Sales

We keep hearing that the new car supply is recovering and that prices will eventually stabilize, but the situation on the ground at many dealers doesn’t align with that worldview. iSeeCars recently released its list of vehicles priced the highest over their MSRPs, and the news doesn’t suggest that we’ll see an easier car buying experience anytime soon.

We’re coming out of a few lean years in the auto industry. Automakers, struggling to keep pace with demand due to supply chain issues and a global pandemic, slashed incentives and even increased prices in some cases. Things are starting to calm down, at least a little, and the deals are slowly returning. 

The average monthly payment for a new car sold within the United States has reached a record $777, according to Kelley Blue Book’s parent Cox Automotive. That represents roughly one-sixth of the median household income and is about twice the price of what would have been considered average in 2019. How the hell has it managed to come to this?

According to the Sherlocks at Cox Automotive, Americans saw new-vehicle affordability decline in December and reached a new low for the 2022 calendar year.

And, in other news, the sky is blue and water is wet. 

If you’d been hiding under a rock and just started reading the news in the last couple of months, it’d be easy to wonder how Carvana is a thing at all. The company’s troubles seem to grow by the day, though a recent story out of Michigan shows a few bright spots for the online auto retailer.

Wholesale used-vehicle prices continued to climb during the last weeks of 2022, though the overall trend actually had secondhand valuations down by 15 percent for the entire year. That’s due largely to auction prices cooling off after the summer ended and the situation has many speculating that 2023 could be the first year we see massively inflated car prices begin to return to normal.

If you’re thinking that an ever-climbing percentage of the average household income is being allocated toward car debt – you’re exactly right. According to third-party industry watchers, the number of notes with a monthly payment of $1,000 or more has risen to record heights.

Following up on our sales post from earlier, we look to The New York Times, which has listed several possible reasons for why the numbers are dire.

The reasons are predictable, but that doesn't mean they aren't true.

After taking a drubbing in 2021, the last annum was also a headache for most of the world’s automakers. Nevertheless, General Motors has narrowly retaken the title of America’s best-selling car company after losing it last year for the first time since the Great Depression.

Stop us if you’ve heard this one before: A line of pickup trucks from Dearborn is the best-selling vehicle in America. There’s a very good chance you have indeed heard this before; after all, it’s been happening for 41 years. 

Alert readers may recall a post just prior to New Year’s about Tesla putting $7,500 cash in the frunk of several models in an attempt to juice sales before year-end. Beyond the irony of that move in the first place, after years of the company and its fanbase raking legacy automakers over the coals for doing the same thing, reports are surfacing that numbers still failed to meet expectations.

Ford's plan to divide its dealers by type of combustion system -- Ford Blue for internal-combustion vehicles, Ford Pro for commercial, and Ford Model E for battery-electric vehicles -- has hit a snag.

Despite ongoing dealer markups, rising interest rates, and evidence suggesting that new vehicles are suffering from a lapse in quality control, the automotive market is allegedly improving – at least in terms of sales volume. U.S. light-vehicle deliveries increased last month from the abysmal levels witnessed in October 2021. But the entire issue basically comes down to the industry managing to produce more cars than it had been.

If recent global events have taught us anything about the auto industry, it’s that unpredictability is the new norm. Gone are the days when one could confidently muse about the fortunes of one brand over another, replaced by erratic parts shortages and inconsistent volume of supply.

Still, some are weathering the storm better than others.

You've likely heard about the craziness that's happening at car dealerships right now. We've reported on insane markups, for example. And I've heard whispers, anecdotally, that so-and-so's friend's co-worker's cousin who's going with this girl who works at 31 Flavors got screwed when trying to buy a new car.

We return to Kia’s midsize-or-larger sedan history today in the latter portion of the 2000s. In our last entry, we learned about the Optima, which arrived as Kia’s first midsize developed under Hyundai’s majority ownership. Sensibly the Optima was a light rework of Hyundai’s Sonata, and the two shared almost everything (including very poor crash safety ratings).

