#IndustryTrends

A little over a decade ago, it seemed like everyone I knew was abandoning cable packages for online streaming services. They were cheaper, on-demand, and offered more choices with fewer advertisements. But as the years progressed, companies stopped selling their media to a handful of online video platforms and started building their own. Programming became more transient and isolated, forcing consumers to buy into additional subscription services. We’ve since hit a point where the overall consumer experience has diminished and grown more expensive, despite the steady influx of competition.

While automakers have been dabbling with subscription services of their own, their earliest attempts turned out to be such overwhelmingly bad deals that the public refused to play along. But they’re not giving up that easily. Industry players have been trying to figure out ways to charge customers indefinitely for years and are starting to settle upon subscription packages that can unlock hardware that’s already been installed into the vehicle or add software that can be downloaded via over-the-air (OTA) updates. Love or hate it, vehicular connectivity has opened up the door for new sources of revenue and businesses everywhere are eager to take advantage — with most companies projecting exceptionally healthy profits for the years ahead.

Unvaccinated workers from General Motors’ CAMI Assembly Plant have been removed from the facility and forced into unpaid leave. The automaker had a deadline set for December 12th to have all employees vaccinated, with Unifor previously having urged the company to postpone the date. The Western world has seen a surge of citizens protesting vaccine mandates this year, with Canadian unions conducting more than a few of their own. Though several organizers have said they’re operating independently due to a shared belief that Unifor was offering insufficient support to members and was effectively siding with automakers.

When people started burning down 5G towers in fear, the practice seemed a little misguided. But if you happen to be the owner of a connected automobile, there’s a chance you’ll be wishing enough of them had been taken down to delay those low-latency spires from becoming the default broadcasting network.

While you were probably aware that 3G cellular networks will be shut down in the U.S. next year so the telecom industry can focus in on 5G, you may not have been hip to the fact that this could totally nullify the connected features inside of your car. Unfortunately, loads of automobiles manufactured the early days of phone pairing and internet integration won’t be able to make the journey into 5G like the new phone or tablet you purchased. Worse yet, there are even some modern vehicles that are about to become a lot less feature rich with companies that have no intention of offering updates.

When the pandemic convinced practically every industry to press pause in 2020, supply chains became so crippled that just getting sectors of commerce rebooted became a challenge in itself. It was the business equivalent of a twenty-car pileup, with the automotive industry being hit particularly hard due to the complexity of its own supply lines. While the following year represented an improvement, production failed to stabilize to pre-pandemic levels.

The solution for automakers and dealerships was to begin demanding more money for cars. With vehicles in short supply, the value of new and used models blew through the roof. This move kept automakers largely in the black for 2021, despite a general inability (or unwillingness) to manufacture products at the normal pace. However, it didn’t help suppliers, who are haven’t been able to tack on the same premiums to individual components while still having to cope with rising economic hurdles.

Stellantis CEO Carlos Tavares has said that the growing pressures being placed on automakers to shift toward electric-vehicle production are unsustainable and run the risk of the public getting subpar products at decidedly higher price tags. While we’ve seen automotive executives lambast new energy vehicles before, it’s grown rarer as governments around the world have continued incentivizing their existence and investors have been pouring money on startups delivering literally nothing more than the mere suggestion of more electrification.

Tavares’s words come from the Reuters Next conference, running counter to the event’s prevailing narrative of encouraging technological progress and social change. Attendees tend to be political officials, heads of finance, NGO leaders, and business executives sympathetic to the cause. But the Stellantis CEO definitely went off-script when he listed some of the shortcomings of electrification, adding that he felt the costs were “beyond the limits” of what was realistically feasible. It’s his belief that pursuing electrification at the current pace doesn’t take into account the larger financial picture.

Subaru of America will be canceling Starlink telematics subscriptions on all new 2022 vehicles sold in Massachusetts thanks to the state having an amended right-to-repair law that’s wildly unpopular with global automakers. If you’ve been following our coverage, Massachusetts has become ground zero for consumer advocacy groups, independent repair shops, and car buyers that have grown concerned with the industry’s increased interest in data hoarding.

The argument is that the automakers are now building vehicles that violate customer privacy — by wirelessly transmitting information back to manufacturer data farms — while also setting them up to make independent repairs nearly impossible. This resulted in an extended legal battle where the Alliance for Automotive Innovation (AAI) went to bat to ensure the industry retained this lucrative venture. But it was stymied by the grassroots campaign launched against it. Massachusetts’ updated law currently requires all vehicles sold within the state (from the 2022 model year onward) using telematics systems to be equipped with a standardized, open-access data platform that would allow customers and unaffiliated mechanics to gain access.

Now that fuel prices are popping off and it’s becoming glaringly obvious that we’re falling into another recession, one would hope that automakers would be prioritizing their more economical models. Unfortunately, most manufacturers operating in North America spent the last decade culling the smallest models from their lineup. Domestic brands took the practice so far that several no longer offer traditional cars, opting instead for compact crossover vehicles yielding higher price tags and broader profit margins. Foreign brands were only marginally more reserved with the ax.

This has helped move the average vehicle transaction price beyond $42,000 in the United States, according to Edmunds, with used rates sitting somewhere around $28,000. Though the cause isn’t entirely down to there being a complete lack of econoboxes on the market. Increased regulations and the industry’s newfound obsession with connectivity/tech have also increased pricing. But it doesn’t change the fact that we’re now confronting a situation where almost nobody is selling the kind of small, affordable vehicles that cater to shoppers needing to be thrifty right when they really need them.

