma. They gave me $500 more than I paid for it new. If they sold it for what they listed it for, they got $3000 more than they bought it from me.Over the years I have purchased many new cars. I have never seen conditions like the present in the new car market. I would suggest people only buy a car, either new or used, unless it is necessary. Presently dealers have the upper hand. Only when sales go way down will the buyer get a better deal.

    1. CanCyn

      Reply to JB63 @ 7:31am
      That begs the question … why did you buy new right now? I have a 2013 Suburu Impreza. If not for the current market, I might be thinking about something new/newer. But I think I’m just gonna wait this thing out. Too many factors affecting the market. Maybe by 2024/25 the dust will have settled and if we’re all still alive, I’ll get something then. Between retirement and Covid, “I don’t get around much anymore” so current vehicle really will do.

      1. Louis Fyne

        if one can afford it, buying is a much better deal than buying used.

        and the market is so hot right now, dealers can sell garbage cars and it will be gone in a week the right price

        particularly as new car loans have lower rates. which likely be inflated away by 10% inflation for at least the next 12 months

        1. cnchal

          > . . . buying is a much better deal than buying used

          No way. Personally, I pay used go kart money for cars and were I looking today (I am) it’s nothing newer than 2006. All cars are garbage cans on wheels, the newer they are the worse they are. Peak car design was over two decades ago. Let the dummies pay through the nose for new. Nothing made today is worth buying.

          1. Charger01

            Personally, I pay used go kart money for cars and were I looking today (I am) it’s nothing newer than 2006.

            That’s a brave stance. I respect your ethic in vehicle purchasing. I bought a 2010 subaru outback 3
            6r, new from the dealer in feb 2010. It has 193,000 miles, in fair condition and I’ve received offers over $5k for it. Stay out of the market if you can.

  6. c_heale

    Maybe it’s the beginning of the end of the car as mass transportation. For the rich only in future?

    1. Larry

      Unlikely. We’re woefully unprepared for that future, other than in major urban areas. Granted, the a majority of Americans live in urban areas, but even within those cars can be required. I lived in Providence RI for years without a car and could afford an apartment within walking distance of Brown and two grocery stores. That’s not so easy in lots of areas.

      1. Hepativore

        I have always lived in rural and semi-rural areas, so public transportation was never an option, especially during the winter as it gets very cold and snowy in the Upper Midwest, making biking difficult and impractical.

        I am not sure how you would be able to have anything like effective public transit in an area that only has a population around 500 and the nearest big city is sixteen miles away.

        Having a vehicle is a necessity, not a luxury in places like mine, and so these high vehicle prices are only going to hurt people that are already at an economic disadvantage.

        1. Odysseus

          I am not sure how you would be able to have anything like effective public transit in an area that only has a population around 500 and the nearest big city is sixteen miles away.

          The only way is to stop assuming that fanatical individualism is the only answer.

          Neighbors can carpool to get groceries. Any trip known in advance could be communicated to a ride service. Shift workers could meet at collection points.

          When I was a child in the spring when the roads were too soft for our school bus, we had to walk or ride to the church on the highway a couple of miles from my house.

          Sure these kinds of services aren’t profitable in a hard capitalist sense. But you can eliminate an awful lot of car trips if you try.

          1. Yves Smith Post author

            You assume neighbors get on. Our current neighbor hates us and has interfered enough with our efforts to trim mere tree branches (as in 2″ in diameter, max, most 1″) that our aides felt threatened by him when they’d go in the back yard to smoke. One literally carried her pistol, the other a Taser. He harassed one yard man into quitting. I had to write two letter to the city so that if he escalates, the cops will come quickly. Oh, and this guy moved here from VT in 2019, so don’t blame this on the South.

            You also assume enough trips to make a ride service attractive to operate.

            The big way to avoid trips is to have a “Mormon larder” as in huge storage space and at least three freezers. My father had two fridges and one full freezer and they were surprisingly full with his baking, pickling, and results of his deer hunting. Even then this was only a few months of food (including his garden, where he got 3 crops a year, but we still had to shop a couple of times a week for stuff like milk; I admit UHT milk, which last a really long time, is an option). Can most people afford the equipment and the forward investment in food? The low income people I know can barely afford to buy and freeze a couple of months of meat when on sale.