On the more executive full-size side of the lineup, Kia’s Opirus was the first large car developed under Hyundai ownership. It shared a platform with the Grandeur (XG350 to you). While the Opirus saw okay sales in most markets, it failed in North America where it was sold as the Amanti. Very few North Americans wanted a $39,600 (adjusted) Kia, no matter how many luxury styling touches it borrowed from other brands. And so the Amanti was canceled after 2009 locally (2012 elsewhere). By that time its replacement was already on sale. Meet K7.

We return to the story of Kia’s midsize and larger sedans today, around the point when Kia found itself under the watchful eye of Hyundai. The larger South Korean company purchased a controlling stake in its competition in 1998, which meant big changes to Kia’s product almost immediately after.

The union led to the first full-size luxury sedan Kia developed from the ground up, the Opirus (Amanti to you). It turned out the Amanti was the derivative and rather ugly sedan few in North America desired, though it fared a bit better elsewhere. But by the time the Amanti arrived, Kia was already selling a new midsize that North Americans did want. Let’s talk Optima.

The U.S. light-vehicle market doesn’t appear to be in the best health. While many automakers now opt against issuing monthly sales reports, those that still do are posting some pretty brutal numbers.

This does not bode well for an industry that seemed pretty certain that 2022 would be its recovery year. However, it is on-brand with the slew of announcements made by manufacturers warning about supply constraints and an inability to manufacture at scale. There has also been a growing sense that some consumers may be shunning vehicles that have spent the last several months trading well above what seems rational. Wholesale pricing actually declined by roughly 6 percent since the January record. Though you may not see that represented on dealer lots or even have noticed if it was because last month still saw transactions averaging 14 percent higher than they were last year.

As a fan of the midsize luxury sedan class, it’s sad to see how many manufacturers have given up on the segment. The German trio still has their stalwarts, but Japan gave up in 2020 (RIP Lexus GS), the only American still in the ring is the Cadillac CT5, and its outlier status is accompanied by newcomer Genesis with the G80.

It’s a dying class, which is why your author was especially pleased to spend the Memorial Day weekend with a longstanding headliner of the German luxury sedan genre: A 2021 BMW 5-Series.

In our last installment of Kia’s larger sedan history, we covered the midsize Credos. The Credos was an important first for Kia, as the first midsize the company produced where it had a bit of leeway with the design. Ultimately, the Credos hid its Mazda 626 bones decently well and did a good impersonation of a late Nineties Ford Contour after a refresh.

But just as Kia settled into Mazda platforms and designing their own sedans, the goalposts were moved courtesy of the 1997 Asian financial crisis. Kia was left without much money, and few options. We pick up there.

Today’s topic is an automaker you’ve likely never heard of. It’s a small company that was founded not that long ago, offers vehicles in very limited markets, and produces around 600 vehicles per year. Its product is based upon old ideas from other manufacturers, all done up in fiberglass until very recently. Let’s enter the wonderful world of Wallyscar.

We return to our coverage of Kia sedans today and discuss a midsize from just prior to the flagship Enterprise we discussed last time. Kia offered the first midsize car to bear its branding in 1987 when it introduced the new Concord. Concord was essentially a broughamed, front-rear clip swap take on the GC platform Mazda 626. Mazda discontinued the GC 626 that year and immediately sold the platform and tooling to Kia. A couple of years later, the Concord spawned a lesser sibling called the Capital. Capital looked very similar to the Concord but sold to a more economically-minded customer with its much lower level of equipment and low-powered engines.

When the Capital finished up its run in 1997, it was replaced by a compact car Kia had on sale for a few years already: The Sephia. Sephia wouldn’t do for Concord-level customers though, and upon the sedan’s discontinuation in 1995 they were directed to an all-new Kia. The company was ready with its new midsize to bookend the Concord, and it went on sale the same year. Though the new car was again on a donated platform, it was the first time Kia had some leeway to design a midsize of their own. It’s time to discuss Credos.

We’ve reached the end of the Nineties in Kia’s midsize-or-more sedan story. It was a time of modernization across Kia’s portfolio, and 1998 and 1999 were years of expansion in particular: Kia introduced an impressive nine all-new models across those two years.

