By on February 2, 2022

It’s a little early in the year to say anything definitive about 2022 vehicle volumes, however, the automotive industry has been signaling that production numbers should begin to rise in the coming months. While that sentence should be cause for a sigh of relief, there are parts of the industry that might not feel as good about it as you probably do.

With supply chain problems having drastically limited vehicle production during the pandemic, many dealers opted to price their goods well above anything that could be considered normal. This worked out poorly for many of the smaller outfits as larger retailers enjoyed record-breaking profits in 2021. Some manufacturers also benefited financially, as the chip shortage allowed them to prioritize their highest-margin products. Unfortunately for them, 2022 is likely to bring affordable vehicles back into play and gradually pull pricing closer to something approaching normality. 

Domestic manufacturers have actually been leaning into higher-margin vehicles for quite some time. General Motors, Ford Motor Co., and Fiat Chrysler Automobiles (now Stellantis) all spent the last decade removing sedans and economy cars from U.S. assembly lines to make room for crossovers and SUVs yielding higher price tags and better profits. But now they’re confronting a market that just spent the last year taking advantage of people in dire need of a new automobile (or simply too dumb to realize they were overpaying), continually rising production costs, a customer base that has less disposable income than it did two years earlier, and fuel prices that might make people think twice about buying anything too large.

Bloomberg recently extrapolated the implications of this for General Motors in a recent article, concluding that it might not even be in the automaker’s best interest to resume building economy-minded vehicles. This might sound counterintuitive considering last year’s stalled volumes allowed Toyota to take the U.S. sales crown from GM. But Chief Financial Officer Paul Jacobson has already told the public that the company expects noteworthy production gains (estimating a 25 percent YOY increase in the first quarter), adding that the bump also means higher input costs and lower margins that could negatively impact overall profitability.

From Bloomberg:

The Detroit-based automaker is “seeing sizable supply chain pressure on commodities,” Jacobson said.

GM expects 2022 earnings roughly in line with the year just ended. The company forecasts adjusted earnings before interest and taxes of $13 billion to $15 billion in 2022 and adjusted earnings per share of $6.25 to $7.25. That compares $14.3 billion in adjusted earnings last year and $7.07 a share.

“With an improving outlook for semiconductors in the U.S. and China, we expect our 2022 results will remain strong,” Chief Executive Officer Mary Barra said in a letter to shareholders.

Shares of the carmaker rose 2.1 [percent] in premarket trading, building on Tuesday’s gains of 2.5 [percent] following the earnings announcement. The stock is down 7.8 [percent] this year.

Barra told reporters on a call that GM expects to benefit from pent-up demand on the order of several million vehicles in the U.S. alone, something she said will likely keep retail prices elevated.

Helping the cause is the $13,600 Chevrolet Spark that the manufacturer has decided to kill off in the summer. The sacrificial lamb is basic transportation and the cheapest General Motors had in its whole roster. That honor will now go to the $21,400 Chevy Trax crossover, which I would argue doesn’t compare all that favorably. But GM can get better margins with the Trax — and that’s the whole point.

Expect other manufacturers who’ve ditched a responsibly varied lineup to go crossover and pickup crazy to engage in similar behaviors. While the industry-wide transition toward EVs will also come into play, truly affordable all-electric options won’t be available for a few more years.

As for dealers, most have remained confident that elevated vehicle pricing will persist well into 2022 and ensure continued profitability. However, we can’t really say how things will look by autumn. Consumers might begin seeing if they can wait things out until prices decline and lots are fuller and we’ve no real idea when the semiconductor shortage will dissipate. We’ve heard the industry repeatedly suggest it’s going into its closing act over the last few months. But that’s also what we were told at the start of 2021.

The National Automobile Dealers Association (NADA) currently believes that light-vehicle inventories will continue to be strained throughout 2022. While NADA leadership has said it believes volumes will improve, it doesn’t anticipate production to be anywhere near levels witnessed before the pandemic and is assuming it can keep pricing unreasonably high until at least 2023.

[Image: Phil K/Shutterstock]

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58 Comments on “Industry Braces for Increased Volumes, Lower-Margin Vehicles...”