            1. OnceWereVirologist

              Rural dwellers would have to return to the pre-modern pattern of rotating market days in the surrounding small towns once a week. People would be able to rideshare because everyone would be going to the same place at the same time and people would likewise be able to restock on perishables on a weekly basis.

  7. dougie

    Being a bit of an industry insider (from the repair end), I can tell you that the dealers are not lamenting the loss of new inventory, because the money has ALWAYS been in used cars. This has been true for decades. Now that dealership lots have become de-facto used car lots, they are experiencing record profits. I recently spoke with the sales manager of a local Kia dealer who told me that more new cars on the lot means working much harder for less money.

    In December, I purchased 4 new Kias for my LLC rental car company. While at the dealership working out the deal, I saw the manager walking around my wife’s 2019 VW Atlas that I had driven in. He asked a few questions about it, and offered me a check for $12k more than we paid for it new. They sold it 4 days later for a quick $4k profit.

    A brief explanation, my LLC doesn’t rent cars to the public, only to my repair shop, who then loans them to clients purchasing repairs. It’s done for favorable tax treatment and asset protection. Lately, we have been asked quite often to rent them for private use. We always decline, but recently one client offered my managing partner $300/day to rent a Jetta for a week. Tempting, but still a no go…. Anecdotal, for sure, but it points to absurd pricing of retail car rentals

    The soaring price of new cars has led to a huge uptick in repair businesses nationwide, as people are currently much more likely to spend larger amounts to keep an older car operational. My guess is that this will continue through 2023, at least.

    1. Craig

      Yup. I just spent $2k more than “book value” to repair my car in December. Managed to limp it thru inspection. It won’t pass again without a new catalytic converter, which is just under book value. Will have to decide if I just skip getting it inspected going forward.

      It is an old car (2003) and I’d like to replace it. Tried to buy in Dec vs repair, but the smattering of new cars “on the lots” are all pre-sold and accounted for and the used cars are mostly beat up trash. Not good.

  8. Mikel

    I’m reading the comments about the wild prices for used cars and it’s not adding up.
    I’d be interested to hear more details about the buyers (not only the dealer buyers).

    1. Yves Smith Post author

      Lack of new cars and nutty prices for new cars drive more to use car market.

      It’s called substitution.

      And during 2020 and maybe 2021, rental car fleets cut their inventories, so they had fewer cars to sell into the used car market. I should track down details but I need to turn in.

      1. Mikel

        I’m thinking about the affordability factor.
        Then again, subprime lending is high in the car market. So I guess I’m thinking high prices being described for used cars makes me think about the lending – and what could be in store.

    2. Dalepues

      Autotrader seems to be a good source for used car prices.
      In 2018 I bought a used Honda Accord in Atlanta with 28K miles for
      $16k. On Autotrader this morning a 2015 Honda Accord with 52K miles
      is selling for $26,590. There are others for less, true, but nearly all above the
      price I paid four years ago.

    3. Larry

      I nearly bought a 2022 Honda Civic. Base model, 6 sp MT hatchback. Lovely car really. But the dealer had inflated the MSRP beyond what Honda lists online (and review sites list, I assume Honda is allowing this discrete price gouging) and tacked on a $3k “market adjustment” fee. The sales manager was refreshingly forthright. He said that if I wanted the car, that was the price and I should buy it right then as it likely would not last through the weekend (I visited on a Saturday morning). I was unwilling to pay ~$5k over Honda’s MSRP for a base model Civic. Out the door price with all fees was going to be just shy of $32k, normally I would have expected about ~$25k. Didn’t matter, the car was gone that weekend. And the dealers don’t even follow up at all to see if I’m still interested in getting a car. They’re selling everything they get their hands on at a significant profit.

      I have the luxury of working from home, so don’t need a car for many long term trips. My current ride is a 2009 with 184,000 miles on it. I continue to do maintenance on the car, but am starting to find replacement parts hard to come by. An airbag sensor should be replaced, but I can’t get the part. So I would love to get a new car and not have to worry about when I do need transport, but I’ll just ride it out another year and see if the supply chain can unkink a bit. With events in Russia/Ukraine and COVID still raging though, I suspect next year won’t look very different from this year.

      1. CanCyn

        I commented above that I am kinda/sorta ready for a new vehicle but am going to wait. Of the many factors leading me to wait, one is worry about the quality of whatever is coming out of the factories right now. Short handed and Inexperienced workforce due to the pandemic, parts problems, supply chain craziness. I am afraid that the risk of getting a lemon is higher than usual.