For its larger sedan lineup, the dated Potentia (a rework of the Eighties Mazda Luce) continued on in its popularity in the South Korean market. Potentia was updated from its original 1992 looks for 1998. However, that same year Kia introduced a new large luxury sedan to its lineup. The company once again relied on friendly product partner Mazda. Let’s talk about Enterprise.

We pick Kia’s large-car story once more today, at a point when the Korean manufacturer was in the midst of establishing itself as a proper full-line automaker, albeit with contributions from various other automotive firms. After Kia built Fiats and Peugeots via knock-down kits, it moved on to a light rework of the early Eighties Mazda 626. It made two cars out of the 626, its first midsize offerings. They were the upscale Concord and lesser (but still sort of upscale looking) Capital. But before we move on to the company’s first truly full-size car, we need to talk about the Mercury Sable for a moment.

We started our coverage of GM’s Eighties and Nineties branding adventures last week, with the short-lived experiment that was Passport. The dealership network was an amalgamation of GM-owned or influenced brands from Japan, Sweden, and in the case of the Passport Optima, South Korea. Passport lasted from 1987 through 1991 before GM changed directions. In addition to axing an unsuccessful sales channel, Geo and Saturn cars had arrived during Passport’s tenure and made things more complicated. Let’s learn some more about GM’s Canadian dealership networks.

In the Eighties and Nineties, General Motors of Canada decided to try new distribution strategies for its imported cars. Like in the recent Dodge Colt series, General Motors had its own captive import cars and trucks that were manufactured by other brands. But because of dealership arrangements in Canada, GM took things a step further than Chrysler and established a separate distribution network for its imported wares. The efforts lead to the thrilling Passport and Asüna brands for the Canadian market. First up, Passport.

If you frequent this website, there’s a good chance you’ve seen an article discussing how smaller car dealerships are being incorporated into larger entities over the last few years. As with most other industries, the trend has been accelerating and Automotive News just shared the metrics showing how far we’ve come over the last decade. According to the report, consolidation among mega dealers has made heaps of progress of late and should continue on with their mission of never-ending growth because none of them want to become the little guy after every pint-sized showroom has been bought up in North America.

The war in Ukraine continues to have ripple effects.

A new report from industry bible Automotive News suggests Vladimir Putin is considering seizing the assets of automakers who left Russia in the wake of its invasion of Ukraine.

According to a recently filed trademark application, Buick’s familiar tri-shield logo may be going the way of the dodo. It’s been suggested the potential logo change is in pursuit of a revised image, in preparation for the Brave New World of EVs that Buick will soon unleash upon millions of eager customers. However, given the company has been around for over 120 years this is far from the first time Buick has swapped its badge.

Recently on Abandoned History, we learned about the Colt, a captive import Dodge/Plymouth/Eagle/AMC/Renault sold courtesy of a badge swap on some compact cars from Mitsubishi. During that series’ tenure, one of our readers had a great idea: A separate Abandoned History discussion of the captive import trucks and SUVs in the Dodge portfolio. The time has come!

Today we complete our Rare Rides Icons coverage of the mass market, midsize, mid-Eighties Japanese sedan. We’ve covered the V20 Camry, the CA Accord, and most recently the PU11 Maxima. Now we take a look at the alternative to all those, the Mazda 626.

You’re probably well acquainted with dealer markups by now. Supply shortages created during the pandemic have left the world with fewer automobiles and car dealerships are taking full advantage of the elevated demand. As you might have expected, this trend resulted in plenty of people overpaying or becoming cautious of a market they now see as wildly predatory.

Car manufacturers have begun asking dealerships to take it easy on the price gouging. General Motors made its plea last week and Ford has followed up by reiterating its own concerns during the company’s Q4 2021 earnings report. The Oval is worried that dealer markups are tainting its relationship with customers, with top executives making casual references to the trend back in November. Ford CEO Jim Farley is now telling dealers that they need to cut it out lest they be punished by the manufacturer.