  • avatar

    Volumes will rise until everybody get vaccinated.

    • 0 avatar
      RHD

      There are enough halfwits believing the CCCP misinformation and conspiracy theories that we will never have a fully vaccinated population.
      The exception is if a very virulent and deadly strain of Covid comes out which is fatal to anyone without a vaccination. It would be tragic, but nature figures out a way to cull the weak and weak-minded.

      • 0 avatar
        28-Cars-Later

        The so called authorities have been caught in so many lies and later revisions of “facts”, they simply cannot be believed. I fully expect someone to drop a real weapon at some point but the question is who will be left standing, the injected or those who chose not to be? I would expect the injected to somehow be unaffected by this weapon since they were the compliant sheep but with altered immune systems perhaps not. Time will tell, hopefully we won’t have to experience a real life version of The Stand.

        • 0 avatar
          dal20402

          Good grief. Roughly half the world population has had at least one shot. If it opened any significant number of people up to other immune-system problems (or any other problems, for that matter) we would have overwhelmed the health-care system in a way that would have made COVID itself look like a walk in the park. There are few medicines in the world with a stronger data set supporting their safety.

          I got two Pfizer shots in April and May 2021 and then a Moderna booster on the first workday of 2022. Pfizer shot 1 made me feel a bit unfocused for an afternoon. Pfizer shot 2 made me tired with a sore throat for most of a day. The Moderna shot put me to sleep for most of the following afternoon. No lasting effects from any of them, except that I’m much less likely to die if I get COVID.

          (I had a horrendous flu-like illness in early February 2020, right as the very first cases were hitting the US at ports of entry like Seattle, that I think may have been COVID. I haven’t had serious symptoms or tested positive since.)

          • 0 avatar
            sgeffe

            I had a weird flu thing in early December, 2019 which didn’t sap my appetite like a flu usually does, followed by the worst cough I’d experienced in decades for roughly three weeks, just before COVID-19 entered the lexicon.

            Unfortunately, I never got an antibody test to figure out if it was indeed the ‘Rona.

      • 0 avatar
        SnarkIsMyDefault

        “the CCCP misinformation”

        At this point it isn’t clear if your talking about Fauci’s statements or the attack’s on Fauci. The same language has been used both ways so often I can’t believe anyone would use it without being so deep in their personal bubble so as to not believe they are in one.

        • 0 avatar
          jkross22

          That’s a specious argument. Here’s why….

          As a public health official and part of the Federal Government, we should all expect Fauci to exhibit some level of professionalism while doing his job. Thinking about it, I’m not really sure what Fauci’s job is. Maybe he’s great at what that actual role is. If it’s communicating health information to the population, he’s failed and with dire consequences.

          People criticizing the government in a broad sense or specific people working within the government don’t have to exhibit professionalism. They’re exhibiting (hopefully and sometimes) good citizenship, holding our representatives accountable. Protests usually aren’t professional, but it’s a sign that citizenship isn’t completely dead.

      • 0 avatar
        tomLU86

        Half-wits? Really?

        There are not enough of them. They are surrounded by masses of ignorant people who don’t see all the adverse effects these shots.

        If the shots don’t protect against Omicron, what makes you think they will protect you from a “virulent strain”?

        Make sure to wear your mask at all times.

      • 0 avatar
        spookiness

        @rhd, here’s hoping.

      • 0 avatar
        Dave M.

        Let’s go, Darwin!

      • 0 avatar
        jalop1991

        these aren’t “vaccines”. They’re shots. And in the end, everyone will get the virus and will pass it along.

    • 0 avatar
      FreedMike

      I propose the word “vaccine” be banned from this website, effective immediately. People believe what they want to vis a vis the pandemic, and all the stupid name-calling associated with this “debate” isn’t going to change anyone’s mind.

      • 0 avatar
        28-Cars-Later

        I agree. According to their SEC filing Moderna calls their product “gene therapy” (top of page 70) so probably better to call it what it is.

