Americas Dealer inventory increasing… good or bad?

[Zimm]

The economy is not great.

 

[AWo]

Some more statements from that interview with Lynn Calder. The interview was published in the German "Automobilwoche" (Automobile Week) magazine ( https://www.automobilwoche.de/autoh...-lynn-calder-die-nachste-stufe-erreichen-will ).

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"Nachdem Fans des Geländewagens in vielen Märkten von Europa über USA, Australien und Südafrika ihre Fahrzeuge erhalten haben, sollen nun die Life-Style-Kunden adressiert werden. Angesprochen dürfen sich vor allem urbane Besserverdiener fühlen, die am Wochenende gerne die Mountainbikes oder Surfbretter einpacken, um in der Natur aktiv zu werden."

"After fans of the off-road vehicle in many markets across Europe, the USA, Australia, and South Africa have received their vehicles, the focus will now shift to lifestyle customers. Urban high-earners, who enjoy packing their mountain bikes or surfboards to be active in nature on the weekends, are the primary target audience."

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"Den Schub kann Ineos gebrauchen. So sollen in diesem Jahr in der Fabrik im französischen Hambach rund 30.000 Fahrzeuge produziert werden, etwa doppelt so viele wie im vergangenen Jahr. Die Zahl der tatsächlichen Verkäufe verrät Calder nicht."

"Ineos could use the boost. This year, around 30,000 vehicles are expected to be produced at the factory in Hambach, France, about twice as many as last year. Calder does not disclose the actual number of sales."
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"Zweifel am Agenturmodell

Auf die Frage angesprochen, was Calder beim nächsten Fahrzeug anders machen würde, geht es schnell um das Thema Vertrieb und die Reise des Grenadiers zum Kunden. Je nach Markt vertreibt Ineos seine Fahrzeuge bisher über Händler wie in Deutschland, im Direktverkauf über das Agenturmodell oder einen Generalimporteur.
Zweifel hat Calder vor allem am Erfolg des Agenturmodells. "Es war in einer Zeit geboren, als die hohe Nachfrage nach Fahrzeugen die Umsetzung sehr erleichtert hat", so Calder.
Diese Konditionen seien nun aber nicht mehr gültig. Als neuer Hersteller ohne große Erfahrung sehe man, dass es gute Gründe dafür gebe, den Händlern den Verkauf zu überlassen. Außerdem habe man den Verwaltungsaufwand unterschätzt, etwa bei Kundenbetreuung mit Call Centern oder der Zulassung der Fahrzeuge in den jeweiligen Märkten.
Calders Schlussfolgerung lautet daher: "Ich bin nicht davon überzeugt davon, dass das Agenturmodell OEMs und Händler so auf eine Linie bringt, dass die Kunden davon profitieren."

Doubts About the Agency Model​

When asked what he would do differently with the next vehicle, Calder quickly turned to the topic of distribution and the Grenadier's journey to the customer. Depending on the market, Ineos currently sells its vehicles through dealers, as in Germany, direct sales via the agency model, or a general importer. Calder especially doubts the success of the agency model. "It was born at a time when high demand for vehicles made its implementation very easy," Calder explained. These conditions are no longer valid. As a new manufacturer without much experience, they see good reasons to leave sales to the dealers. Moreover, they underestimated the administrative burden, such as customer support with call centers or the registration of vehicles in the respective markets. Calder concludes, "I am not convinced that the agency model aligns OEMs and dealers in a way that benefits customers."
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The magazine also stated that the sales are "modest" in Germany, yet.

AWo

 

[AWo]

I just read an article from a German car business magazin, an analysis of Fiskers insolvency. 7 reasons where mentioned. Five have similarities, IMO, with Ineos:

1. Expensive manufactory-like production
Magna build the Fisker e-cars. OEM's do that for special or niche cars when producing them in the OEM's own plants is not possible or the expected number of units is too low.