While it may not be on the cusp of supplanting Toyota in terms of sales, the Porsche brand has enjoyed relatively consistent growth since 2009. Despite 2020 representing a poor sales year for just about everyone who wasn’t producing vaccines, the German manufacturer weathered the storm better than most and came back to break a few records the following year.

By the end of 2021, Porsche had sold nearly 302,000 vehicles globally. It also managed to break its previous sales records in China and the United States. Considering that global production volumes have remained suppressed by supply chain problems, it was an impressive accomplishment. However, Detlev von Platen, Executive Board Member Sales & Marketing at Porsche AG, believes the automaker can still outdo itself in 2022.

For the first time since American muscle returned to the assembly line in earnest, Dodge’s Challenger has managed to outsell both the Ford Mustang and Chevrolet Camaro inside the United States. Though Mopar fans might point out that Dodge would win every year if we bothered to include Charger sales in the headcount or were more precise when making determinations about what constitutes a muscle vs pony car.

Regardless of semantics, the Big Three have their performance icons and the Challenger has taken the two-door sales crown for the first time in modern history. Sadly, it was less about Dodge making inroads with new customers than it was about the other brands flubbing things. Performance vehicles aimed at the middle class are presently experiencing a rough patch, with the Challenger having lost the least amount of ground in the last decade.

After years of Ford unsuccessfully trying to court the Chinese market in the same way General Motors did, Blue Oval has finally hit an important milestone. For the first time ever, the Lincoln luxury brand has achieved more sales in China than in the United States.

On Thursday, Lincoln announced that it had delivered more than 91,000 vehicles in China in 2021 – representing an increase of 48 percent increase against 2020. Meanwhile, the brand managed to lose ground in North America with just 86,929 sales for last year. That’s the worst Lincoln has seen in over a decade, though the company has basically witnessed its share of the U.S. market seesawing in the wrong direction since the 1990s.

Japanese automaker Toyota Motor Corp looks set to embarrass American automakers on their home turf by ending the year as the U.S. market’s top-selling brand for 2021.

Toyota had previously reported it moved 688,813 vehicles in the United States from April to June, outperforming General Motors and setting the stage for the rest of the year. At the time, the domestic manufacturer claimed its numbers were down due to the global semiconductor shortage that continues to disproportionally impact American automakers. While there are a few sound logistical reasons for that, the chip deficit also becomes a convenient excuse for brands that cannot seem to get their general supply chains under control. No matter how you slice it, GM looks to have screwed up managing inventory and Toyota is picking up the slack.

With so many articles discussing how poor automotive sales have been through 2021, one could be forgiven for thinking this was going to be a hard year for anybody owning a dealership. However, the reality of the matter is that it’s a seller’s market and those who can sell are making a killing off everyone else’s misery.

The National Automobile Dealers Association (NADA) has reported that the ongoing deficit of product has helped the average store rake in more money than they did in 2020, breaking the previous twelve-month profitability record. Today’s average dealership is reporting a net pretax profit of about $3.38 million through October for 2021. That’s more than twice what was tallied within the same timeframe last year and really goes to show how much money can be made when the customer’s needs are the only items being discounted.

While the official figures haven’t dropped, just about every outlet tracking new vehicle sales is projecting a significant decline in volume for December 2021. Showrooms have been trending toward the minimalist aesthetic since 2019 with the pandemic kicking things into overdrive as supply bottlenecks nullified practically every manufacturer’s ability to produce anywhere near its normal pace.

Last December was bleak, with sales falling by around 5 percent for the month as the typical transaction price for automobiles set new records. The U.S. market only saw 1.54 million sales, the lowest volume witnessed since December of 2014. But 2021 volumes are shaping up to be decidedly worse. This month is on track to fall by anywhere from 23 to 30 percent with retail sales barely cresting 1 million units as transaction prices for both new and used vehicles surpass all previous metrics.

Sort of like the Cimarron we covered in our last edition of Abandoned History a couple of months ago, today’s vehicle is pretending to be more than it is. It’s the luxury X-Class truck Mercedes-Benz sold in markets outside the USA. Can you tell what it actually is?

