Quote:
Originally Posted by b0son
Warehouse charges are the least of their worries. They have giant factories that have a lot of fixed overheads, that need to be producing in order to cover those costs. Right now, there is a degree of withholding stock to maintain premium pricing, and a lot of consumers itching to spend regardless of prices asked. That wont last forever. Rates rising and businesses slowing down, means the buyer becomes limited by access to credit and the cost of that credit, rather than the dealer's access to stock.
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Over the past decade, Ford has found that a lot of those so called “fixed overheads” can in fact be considered variable if managed that way. A lot of those plants now have supply contracts negotiated with penalty clauses and labour contracts now have stand down provisions for varying wages, lectric power is variable on power consumed, local taxes paid are variable, the list goes on…
Just in time building only works when you have a stable supplier base that isn’t constantly being affected by external factors like covid interruptions as is the case with Chinese suppliers.
The warehousing charges I speak of are a factor with other goods and medicines supplied to Australia as dependant on constant shipping and supply from overseas manufacturers. Prior to 2020, a lot of those imported goods and medicines were supplied in greater amounts and stored in warehouses to avoid the ebb and flow of stock we see today.
A lot of home buyers are still on fixed interest some are on those rates for up to the next three years, so while some will have interest rate shock, many will avoid that.
We need to stop looking at monthly car sales numbers as an indication of sales achieved last month and recognise that it’s more about just delivering and registering vehicles that have been ‘sold’ months in advance, some models are six months wait others are well over a year or two away.