        1. Louis Fyne

          you are normally right, but IMO, shortages will only get worse. add metals shortages to the electronics shortage

          Buy a new Honda orToyota or Mazda or Hyundai-Kia now if you are in the market. IMO.

    4. Louis Fyne

      Someone said prior, if you want a new car, you go into the dealer leave a deposit and return in 6 – 9 weeks.

      Many people cannot wait 6 – 9 weeks (say you got hit by a druNk driver or your company needs a truck this week), so they have to go into the used car market for a car ASAP.

      that is how you get these weird distortions in which used car prices exceed new car prices. Most people have no choice and the median driver is geared to the monthly paymenr, and ultra low rates and 72+ month loans have hidden the wackiness of the pricing.

      1. Mikel

        They also still do a lot of subprime lending in the car market. The “ultra low” rates don’t go to the people who really need the used car market.

  9. Arizona Slim

    A couple of my friends are avid makers and fixers. The wife of this couple recently told me about a celebration of the life for one of her recently deceased cousins. Apparently, it was quite the event, with the libations flowing freely.

    One of the other attendees was an 80-year-old aunt who quizzed everyone about their cars. Specifically, what were they doing to maintain and repair them? As in DIY?

    If their answers didn’t pass muster with Auntie, she had plenty of advice on what they should be doing. Based on what my friend was telling me, I can conclude that Auntie can still turn a wrench.

  10. Tom Stone

    No remarks about how much worse it’s going to be next year?
    It is my understanding that supplies of palladium will be very tight within a few months due to the sanctions against Russia.
    which supplies 30% or so of world demand.
    Which means 30% fewer catalytic converters.
    No purified neon from Ukraine means 40% less for the world market which seriously constrains the ability to manufacture silicon chips.
    And no sapphire substrate ( All of which comes from Russia) means no high end chips at all once inventories run out.
    I expect cars,phones,laptops and anything else that uses computer chips will be a substantially more expensive in a year.

    1. Polar Socialist

      Palladium having many other applications besides catalytic converters, “markets” may decide that there will much fewer catalytic converters than 30%.
      For example, I understand it’s also needed in oil cracking in refineries, and they will have more purchasing power than car industry subcontractors.

    2. Jeremy Grimm

      Cars increasingly expensive and unreliable, increasing prices and supply ‘problems’ for gasoline and diesel; lack of public transportation; housing, retail, inventories, and end supplies deliberately spread to support demand for petroleum and undermine u.s. Labor; an ongoing plague encouraged by policy to spread as it will; and efforts to stoke up a needless war. How many Jenga pieces still hold the tower up and for how long? In the background Climate Chaos continues its acceleration. What an amazing future the Power Elite have constructed.

      1. Duke of Prunes

        I don’t know. I think cars are probably as reliable as they ever have been, or maybe I’ve just been lucky. I have an 11 year old car runs great, I’ve put very little money into it aside from regular maintenance and it has very little rust (after 11 winters in the rust belt). Yeah, it has a few niggles, but, in my youth (70s /80s), and 11 year old car was practically an antique and +100K miles was exceptional. Now, 100k miles is table stakes.

        I also have a 7 year old SUV that seems practically new. In fact, we just decided not to replace it because it is perfectly fine as is (used prices are high, and I found a dealer willing to sell at MSRP).

        It’s strange, today’s Toyota Camrys and Honda Accords are much faster and far better handling than high end sports cars from the 80s.

        1. Jeremy Grimm

          I have enjoyed excellent service from early ought cars. But parts and rust made them increasingly unreliable — much like the older vehicles Yves described. I replaced the last of my early ought cars with a used car a decade newer, though at what I thought was a considerable increase in price over what I have paid for similarly older used cars in the past. I like to believe I a tiny bit higher up the food-chain than most of the Populace, but I definitely cannot afford a new car or a premium used car. I hope and expect to get reliable service from the used car I recently purchased. It does perform better than my older car and gets comparable mileage The greatly increased complexity of the features it contains worry me. As a rule of thumb, I equate complexity with diminished reliability — although I hope my car does not adhere to this rule. All this is well and good but I believe there are an increasing number of older cars on the road now, and the better used cars are relatively more expensive than they had been. Older cars are afflicted by more rust, they do wear out, and suffer more difficulties obtaining replacement parts — which I believe tends to support my claim the the cars on the road today are less reliable.