Used-vehicle prices set another record last month thanks to elevated demand and suppressed production of new cars. Depending on who you ask, the typical transaction fee for a secondhand automobile rose nearly 50 percent in November vs the same period in 2020. While the pandemic had meaningfully suppressed demand during that time, that’s still a staggering increase over any 12-month period.

Sharing Cox Automotive’s Manheim Used Vehicle Value Index, Automotive News nailed down the annual difference to a 44-percent increase. This also represents the November pricing index swelling by 3.9 percent against October, which is noteworthy in itself. But what does that look like in dollars?

Audi recently announced a new, super luxurious version of its largest sedan, and it’ll wear some branding not seen in a very long time. Wake up Horch, it’s 2022.

Earlier this week, someone sent me an addendum sticker from Mercedes-Benz of Selma, in Texas. The addendum added two line items to the sticker price. The first line item was VIN etching, at $199. That’s controversial enough, since some people have said that VIN etching is the scam of the decade – but those people haven’t seen the second item: A “Market Adjustment” charge for $125,000.

You read that right. One-hundred and twenty-five thousand U.S. American dollars – and that’s on top of the Mercedes-Benz G63 AMG’s already steep $178,000 asking price. But, frankly, it’s not the 70 percent markup that’s the most offensive thing here, It’s not even the $199 charge for the VIN etching.

Frankly, the worst part of this is that MB of Selma will very likely get their markup. And, when they do, they will deserve every single penny.

Ford and General Motors are both slated to show their third-quarter earnings reports on Thursday.

Reports suggest that despite the negative impacts of the global semiconductor chip shortage, there may be positives for the companies, as well.

The same forum that told us to anticipate the order bank opening for the 2022 Ford Lightning next week is now saying “not so fast, my friend” (apologies to Lee Corso).

With automobile prices ballooning to egregiously high levels, one might assume that the industry would be in rough shape. But they’d be dead wrong. Supply chain disruptions have actually created a captive market where consumers are desperate to lay their hands on whatever products are available. In the automotive realm, this has allowed retailers to set ludicrous prices and rake in larger profits per transaction. While inflation may eventually catch up to these entities, the gravy train is currently parked at the station and dousing big business with its warm, brown effluence.

Nobody knows this better than the folks at AutoNation. Because the company just released a quarterly profit report that blew its rosiest projections out of the water. Net income its ongoing operations was $361.7 million for Q3 2021, double the $182.6 million witnessed in Q3 of 2020, while revenue rose 18 percent to $6.4 billion.

Sometimes car companies get a bit carried away with a new idea that, for a myriad of reasons, doesn’t translate so well in its execution. Toyota (and other Japanese companies) did exactly this when they invested in the very unsuccessful line of WiLL cars and other consumer products in the early 2000s.

Today we look at a 1980s domestic example of an idea that fell flat. It was the time Cadillac thought applying lipstick to a Cavalier-shaped pig would make the BMW and Mercedes-Benz 190E customer come a’callin. It’s time for Cimarron, a J-body joint.

While nobody needs to tell you that the economy isn’t in good health, we should at least hip you to the latest automotive trends relating to the financial purgatory we’re currently living through. Ford sent a memo to dealers last week indicating that it would be removing the minimum FICO requirement for 84-month financing, indicating that the industry may soon normalize auto loans that are even longer than the 72-month whoppers that have grown in popularity over the last several years.

Meanwhile, those needing a vehicle intermittently will find that rental rates have not been declining as hoped. Despite analysts previously suggesting that auto pricing may stabilize through the fall, we now look to be going into the holidays facing familiar high-priced troubles — and there’s really no reason to think that’s going to change after 2022 gets here.

Despite manufacturers still managing to turn a profit, the automotive sector hasn’t been in the best of health these last few years. Growth appears to have plateaued in most Western nations, encouraging companies to cater this business toward other markets, supply chains have also been negatively impacted by the pandemic — with semiconductor shortages hindering production schedules on a scale we’ve not seen since the Great Recession.