But that is expensive. Therefore an OEM must build such a car, where there is very low competiton in the market. Fisker produced the "Ocean" at Magna, a SUV which then had to compete with many other SUV's produced in much higher numbers and therefore cheaper at the same class and equipment. Fisker was too expensive and had high production costs.

2. Too less scaling
To keep costs low OEM's very much try to use the same parts across as many modells as possible with combustion engine cars already. E-cars are even more sensitive in this area. Fisker couldn't do that. Too small, too less models. The Fusilier will face that issue, as well, as it shares not much up to nothing with other cars. Even within the Fusilier Ineos rejected to save costs by using same parts (left/right for example).

3. Mr. Fisker himself
Hec seems to be very special. He has a very high entitlement mentality, everything is world class and that 's again produces costs and is prone to customer disappointment.
He failed already with a military-style hybrid he claimed to be the best SUV ever.

4. Wrong sales model
Fisker sold directly to customers but they lacked knowledge about the cars and personell capacity. They turned too late to dealers to use their capacities and know-how.

5. E- car market crisis
Fisker tried to sell cars in a market which actually stagnates.

AWo

 

[bikesandguitars]

I just read an article from a German car business magazin, an analysis of Fiskers insolvency. 7 reasons where mentioned. Five have similarities, IMO, with Ineos:

1. Expensive manufactory-like production
Magna build the Fisker e-cars. OEM's do that for special or niche cars when producing them in the OEM's own plants is not possible or the expected number of units is too low.

But that is expensive. Therefore an OEM must build such a car, where there is very low competiton in the market. Fisker produced the "Ocean" at Magna, a SUV which then had to compete with many other SUV's produced in much higher numbers and therefore cheaper at the same class and equipment. Fisker was too expensive and had high production costs.

2. Too less scaling
To keep costs low OEM's very much try to use the same parts across as many modells as possible with combustion engine cars already. E-cars are even more sensitive in this area. Fisker couldn't do that. Too small, too less models. The Fusilier will face that issue, as well, as it shares not much up to nothing with other cars. Even within the Fusilier Ineos rejected to save costs by using same parts (left/right for example).

3. Mr. Fisker himself
Hec seems to be very special. He has a very high entitlement mentality, everything is world class and that 's again produces costs and is prone to customer disappointment.
He failed already with a military-style hybrid he claimed to be the best SUV ever.

4. Wrong sales model
Fisker sold directly to customers but they lacked knowledge about the cars and personell capacity. They turned too late to dealers to use their capacities and know-how.

5. E- car market crisis
Fisker tried to sell cars in a market which actually stagnates.

AWo

From a strictly business point of view, the glaring discrepancy between the two is that Fisker relied on venture capital and US government backed loans. It has been called the Solyndra of EV companies. It started with an initial loan of $5 million. It has been, from the start, operated poorly on a shoestring budget. Stories of infighting and power struggles are well documented.

Ineos has the strength of a privately owned, $40 billion company behind it. There is no question of leadership. As I said in another post, things are a little different in the business world when your credit score is unimpeachable. Am I over simplifying? Yes. But it truly is that simple when a company operates at that scale - and privately nonetheless.

Whatever similarities exist between Ineos and Fisker are negated by the fact that the companies operate in completely different orbits.

 

[DaveB]

I just saw a news report that said Ineos was on target to achieve its goal of 8,000 to 10,000 vehicles in North America in annually in 2024.
It also said any custom units ordered from now on would go into September production schedule.
These targets are lower than I expected.
I thought they would be after 20,000 units per year in US alone.
They are quoting Greg Clarke so I assume it is accurate, despite being a May report.
It does say "annually" not just this year.
Seems to be the same volume as posted on a variety of sites.
Assuming they manufacture 30,000 units a year that makes NA 30% of production.
I think Australia is only expecting 3,000 units a year but can't find ant numbers.

