Prices of "Exclusive Motors closing it's doors... gotta move all our inventory ASAP"

[georgeinhere]

Did anyone look at the cars being sold by Exclusive Motors:

http://forums.pelicanparts.com/showthread.php?t=456527

I though that I would find a deal in there somewhere, not only are there no deals...the prices seem very high even for the best of times, what gives?

[Macroni]

oriental rug sale........

[RS#007]

Very high prices I also looked.

[GothingNC]

Are some of the vehicles listed being sold on consignment?

I would just send him a reasonable offer per the ad if you are interested since they are only listing "asking" prices.

[the]

The ad says that the cars on the website are the cars they own, not any consignment cars. That would make sense if they are going out of business. The consignment cars you'd just turn back to their owners.

You'd have to know what's going on to figure out what will happen with the pricing. For example, what they are going to do with their lease, and how long they can continue to subsidize the business with no revenue.

At some point, they are going to tire of losing money, or they will lose their lease (or make an arrangement to get out, although that is difficult these days), and the cars will really have to go.

I know several people in this industry, and they are going down one by one. The pattern is the same: They bought a bunch of cars at "pre-crash" (November 2008 or so) prices. As the stock market plummeted, and the value of used luxury/sports cars also began a major slide, retail prices went down, but these sellers hung on to their now above-market prices, hoping to avoid losses. But no turnabout came, and prices continued to slide.

Because the prices were no longer market correct, and the sellers would not take the loss, they ended up sitting on inventory, keeping up hope. That seems like what happened, as he says on his website that they have had no sales in the past 3 months.

This kills the business, because all they are doing is sitting on stale inventory, which gets more stale (i.e. overpriced) by the day. All their capital is tied up in the stale inventory, so they can't go out and buy cars at wholesale "post-crash" prices, which they can then try to turn quickly at post-crash retail prices. There is also fear and confusion caused by the lack of sales. So they are locked into a large amount of inventory that they are completely underwater on. The business is essentially in a death lock, frozen up.

It's sad to see, I've seen it happen to too many really good people, who were doing a good job for their customers, and taking a risk and living their dream.

(P.S. I don't know anything about Exclusive specifically, but this is what I've seen with very similar high end car businesses which are now closing up).

[TheGanzman]

Very succinct explanation!

[RS#007]

I agree. They should sell at current market value even if it is at a loss to get some money flowing and then buy at post "crash" prices and start moving again. Doesnt make much sense to not sell a car in 3 months when you sell cars for a living. What did they think would happen?

[the]

It's a lot like riding a stock down. You hold on, thinking *just one more day*, and a buyer will come and give me my price. Days stretch to weeks, then months, and before you know it you are completely under water on the inventory.

It's a very tricky business. During the good times, it's pretty easy for just about anyone to make money in it. But during the down times, which happens around every 7 years, a lot of independent small dealerships get flushed out. They aren't equipped or experienced on how to set up for the bad times.

This, however, is an exceptionally bad time. I know of dealerships who have been operating for 20+ years that have shut down.

With a small inventory of older Porsches, it would be very difficult to survive the next few years. The only hope would be to flush out the old inventory and get in at "post crash" prices, but the problem is it is an ever declining market. That makes it very difficult. In a rising market, time is actually on your side a bit (or at least doesn't kill you). If you don't sell a car in 2 or 3 months, it's ok in a rising market. But in a declining market, it is deadly.

The independent dealerships that are surviving tend to be those who have been around a while and have great connections and pipelines to very low cost (under market price) cars. They can get them, and flip them quick, like in a week or two, and make at least some positive profit (probably 40% of what they were making before). Like they say in the used car industry, a dealer makes his profit the second he buys his inventory car. If you have a way to get cars under wholesale market, you are golden. If a dealer pays retail for a car, he is dead on it.

[georgeinhere]

With that said, the only way to get "rid" of the inventory is by getting in front of a declining curve which could translate in pricing cars at 15% off the bottom of the market since the bottom is the new trading floor. These two guys are selling mediocre (value judgement based on pictures and descriptions) at super high prices...the good part about it all is that they get to keep their cars

[Macroni]

Originally Posted by RS#007

They should sell at current market

Thus the term current market..............

[DanielDudley]

The 928 GTS is lower than market.

Anyone interested in a car should make an offer.

[onlycafe]

throw in a free shamwow!