        “Currently, mRNA is considered a gene therapy product by the FDA. Unlike certain gene therapies that irreversibly alter cell DNA and could act as a source of side effects, mRNA-based medicines are designed to not irreversibly change cell DNA; however, side effects observed in gene therapy could negatively impact the perception of mRNA medicines despite the differences in mechanism.”

        https://www.sec.gov/Archives/edgar/data/1682852/000168285220000017/mrna-20200630.htm#i8ebe2c9c2ccd487c851f72dd23b1630b_10

        • 0 avatar
          FreedMike

          I call it a way to keep myself from getting overly sick with this damn virus. So far, so good. Besides, I’d rather spend my money on having a nice time, versus a hospital bill.

          In fact, I think the “hospital bill” angle would be a splendid idea for promoting the idea of getting the shot – showcase folks who didn’t, and ended up with a six-figure ICU bill.

        • 0 avatar
          Arthur Dailey

          ‘Fully vaccinated individuals diagnosed with COVID-19 were significantly protected from severe outcomes. Compared to unvaccinated cases, fully vaccinated cases were 74% less likely to be hospitalized and 80% less likely to die as a result of their illness (Table 3)’.

          https://health-infobase.canada.ca/covid-19/epidemiological-summary-covid-19-cases.html

          • 0 avatar
            Lou_BC

            @Arthur Dailey – why let facts get in the way of a COVID – 19 debate?

            @Inside Looking Out – “Well, here’s another nice mess you’ve gotten me into!” Oliver Hardy

      • 0 avatar
        Skippity

        I second that proposal.

  • avatar
    Lou_BC

    The small dealer chain my son works for has been selling most of their used vehicles in the USA due to high sales prices. They are making a killing despite having to ship vehicles 500 miles south.

  • avatar
    28-Cars-Later

    “That honor will now go to the $21,400 Chevy Trax crossover, which I would argue doesn’t compare all that favorably”

    That means the manufacturing/importing etc. cost of complete garbage must be in the 17-18K per unit range. Scary.

  • avatar
    SCE to AUX

    “…a customer base that has less disposable income than it did two years earlier, and fuel prices that might make people think twice about buying anything too large.”

    These are false claims.

    Real, actual customers are paying substantially more for new and used cars. Even if the average American has less money (which I also don’t believe), the customers buying cars obviously have more money.

    Perhaps 2022’s customers are not the same profile as 2019’s customers.

    Adjusted for inflation, fuel prices are the same as the last 40 years:
    https://www.randomuseless.info/gasprice/gasprice.html

    With the market surge toward larger vehicles, it seems obvious that almost nobody really cares about fuel prices. I’ll believe they care when they stop buying F-150s.

    • 0 avatar
      Matt Posky

      I’m not sure what point you’re trying to make here.

      People care about fuel prices today and several million fewer people bought cars in 2020 and 2021 than in a typical year. Did you not watch fuel prices surge up over the last 12 months with the rest of us? Did you witness car prices shoot through the roof? Have you missed our articles about how loan agreements are just getting wilder and people are getting themselves deeper into debt? Have you not seen the latest jobs report for the United States? We lost 300,000 jobs last month.

      • 0 avatar
        FreedMike

        “Have you not seen the latest jobs report for the United States? We lost 300,000 jobs last month.”

        The “jobs report” is from ADP, not the Labor Department.
        https://www.foxbusiness.com/economy/us-companies-january-hiring-adp-report-2022

        Nevertheless, here’s an interesting quote from that article:
        “The job losses were concentrated heavily in the leisure and hospitality industry, one of the sectors hit hardest by the pandemic. The industry shed 154,000 jobs in December as consumers opted to stay home to avoid the new variant.”

        And this:
        “A Census survey shows that an estimated 8.75 million Americans said they were not working in early January, either because they were infected with COVID-19 or taking care of someone else who had contracted the virus. That’s a huge jump from December, when 2.96 million people reported they could not work due to the coronavirus.”

        Wow, sounds like this COVID thing is really serious. One might ponder: is there a way to keep people from getting too sick to work with COVID? Golly gee, if there were only a medication to make that happen…what would that be?

        I’m absolutely stumped.