Consumer Reports just released the findings of a year-long stud y looking into the latest trends in automotive loans and car payments. The resulting information highlights just how explosive the debt growth has been over the last 10 years and the arbitrary way in which borrowers are now being treated.

Long story short, we’re all being swindled.

With vehicle prices ballooning and the associated loans becoming longer than ever, dealers and lenders seem to be operating whatever way yields the steepest profit margins with only a modicum of consideration being given to the established frameworks designed to act as a guard rail. This has led to U.S. citizens carrying around a record $1.37 trillion in automotive load debt and customers with good credit being treated no different than those that fall into the subprime category. Sadly, the issue appears only appears to be worsening as new economic perils are only making things more expensive. Meanwhile, data from the Federal Reserve Bank of New York is projecting national auto debt to swell to $1.42 trillion by year’s end.

A new study from the American Automobile Association (AAA) has found that rain can severely impair advanced driver-assistance systems (ADAS). Similar to how highway traffic slows to a crawl when there’s a sudden deluge, modern safety equipment can have real trouble performing when a drizzle becomes a downpour.

On Thursday, the motor club organization released findings from closed-course testing that appeared to indicate some assistance suites had real trouble seeing through bad weather. AAA reported that 33 percent of test vehicles equipped with automatic emergency braking traveling collided with a stopped car when exposed to simulated rainfall at 35 mph. The numbers for automatic lane-keeping was worse, with 69 percent drifting outside the lines. Considering the number of times the people writing for this website have anecdotally criticized ADAS for misbehaving in snow, sleet, rain, fog, or just from an automobile being a little too dirty, it’s hard not to feel a little vindicated.

Like the rest of the world, the automotive industry is currently living in two distinct realities. Labor unions and part suppliers have been sounding the alarm that electric vehicles will require far fewer hands to manufacture and will ultimately lead to their demise. But battery firms, establishment politicians, and most automakers have claimed that transitioning to EVs is entirely necessary and will result in there being a surge of high-paying jobs to replace those lost.

Then there are claims you can’t quite wrap your head around, like the one Volkswagen CEO Herbert Diess reportedly made to the supervisory board in September. The Diess Man asserted that VW would lose 30,000 jobs if it transitioned too slowly to electrics, framing the situation around Tesla arriving in Germany and fresh competition from Chinese manufacturers. While it’s certainly possible that VW could take a hit as its rivals move on Europe, the premise that it’s going to cost the business jobs is sort of bewildering when just about every analyst agrees that electrification will result in a leaner workforce across the board.

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.

There’s a new automotive trend afoot, one where industry giants alter their iconic corporate logos so they’ll play better in a digital environment. Shadows and color gradients designed to give an image depth don’t always pop on a cheap screen the way they might on the glossy piece of paper and have encouraged manufacturers to transmission to flat, monochromatic icons that look bad everywhere.

But consistency isn’t the only reason to change logos. It’s also an opportunity to signal to customers that you’re evolving as a brand, which is why so many companies have associated their new iconography with the pivot toward electric vehicles. General Motors, recently ditched the logo it’s been using (more or less) unchanged since 1964 for a Bizarro World alternative that swaps the color pallet and makes the letters lowercase. Now it’s modernizing the emblem to be used for Cadillac’s electrified products until they gradually supplant the entire lineup.

General Motors now requires salaried employees operating in the United States to disclose their coronavirus vaccination status. As confirmed by the automaker on Thursday, the decision is supposed to help the company determine what percentage of its own workforce is vaccinated so it can make better decisions about which safety protocols to implement. But your author is under the assumption that “as many as possible” will always be the preferred answer.

Earlier in the month, GM forced all salaried employees to disclose whether or not they were immunized for COVID-19 using the automaker’s internal network. Those answering to the affirmative were required to submit proof of vaccination by last Monday. But it sounds as though the manufacturer is just getting warmed up for more invasive activities.

On Wednesday, Ford Motor Co. told employees that it would delay plans for on-site work due to coronavirus concerns relating to the delta variant. Non-site-dependent staff are being told they stay home for the rest of 2021, while line workers will still be required to come in so long as there’s a job to be done — creating a dichotomy between white and blue-collar workers.

While Ford has encouraged some teams to come back to the office for various projects, it has repeatedly delayed its return-to-work timeline. Workers now being told to stay home until 2022 were previously informed they’d be coming back to the office in October. Before that, everyone thought it would be business as usual by the summer. Now the company is adopting a policy that has most people staying home even after 2022 as often as possible while it considers mandating vaccines.

Audi is discontinuing the A1, citing Europe’s regulatory landscape as the main cause. Eager to limit the amount of CO2 coming out of tailpipes, the European Union has placed strict limits on petroleum-powered passenger vehicles. For Audi, the price of manufacturing a subcompact automobile-dependent upon internal combustion is getting too high. Installing a smaller motor would negatively impact drivability while slotting in a hybrid powertrain means more R&D costs and jacking up the MSRP to a point where consumers might lose interest.

There’s just not much incentive to build small, efficient vehicles when the profit margins have been made razor thin and people aren’t buying them in great numbers. And this is a lesson that’s being learned by all automakers, not just those associated to Volkswagen Group.