 

[ADVAW8S]

From a strictly business point of view, the glaring discrepancy between the two is that Fisker relied on venture capital and US government backed loans. It has been called the Solyndra of EV companies. It started with an initial loan of $5 million. It has been, from the start, operated poorly on a shoestring budget. Stories of infighting and power struggles are well documented.

Ineos has the strength of a privately owned, $40 billion company behind it. There is no question of leadership. As I said in another post, things are a little different in the business world when your credit score is unimpeachable. Am I over simplifying? Yes. But it truly is that simple when a company operates at that scale - and privately nonetheless.

Whatever similarities exist between Ineos and Fisker are negated by the fact that the companies operate in completely different orbits.

Keep in mind this was round 2 for Fisker. The originally launched a vehicle around the time the Tesla model S. That model had problems and it filed for bankruptcy. What emerged was a new leadership team and new designed.

 

[bikesandguitars]

Keep in mind this was round 2 for fisher. The originally launched a vehicle around the time the Tesla model S. That model had problems and it filed for bankruptcy. What emerged was a new leadership team and new designed.

Yes, but they still had to go begging for funding even after their IPO. Even worse, their marquee vehicle was very poorly received. It was called “the worst of both worlds” in a scathing review by Consumer Reports. After that, their stock got delisted… the whole thing was a nightmare.

 

[AWo]

As I said in another post, things are a little different in the business world when your credit score is unimpeachable.

As a non-native english speaker, I do not fully understand that term. Could you explain, please?

AWo

 

[AWo]

Whatever similarities exist between Ineos and Fisker are negated by the fact that the companies operate in completely different orbits.

I think there is not endless money available for IA. Money bound in chemical assets won't help and the chemical business is tight on money actually.

But you didn't get my point. Regardless how money-powerful IA is, at the other end you need buyers. If there were buyers, Fisker may have done it..look at the e-car market and its prices dropping. To attract buyers one thing is to have the right price tag. The Grenadier is too expensive for what it is (55,000€ to 60,000€ is where I see it).the Fusilier will also be.

Lynn Calders statement to go more to the lifestylers won't make both more price-worthy.

AWo

 

[dreamalaska]

As a non-native english speaker, I do not fully understand that term. Could you explain, please?

AWo

“unimpeachable” means “stellar”, “perfect” “excellent”

 

[AWo]

Check the anual financial reports of 2021, 2022 and 2023. You'll then find summarized:

Interest Income and Costs:

• Interest income for the year 2023 was €253.2 million, compared to €89.3 million in 2022, and €50.5 million in 2021
• Interest cost for the year 2023 was €754.2 million, up from €324.9 million in 2022, and €268.7 million in 2021

Unimpeachable credit score? Ineos bought BP Chemicals for $9 bn 2006 (making them as big as they are today), still paying interests for that. Actually a big ethane cracker project is running in Antwerp, worth about €4 bn, increasing. That at a time where markets broke away, chemical capacities were raised in Asia, competing with Ineos for customers, energy costs increased in Europe (and chemical plants need huge amounts of energy). The Ineos cash cow for decades, the Cologne plant and other European sites are kept afloat by the US business and recently an expensive acqusition in Lavera, France was made of a plant which never earned money. The Grenadier sell not as good as expected, yet...

Do you really think banks to ignore all that? Despite how people admire and love Ineos for the car...for banks Ineos is just a business with all its opportunities and risks....and companies pay for risks.

And to be honest, if the Grenadier would be that great (financial) success, you would see Ineos talking about that everywhere...but you do not get sales numbers. They do not open the books for automotive industry information companies, which get all the automotive related key figures together. I don't know how these companies are called in English, but I hope you know what I mean. In the beginning of the Grenadier Project, around September 2016 we sat together and recieved a lot of market numbers from such companies which reprocess and anonymize all kinds of automotive key figures. You an buy such numbers as an OEM or whoever is interested in and OEMs give that numbers away, so they can compare themself to others. Ineos doesn't do that.

The report for 2023 is attached.