        • 0 avatar
          ToolGuy

          FreedMike, 11:22AM: “I propose the word “vaccine” be banned from this website, effective immediately. People believe what they want to vis a vis the pandemic, and all the stupid name-calling associated with this “debate” isn’t going to change anyone’s mind.”

          FreedMike, 11:40AM: “Wow, sounds like this COVID thing is really serious. One might ponder: is there a way to keep people from getting too sick to work with COVID? Golly gee, if there were only a medication to make that happen…what would that be?”

          Does your brain ever hurt from being so smart?

          • 0 avatar
            FreedMike

            Notice I didn’t use the v-word.

            But the point stands: if more people were smarter about prevention, a lot of these problems would solve themselves. The whole anti-you-know-what movement is a self inflicted wound.

      • 0 avatar
        Arthur Dailey

        Mat, Credibility would be enhanced if you referenced ‘reliable’ sources.

        ‘The US unemployment rate dropped to 3.9 percent, the lowest since February 2020, pointing to a sustained recovery in the job market helped by a fast-recovering economy and strong demand for labor. The rate was still slightly above pre-crisis levels amid reports of severe labor shortages, but should decline further in the coming months as companies fill widespread vacancies. The number of unemployed persons decreased by 483,000 to 6.3 million. source: U.S. Bureau of Labor Statistics.’

        https://tradingeconomics.com/united-states/unemployment-rate

        https://www.bls.gov/charts/employment-situation/civilian-unemployment-rate.htm

      • 0 avatar
        jkross22

        Matt,

        Some people are more committed to believing a narrative vs believing the truth. We all have biases, but pretending they don’t exist turns them into a blind spot.

        The idea that a lot of people don’t need a cheap efficient car when gas prices are at this level just aren’t interested in exploring the reality of life for a lot of people not in their position.

        It’s astounding.

        • 0 avatar
          FreedMike

          Welcome to capitalism, jk. Companies do what make them the most money. Right now, that means making larger, more expensive vehicles. I suppose we could mandate that they build smaller, cheaper stuff that gets better fuel economy, but then the “jackboot of government on the throat of enterprise” crowd would lose their cookies.

          I think the folks you’re talking about would probably be best served by greatly expanding car-ownership options, particularly transit, or ride-sharing. Maybe if more people were able to get themselves on their feet financially BEFORE they took out car loans, versus having to take them on as a requirement to have employment whether they were on their feet or not, more car loans would be taken out “responsibly.” And I speak from experience on that last point.

          • 0 avatar
            ToolGuy

            @FreedMike – like, right now – does your brain hurt?

          • 0 avatar
            FreedMike

            Mine’s fine. How’s yours?

          • 0 avatar
            jkross22

            Mike, IIRC, you live in the Denver area. How’s mass transit in Denver and the surrounding areas? If it’s anything like LA, it’s a hodgepodge. How’s mass transit in the winter when you have to walk to get to where you need to go? At least here we have the weather… and fires, mud slides, looting, etc.

            Mass transit in a few huge cities is fine. Outside of that use case, it’s spotty at best.

            As for other options, agreed. Hopefully we’ll get there. In the meantime, it’s the working poor continuing to take it on the chin. As usual.

          • 0 avatar
            FreedMike

            @jk:

            Mass transit here is hit or miss, which is why I think it should be expanded. Given Denver’s newly ridiculous cost of living, I think expanding transit makes even more sense. And, yeah, it’s challenging to use under some circumstances, but if I were unable to afford a car, I’d rather have to and deal with the inconveniences than worry about not being able to afford my car.

  • avatar
    jkross22

    The car market is as always and equation of supply and demand. It’s just that now we’re seeing evidence that the suppliers are withholding availability of lower priced options. That combined with dealers marking up Civics makes the problem worse.

    The good news is that someone will eventually jump in and fill that gap. The idea that there’s no demand for lower priced vehicles sounds silly because it is. No one’s buying cheaper cars because they’re not available isn’t a ringing endorsement of the idea that no one wants cheap cars.