          In the 70s and 90s, 11 years old was an old car — people were replacing cars earlier then. If +100K miles was remarkable service, I am not sure what cars you mean. Those were years when u.s. automakers were busy crapifying their vehicles.

          1. Yves Smith Post author

            I assume you are in an area where you get snow and therefore salt which eventually ruins the undercarriage of cars.

            I always noticed in CA the existence of a few lovingly maintained very old cars on freeways.

          2. polar donkey

            My family owns an auto repair shop. We were talking a few days ago about quality of new cars. They are firmly in the camp of most everything over the past few years is junk, aside from toyota and honda. One car in the shop was 3 or 4 year old nissan versa. The gear shifter breaks in them fairly often. A small sensor on the assembly. You can’t just fix the sensory. You remove the entire shift assembly, get a new one. It is a sizable assembly and when you look at it, except the metal rod of shifter handle, entirely plastic. I asked how much it was, thinking a few hundred dollars. They said $100. I asked if they get a core charge and send back. Nope, Nissan doesn’t want it. Just trash it. Then they told me about all the notifications of new vehicle problems that don’t make it to recall level, but are still problems for many owners. Pages and pages for common cars. Plastic junk. My family laments the waste and total disposability of everything made now, and they are hardly tree huggers.

      2. Cirze

        Amazing future? More like terrifyingly hungry future.

        Thanks to the self-concerned, poorly educated elites.

  11. Anthony G Stegman

    It seems to me that a very big shift in thinking is required of the American people. First, they need to regain control of their government from the plutocrats and oligarchs. And then they need to dramatically change budget priorities. Privately owned and operated automobiles need to go the way of the Do Do bird. Spending on public transit needs to be greatly increased. Much of the vast suburbs need to be torn down and converted to higher density and more energy efficient housing. And so much more. Paying for this can be done by diverting a good portion of the empire-sustaining trillions spent presently. Once again America has an opportunity to change the way it lives , and its relationship with the rest of the world. Let’s not blow this opportunity as we’ve blown other opportunities that were presented.

    1. Duke of Prunes

      Travel across any non-coastal region of the US, and you’ll see how getting rid of private cars is very wishful thinking. Public transportation doesn’t work when the population density is so low. How are farmers and ranchers supposed to live? Walk a few miles to the main road and catch the weekly bus? I guess it worked in the 30s and 40s, why not now?

      1. Jeremy Grimm

        One size does not fit all. That does not mean private cars as we know them will not become an endangered species. Travel across a suburb in anywhere u.s.a. and getting rid o private cars appears as very wishful thinking. Our existing infrastructure and the organization of our cities and towns both coastal and inland will not survive into the future. The farmers and ranchers may need some form of private car but that does not mean public transportation cannot work for a lion’s share of the Populace. Besides, how will the present large scale agribusiness farms and ranches fare as diesel and gasoline become increasingly dear — almost as dear as older tractors.

        But how did things work in the 30s and 40s? Towns used to have a main street in more than name and most people in the town lived near enough to the center of town they could walk to main street. Farmers and ranchers did not come into town that often. For longer distances there were passenger trains and river boats. Some of the larger towns had street cars.

  12. tindrum

    in Europe my experience is that more or less all cars are made to order and delivery times, previouslylong, are now endless. This was Daimler’s normal business model back in the 70’s, order the car, pay a large deposit and wait a long tie to get it.

  13. scott s.

    Same problem in the bicycle industry. The local bike retailer is getting squeezed. Repair side too as components are hard to get a hold of.

    1. PlutoniumKun

      Two months ago I asked the owner of my local bike shop about availability this year for a new gravel bike. She just laughed.

  14. Louis Fyne

    If one is in the market, buy a new car if at all it is possible. the used car prices are just insane. And spare parts are not as common and cheap as they once were due to factory disruptions.

    and if the metals and energy inflation is permanent for the next 12 – 36 months, spare parts are going to shoot up and not look back.

    aNd heaven forbid if DC goes full idiot and we get into some trade war with China.

    1. Sleeping Dog

      You could, I guess. The peak of pre-semi conductor automotive tech was around 1990, so expect fuel mileage to be 30-40% less and tail pipe emissions to soar.

  15. Joe Well

    The current car market is very clarifying as an analogy for the housing market.

    New will always cost more than used, but if new production is restricted, the price of old will be driven up, even if it is a 2002 Toyota or a 19th century fire trap.

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