AWo

 

[anand]

I just saw a news report that said Ineos was on target to achieve its goal of 8,000 to 10,000 vehicles in North America in annually in 2024.

For MY24 that is higher than they initially stated; MY24 was rumored to only be a 6,000-8,000 production run because anything over 5,500 units (or thereabouts) they have to pay a fine for due to not meeting CAFE standards

 

[DaveB]

For MY24 that is higher than they initially stated; MY24 was rumored to only be a 6,000-8,000 production run because anything over 5,500 units (or thereabouts) they have to pay a fine for due to not meeting CAFE standards

Maybe the 8,000 is closer than the 10,000
I have never seen any company that has a range as a target.
They usually are pushed for a hard target.

 

[Jeremy996]

This is a UK example, but there are a number of Grenadiers with odd specifications in the dealer network. This one has been at my local dealer for a while and is roughly £5k less than mine was on the road.

5str SW with rough pack but no extended electrics

For someone it must be a relative bargain, but I'd be put off by the lack of extended electrics as that would be an almost impossible retro-fit. The lockers might have tempted me if I did not own a Grenadier already. The Service Adviser said it was an owner specified vehicle who ultimately declined to buy it.

 

[C64_forever]

Check the anual financial reports of 2021, 2022 and 2023. You'll then find summarized:

Interest Income and Costs:

• Interest income for the year 2023 was €253.2 million, compared to €89.3 million in 2022, and €50.5 million in 2021
• Interest cost for the year 2023 was €754.2 million, up from €324.9 million in 2022, and €268.7 million in 2021

Unimpeachable credit score? Ineos bought BP Chemicals for $9 bn 2006 (making them as big as they are today), still paying interests for that. Actually a big ethane cracker project is running in Antwerp, worth about €4 bn, increasing. That at a time where markets broke away, chemical capacities were raised in Asia, competing with Ineos for customers, energy costs increased in Europe (and chemical plants need huge amounts of energy). The Ineos cash cow for decades, the Cologne plant and other European sites are kept afloat by the US business and recently an expensive acqusition in Lavera, France was made of a plant which never earned money. The Grenadier sell not as good as expected, yet...

Do you really think banks to ignore all that? Despite how people admire and love Ineos for the car...for banks Ineos is just a business with all its opportunities and risks....and companies pay for risks.

And to be honest, if the Grenadier would be that great (financial) success, you would see Ineos talking about that everywhere...but you do not get sales numbers. They do not open the books for automotive industry information companies, which get all the automotive related key figures together. I don't know how these companies are called in English, but I hope you know what I mean. In the beginning of the Grenadier Project, around September 2016 we sat together and recieved a lot of market numbers from such companies which reprocess and anonymize all kinds of automotive key figures. You an buy such numbers as an OEM or whoever is interested in and OEMs give that numbers away, so they can compare themself to others. Ineos doesn't do that.

The report for 2023 is attached.

AWo

This is really interesting, thanks for sharing the pdf.

 

[Guru]

I went through some of the inventory. Like other places, no locking diffs and some wacky combinations. Again, seems like a lot of people spec out a version with no intention of buying and they are garbage builds.

That’s some really judgemental BS.
I was a very early order & was invited to the NY off road demonstration. While there and it was very gnarly slippery mud/leaves etc the demo driver & I agreed the vast majority of owners would never need the lockers. Centre diff lock being more than adequate (I own/have owned multiple Defenders/Series).
So I specced mine the most basic as possible as it was mainly going to tow as a company vehicle.
Unfortunately having to wait so long I had to cancel delivery as we needed a new vehicle much sooner. Mainly to tow a demonstrator to the 75th Land Rover anniversary & my “garbage” build was sold quickly to another customer.
Back in the market now for another “garbage” basic build but honestly pissed at various dealers who insist on you signing up to view their inventory.
Please be more considerate about other buyers needs & builds. Without doubt there are many fantasy builds but it’s not for us to decide.