    • 0 avatar
      Jeff S

      Agree there are still a number of customers who want new less expensive vehicles. What the Big 2 1/2 leave behind will be filled with other less expensive competitors. Even though Hyundai and Kia are now making more expensive vehicles expect them to continue making less expensive vehicles for those first time new buyers who don’t have the resources or the credit to buy a more expensive vehicle especially with a shortage of good used lower mileage vehicles. Also expect the Chinese and maybe even the Vietnamese to enter the market with more affordable EVs. The feast will not last forever and eventually there will be a downturn in the economy once the interest rates go up and the chip shortage subsides.

      The Big 2 1/2 will be headed toward a similar situation to the 70s when gas prices rise and most of their products will be big trucks and suvs (today’s land yachts).

      • 0 avatar
        tomLU86

        Yes, Hyundai/Kia is poised to benefit from the trends of higher fuel prices, lower disposable income, and rising prices.

        Some random elements to consider:

        If the dollar loses a lot of value against the Asian currencies.

        How hard will the current govt push for electric cars?

        What will happen if the Democrats are trounced in 2024 with electric cars?

        Except for Tesla, which is really a Lexus/Mercedes/BMW competitor, the other EVs cannot succeed without massive govt help.

        • 0 avatar
          Jeff S

          Make an inexpensive EV with decent range and no subsidies are needed. As for Hyundai and Kia they both have manufacturing plants in the USA. Detroit will keep raising their prices and selling more expensive large trucks and suvs. The auto market will be wide open for more affordable new vehicles especially if are less used affordable vehicles that are not worn out. Producing less new vehicles during the pandemic will eventually mean less used vehicles in the future. These things will happen regardless of which political party is in power. The chip shortage and inflation are not just limited to the US they are a global issue. The EV push is happening not just in the US but in Western Europe and in China which will continue to push EVs regardless of Democrats or Republicans. Most of the auto corporations are global and market their vehicles globally with the exception of the ever shrinking GM. China is now the largest automobile market in the World.

        • 0 avatar
          FreedMike

          @tomLU86
          “What will happen if the Democrats are trounced in 2024 with electric cars?”

          I wasn’t aware electric cars could vote.

          @Jeff S:

          I think EVs, as they exist now, aren’t the best choice for cheap-car shoppers because I suspect those same shoppers tend to be the ones who don’t have access to a dedicated charger. I believe EVs will happen the same way personal computers and smartphones did – people with money will buy them first, and then as the prices drop, the infrastructure to make them more affordable to people at lower incomes will be developed. My two cents’ worth, anyway.

          • 0 avatar
            Jeff S

            Agree as personal computers were not an option for most people outside of business in the early 80s. Lower prices and internet have made home computers a part of most homes. Charging infrastructure will grow and better less expensive EVs will be made. It will not be Tesla, Ford, GM, or a host of the other traditional manufacturers that will make this happen it will be imported EVs from China, Vietnam, and other developing countries. US manufacturers are more interested in selling large expensive trucks and suvs whether they be ICE or EVs and have little incentive to change until they are bankrupt and the Government bails them out. I will not be buying an EV anytime soon but that doesn’t mean I won’t especially if the charging infrastructure expands and more affordable EVs are available. So I add my 2 cents to your 2 cents.

          • 0 avatar
            tomLU86

            My error.

            Meant to type, “If the Democrats are trounced in 2024, what will happen with electric cars?”

            Will their (already excessive) subsidies be cut? Will the Federal govt cut spending (other subsidies) on fast-charging stations, or subsidizing EV/AV R&D at the automakers?

            But I’m sure that many Democrats, especially the President (“… yeah, why can’t electric cars vote? Voting rights, yeah…”) would embrace electric cars voting.

            Dead people do. Absentee ballots replicate.

          • 0 avatar
            mcs

            “Will their (already excessive) subsidies be cut”

            They’ve already been cut for some manufacturers. The most popular EVs don’t even have subsidies.

            “subsidizing EV/AV R&D at the automakers?”

            There’s a very heavy interest in battery and EV tech by the military. Aside from battery powered battlefield gear and drones, one example is the use of e-bikes by special forces. The helicopter, because it’s noisy, drops the troops off miles away on e-bikes. Then, they can move in quietly and quickly and do their thing, then get out. Several armies are experimenting with them. Other uses are smart weapons.