It’s a bad situation and rumored to get worse if the warning cries of economists are to be believed. But there’s also mounting evidence to support their claims. The Society of Motor Manufacturers and Traders (SMMT) recently reported that vehicle registrations in the United Kingdom fell by roughly 35 percent in September vs the same timeframe in 2020. This is relevant because the month typically represents the second-busiest period for the country and numbers were already low due to production stops created by coronavirus lockdowns.

Ninety years. That’s the amount of time that General Motors has led the sales charts in the U.S.

That may change this year, according to industry bible Automotive News, because of the ongoing microchip shortage.

Toyota was very focused on youthful consumer appeal at the turn of the millennium. Around the same time the WiLL sub-brand launched in the Japanese home market with its multitude of different products, a similar project was just getting underway at Toyota Motor Sales USA.

It was called Project Genesis, and like WiLL, it didn’t go well.

Several Japanese companies embarked on the WiLL sub-brand exercise at the dawn of the new millennium. Miscellaneous WiLL-branded products were introduced alongside a funky new car offering from Toyota, the WiLL Vi.

The baguette-themed retro sedan was an immediate failure amongst the youthful consumers WiLL was supposed to attract, so Toyota had a very quick rethink. Meet VS.

The WiLL project was a short-lived collaborative marketing effort by several Japanese brands, intended to capture the interest and money of youthful buyers. Using emotional engineering, seven companies launched new products in the early 2000s wearing WiLL sub-branding. Included in the myriad of offerings were three different subcompact Toyotas.

And here’s the first one, the WiLL Vi.

Today’s Abandoned History story is one of targeted marketing. In the early 2000s, an amalgam of Japanese corporations combined efforts to reach out to younger consumers via unified branding. Cars, food, appliances – all across Japan new, youth-focused products all wore the same sub-brand: WiLL.

Collectively WiLL asked, “How do you do, fellow kids?”

The WiLL branding project in early 2000s Japan was intended to excite and interest younger consumers with stylish products, all of which were marketed as WiLL. At the pinnacle of unique WiLL offerings were three different small Toyotas: The first two were the unpopular and unsuccessful retro-French themed Vi, and the modern-looking, popular, and unsuccessful VS.

Around the middle of VS production, Toyota just knew there had to be a part of the market they hadn’t reached yet and reintroduced the idea of the Vi with a polar opposite stylistic direction. This is the Cypha.

The chip shortage has struck again.

General Motors is going to temporarily halt production at most of its North American assembly plants, starting Monday, because the shortage of semiconductor chips continues.

The reviews are breaking today on the new Jeep Grand Wagoneer. As Jeep resurrects one of its most historical full-size nameplates from a three-decade slumber, it’s getting a lot of positive press coverage. But Jeep is in for a world of disappointment in a couple of years.

I’m back with more boring used car content, a topic some of you apparently despise with a passion. Caution: More used-car discussion ahead, get out while you still can if this is the case! For the rest of you, let’s review the impractical car suggestions you’ve made that earned a spot on the Yes, I Like list.

Car buyers and market observers are used to seeing large dealership markups on models that are tough to get — first editions of popular cars, usually, or models that are produced in small numbers, or both.

It’s no shock to see the Ford Bronco or Chevrolet Corvette marked up by thousands of dollars. Motor Trend reported markups of $30K on Broncos, for example. C8 Corvettes are also being marked up like crazy.

While annoying, it’s somewhat understandable, given how the franchise-dealer system works, as well as how basic capitalism and supply and demand work. You don’t have to like the phenomenon, but the logic behind its existence is sound.

Still, we draw the line at an almost $6K markup of a Mitsubishi Mirage.

Tim asked the other day if I might work up an opinion piece on the current state of Subaru. “Sure,” I said, and immediately felt salty. In mind were many criticisms on how the smallish automaker is doing things currently. After that initial salty reaction, I got to thinking about Subaru’s current offerings and recent trajectory more critically. And I realized they’re doing most everything just as they should.

Today’s article is a follow up to the one from about a week ago, wherein I outlined my current used car shopping idea: something fairly impractical with two doors. The article racked up 195 comments thus far, and I’ve read them all and taken notes.

Let’s get down to your suggestions. First up are the cars I won’t be considering.