 

[anand]

I was a very early order & was invited to the NY off road demonstration. While there and it was very gnarly slippery mud/leaves etc the demo driver & I agreed the vast majority of owners would never need the lockers. Centre diff lock being more than adequate (I own/have owned multiple Defenders/Series).

Back in the market now for another “garbage” basic build but honestly pissed at various dealers who insist on you signing up to view their inventory.

I was a strong proponent of 90%(95%?) not needing lockers through the entirety of the PTO2 tour; they are frequently used as a crutch for poor line choice, pedal control, etc; especially for the many of the terrain encounters in the US. I recommended to lots of clients that the money saved from the Rough Pack (or lockers alone) be put towards a trip or an experience instead. Now, for the other 5-10%, it is an absolutely worthwhile add-on.

If you want an easy way to view inventory from an awesome dealer, check out Regal's inventory in GA. Yes it is far from you compared to the other options, but in my experience they were a no BS (and no dealer fees) dealer that is more than happy to have your vehicle loaded onto a transport truck and delivered straight to your home

 

[ADVAW8S]

That’s some really judgemental BS.
I was a very early order & was invited to the NY off road demonstration. While there and it was very gnarly slippery mud/leaves etc the demo driver & I agreed the vast majority of owners would never need the lockers. Centre diff lock being more than adequate (I own/have owned multiple Defenders/Series).
So I specced mine the most basic as possible as it was mainly going to tow as a company vehicle.
Unfortunately having to wait so long I had to cancel delivery as we needed a new vehicle much sooner. Mainly to tow a demonstrator to the 75th Land Rover anniversary & my “garbage” build was sold quickly to another customer.
Back in the market now for another “garbage” basic build but honestly pissed at various dealers who insist on you signing up to view their inventory.
Please be more considerate about other buyers needs & builds. Without doubt there are many fantasy builds but it’s not for us to decide.

I was a early adopters, I went to prototype tour, I went to off road drive event. I waited and waited for my build to arrive, only to have build show up on the dealers lots from people who didn't go through their build. Guess what, I'm still waiting but now it's my fault as I switched to the QM.

Garbage builds are throw away builds. Builds that are random. I never judge the person but judge their decisions. But I get paid to questions people decision making process, doesn't make me an expert but well trained. Your personal example would make me call you a fat tail of the 5% on one end of the bell curve.

 

[IGAdam]

That’s some really judgemental BS.
I was a very early order & was invited to the NY off road demonstration. While there and it was very gnarly slippery mud/leaves etc the demo driver & I agreed the vast majority of owners would never need the lockers. Centre diff lock being more than adequate (I own/have owned multiple Defenders/Series).
So I specced mine the most basic as possible as it was mainly going to tow as a company vehicle.
Unfortunately having to wait so long I had to cancel delivery as we needed a new vehicle much sooner. Mainly to tow a demonstrator to the 75th Land Rover anniversary & my “garbage” build was sold quickly to another customer.
Back in the market now for another “garbage” basic build but honestly pissed at various dealers who insist on you signing up to view their inventory.
Please be more considerate about other buyers needs & builds. Without doubt there are many fantasy builds but it’s not for us to decide.

There are some great "basic" builds at the CT dealer, fyi.

 

[dreamalaska]

I was a early adopters, I went to prototype tour, I went to off road drive event. I waited and waited for my build to arrive, only to have build show up on the dealers lots from people who didn't go through their build. Guess what, I'm still waiting but now it's my fault as I switched to the QM.

Garbage builds are throw away builds. Builds that are random. I never judge the person but judge their decisions. But I get paid to questions people decision making process, doesn't make me an expert but well trained. Your personal example would make me call you a fat tail of the 5% on one end of the bell curve.

No one needs to apologize or be attacked for stating their opinions.

It wasnt that long ago that respectfully disagreeing was an admirable quality, but the internet and “clicks” has changed discourse for the worse, IMO.