  • avatar
    kcflyer

    …and you get a new maverick, and you get a new maverick….

    • 0 avatar
      Jeff S

      Yes I will be getting a new Maverick eventually but the production date has changed from the week of Feb 14 to the week of March 14. It is not just the chip shortage but the Maverick is being produced in the same plant as the Bronco Sport with Hermosillo’s total capacity of 300k vehicles a year with only 80k Mavericks being built for MY 2022 despite over 100k reservations. Ford will either have to find an additional plant to make Mavericks or dedicate the Hermosillo plant to make just Mavericks. I doubt the Maverick is just a flash in the pan and the demand for Mavericks will grow as there are not too many new affordable options.

  • avatar
    Varezhka

    We already knew this was coming before the pandemic.
    Now the big question is, will this reduced competition finally allow Nissan Versa and Mitsubishi Mirage of the world to make profit? Or will potential Spark buyer accept the 60% price jump?

    • 0 avatar
      Matt Posky

      Hopefully they’ll buy the Versa.

    • 0 avatar
      28-Cars-Later

      What will happen soon is the $12,999 Mirage will now run you $23,999, get ready for a Civic/Corolla base for $29,995. Thanks JPow/Brandon/”voters”.

      Just in case your fill of insanity wasn’t enough, the “$13,600 Chevrolet Spark” (which I presume is the LS trim then destination) actually pulls 17 in extra clean condition on the block. Yes the used Spark is worth more than the price GM was apparently quoting. Wholesale. This means a retail used Spark in extra clean condition will probably run $20K. The Daewoo Spark. Used. $20K.

      To paraphrase a former elected president’s campaign, it’s midnight again in America.

      MY21 CHEVROLET SPARK 4D HATCHBACK LS

      1/21/22 $17,000 1,484 4.9 4G/A Blue Regular Northeast Pennsylvania
      1/19/22 $17,100 1,651 4.4 4G/A Silver Lease Southwest New Mexico
      1/20/22 $17,000 3,488 4.6 4G/A Orange Lease Southeast Tampa
      1/25/22 $14,000 3,634 4.7 4G/A Gray Regular Southwest Houston
      1/14/22 $16,250 5,879 4.0 4G/5 Silver Regular West Coast Nevada
      1/25/22 $18,600 6,602 4.5 4G/A Red Lease Southeast Orlando
      1/16/22 $11,600 7,236 2.1 4G/A White Lease Midwest Louisville
      1/13/22 $16,800 7,626 4.9 4G/A Blue Lease Midwest Cincinnati
      1/6/22 $16,800 8,260 4.9 4G/A Beige Lease Southeast Mississippi
      2/2/22 $14,600 8,278 2.4 4G/A Red Regular West Coast Utah
      1/4/22 $18,000 9,918 4.8 4G/A Blue Lease Southeast Georgia
      1/18/22 $16,900 10,316 4.4 4G/A Gray Lease Southwest Dallas
      1/18/22 $14,750 14,032 3.7 4G/A Blue Lease Southwest Dallas
      1/19/22 $16,200 17,620 4.2 4G/A Orange Lease Southeast Central Florida
      1/11/22 $14,100 21,985 3.2 4G/A Gray Lease Southeast Statesville
      1/5/22 $14,200 24,665 2.8 4G/A Orange Lease Southeast Central Florida
      1/18/22 $13,800 28,682 3.8 4G/A Blue Lease Southeast Statesville
      1/25/22 $13,100 29,226 3.5 4G/A Black Lease Southeast Orlando
      1/6/22 $13,100 30,392 3.7 4G/A Purple Lease Southeast Tampa
      1/28/22 $12,100 48,489 – – 4CY/A Beige Regular West Coast Phoenix

  • avatar
    swester

    Boy, this is going to hurt for the folks carrying loans on the ludicrously overpriced cars they’ve decided to buy over the past year.

    • 0 avatar
      JMII

      Correct. In normal times cars lose 20-30% in depreciation in the first year but if you paid over MSRP within the last year you are going to a take a major bath and be massively upside down.

  • avatar
    ToolGuy

    Prophets everywhere. (Some of them with degrees from Auburn.)

  • avatar
    FreedMike

    At first glance, a move to cheaper cars would definitely would have an immediate benefit to one company in particular: Hyundai/Kia, which has an excellent selection of cheaper vehicles that are actually quite good (the Accent, in particular, is a darn nice little car). Nissan would also benefit.

    Far as the D2.5 (only counting Stellantis as a .5 at this point) are concerned, it wouldn’t be too hard for them to get back in the cheap-car game pretty quickly – all of them build smaller cars for other markets that could be introduced here fairly easily. All are built overseas or in Mexico, which would keep the price down in theory. GM, in particular, could hop on this very quickly with stuff made in Korea.

    And the biggest threat to larger-vehicle sales isn’t gas prices – those fluctuate, so despite the non-politically-motivated bleatings of certain folks, they will come down. But tighter credit would definitely have an impact. A shopper looking at a 96-month F150 loan knows that gas prices will eventually come down, but that monthly payment is there to stay for the next eight years. That’s enough to give anyone pause – even someone without the common sense to know that an eight year vehicle loan is a derpy idea.

    • 0 avatar
      28-Cars-Later

      “Far as the D2.5 (only counting Stellantis as a .5 at this point) are concerned, it wouldn’t be too hard for them to get back in the cheap-car game pretty quickly”

      Doubtful, they learned from Dart/200 and to a lesser extent the Fiat 500. I do see PSA spec product coming but it will likely be around EV compliance models. What will be interesting to see is how whatever in the pipeline now will be impacted by the recent kick-them-when-they-are-down 40mpg CAFE rules. Unless the PSA EV product is somehow going to compensate, they are going to have to figure out a way to jam hybrid drivetrains into the existing product/pipeline product (unless the pipeline product is accounting for this).

      I agree with your later points.

      • 0 avatar
        FreedMike

        “Unless the PSA EV product is somehow going to compensate, they are going to have to figure out a way to jam hybrid drivetrains into the existing product/pipeline product (unless the pipeline product is accounting for this).”

        Well, that should be good news to the “hybrids, not EVs” crowd, I suppose.

  • avatar
    NJRide

    If the current market doesn’t re-price and supply adjust by summer, we could see many who need to buy move down a segment. But the prices definitely are discouraging many and removing people who would normally be in market. I’m also not sure how much higher the 12 year median fleet age can go.

    • 0 avatar
      Jeff S

      I think the average fleet age could get a lot higher. I could see 15 years easily.

      • 0 avatar
        DenverMike

        The auto aftermarket had been exploding exponentially even before the China Crisis.

        It’s a huge story but it’s not what automakers love hearing. All day I’m seeing old classic cars and trucks, averaging ’80s, looking like they were pulled out of the weeds getting flatbedded in every direction. I’m guessing they’re not headed for the crusher.

        Well I love it, and it’s just one more reason to tell automakers were to stick it.

        • 0 avatar
          Jeff S

          After looking at Craigslist I would agree with your assessment. Around where I live a rusted out hulk that is barely running will easily sell for a couple of grand. Before Covid those same vehicles were feedstock for the crusher. Really bad time to buy an inexpensive older vehicle and that is why there will be a market for newer inexpensive vehicles even if they are from China, Vietnam, or other countries that are developing their auto industry. Fewer new vehicles being made during Covid means less used vehicle in the future and the US population is still growing especially those new drivers. Where I live the salt and chemicals used to treat roads during the Winter will eat a body up even with the better metal corrosion of today’s vehicles. Hard to find an older affordable used truck that hasn’t been eaten by the tin worm and most body shops will not touch a rusted vehicle regardless of how minor the rust is.

  • avatar
    johnny ringo

    Occam’s Razor-the simplest solutions are usually the best. Recessed tie down bolts to me sound like a better idea. The magnets would probably work on relatively small objects but in the case of large heavy objects like a refrigerator or a water heater you would probably need tie downs as well.

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Who We Are

  • Adam Tonge
  • Bozi Tatarevic
  • Corey Lewis
  • Jo Borras
  • Mark Baruth
  • Ronnie Schreiber