Kinda Sorta: New Car Market Shows Signs of Improvement

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.

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VW Plans Mass Culling of Combustion Cars, Loftier Margins

Practically every automaker on the planet has begun signaling a desire to change with the times by collectively revising their business strategies. The new hotness involves lower volumes, higher margins, and electric vehicles with the ability to push connected services allowing manufacturers to charge you piecemeal for just about every feature imaginable.

While Volkswagen Group has been at the forefront of those trends since the 2015 Dieselgate scandal helped force its hand, it often suggested that the shift to EVs would be a boon to low-income families. It was hardly the only automaker to make such promises, nor has it been the first to break them after deciding that perhaps there’s more money to be made with premium vehicles. VW has decided that its ideal strategy involves culling internal combustion vehicles by 60 percent over the next eight years and focusing on higher-margin products yielding superior profitability.

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Porsche Becoming Volume Brand

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.

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Industry Braces for Increased Volumes, Lower-Margin Vehicles

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.

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Lincoln Now Sells More Product in China Than U.S.

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.

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Toyota Is Now America's Best-Selling Automaker

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.

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Tesla Marks Milestone As Threats Gather

Some 12 years and one month ago, Tesla CEO Elon Musk delivered the firm’s first electric vehicle… to himself. Fast-forward to today, and electric vehicle are sprouting from automakers the world over — including the “legacy” automakers Teslaphiles so often deride as out of touch.

On Monday, the company that opened the floodgates for EV proliferation marked a production milestone once thought of as inconceivable: its millionth car.

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Tesla Flings Incentives, Builds Volunteer Army in End-of-Quarter Push

Tesla Motors is currently offering up a bevy of incentives, even a few it once discontinued, in order to maximize deliveries before the end of the quarter. The brand has also reached out to enthusiastic owners who may want to help during its time of need, creating a weird sort of volunteer army for itself.

The company is desperate to prove to investors that Model 3 volume is making meaningful headway before its next shareholders meeting. As you’ll recall, the Department of Justice opened a criminal investigation after the Securities and Exchange Commission began a civil probe into Elon Musk’s August tweet about possibly taking Tesla private. The automaker also fired more than 3,000 employes over the summer and lost several important executives. It’s been a rough year for the brand, which makes having a good quarter all the more important.

While a significant portion of that battle is being waged at the factory, helped by simplified paint options and new car carriers, Tesla thinks it can move enough extra metal at its delivery centers to make up some of the difference.

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Chasing the Dragon: Lincoln's Plan to Capture the Chinese Market

While both Buick and Cadillac have a healthy lead over Lincoln in terms of domestic deliveries, the space between them is far more pronounced in China. At home, Ford moved 111,159 examples of its premium marque in 2017 against Cadillac’s 156,440. However, China’s Caddy sales clocked in at 175,489 last year — a number Lincoln could only muse about in its wildest fantasies.

That’s because Ford exports all of its luxury vehicles to China, while GM tends to build them locally. But the Lincoln brand shows a lot of promise in Asia. Ford moved roughly 80,000 vehicles in the People’s Republic in 2017 and 54,124 of those models wore the Lincoln cross. In theory, if Ford could localize and bolster its product lineup within the country, a higher volume would be all but assured. It’s a theory the automaker intends to test, too.

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Lincoln Trimming Fleet Fat to Shore Up Residual Values

Lincoln is a brand that never fully recovered from the post-recession sales slump. While volume has improved over the last several years, 2017 actually saw a very slight decrease in overall deliveries. That’s a shame, as we’ve seen Lincoln making efforts to turn things around.

Sure, the domestic luxury brand could still stand to distance itself from mainstream Fords a bit more. But Lincoln has stopped attempting to sell Buick-grade luxury at Cadillac prices and seems intent on pursuing more elegant designs. Still, Ford Motor Co. CEO Jim Hackett wants the company’s operational fitness in top form as soon as possible, and getting Lincoln’s overall value up is an important part of that goal.

One way of doing this is by leaning on utility vehicles. Navigator sales have improved dramatically since the fourth-generation model hit dealers and the Aviator seems to hold real promise. But it’s not scheduled for sale until the 2020 model year, which means Lincoln has to do more than just wait around until new and updated SUVs can right the ship.

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Nissan's New Strategy: Build Brand Value, Not Fleet Sales or Incentives

Nissan has long-standing tradition in North America of being a bargain brand. While the automaker fields plenty of affordable options with a base MSRP undercutting that of its rivals, it has also leaned on aggressive incentivizing and heavy fleet sales. This helped Nissan chase volume in the U.S., but CEO Hiroto Saikawa is no longer convinced it’s a winning strategy.

He’s tasking Denis Le Vot, Nissan’s new North American boss, to improve profitability and brand value after the company’s operating profit dipped 50 percent in the region in the last quarter of 2017.

It’s a tall order for Le Vot, who has only had a little over one month to settle into being the regional chairman for the brand, and Saikawa is only giving him another two to figure out how to pull it off. However, he’s hinting at a strategy that eases off dealers, offers fewer market incentives, and ditches a reliance on fleet sales.

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Will Light Trucks Turn Around BMW's Sliding Sales?

Bavarian Motor Works has found itself in a situation familiar to most brands without a “full complement” of sport utility vehicles — slipping sales. BMW’s U.S. sales dipped 2.4 percent in 2017, and that was after a 9.5 percent drop in 2016. It cites an inability to supply the region with enough light trucks to meet demand as the primary reason for the sales slump and promises things will change for 2018.

The brand plans to launch the redesigned X4 compact crossover this year and hints that it might update the X5 too. Sales of the X2, which was present at the North American International Auto Show last week, should commence this March. On the other end of the size spectrum is BMW’s all-new X7 — which will become the automaker’s biggest model when it goes into production later this year.

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Tesla's Production Goals Are Starting to Look Unfeasible

We’ve debated Tesla Motors’ production ramp-up in the past, coming to the obvious conclusion that the automaker has a long road ahead of it before its proposed volume goals can be reached. The company knows this and Elon Musk has repeatedly said scaling up Tesla’s vehicle assembly will be akin to a kind of “production hell.”

However, we haven’t done a comparative analysis to extrapolate just how ambitious Tesla’s targets truly are. Half a million vehicles by next year is a lot of annual production for any fledgling automaker. We assumed the company would do its best and we’d see how close it came to the bar at a later date. But, with the Model 3 production getting off to an incredibly slow start, it’s worth looking at how far Tesla’s factory in Fremont, California, will have to climb to achieve the desired numbers.

It isn’t looking particularly good in the short term.

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Rolls-Royce Boosts Volume and Narrows Sales Gap With Rival Toyota

Rolls-Royce Motor Cars Limited is on track to become the highest volume automaker in the world someday. Management is keeping it under wraps but volume has been exploding over the last few years. For 2014, the brand delivered a record 4,063 cars, up 12 percent on its volume for 2013 — closing the gap with Toyota’s 10.23 million global sales.

Unfortunately, Rolls’ five year volume streak didn’t last but it is creeping back up after some minor setbacks. For 2016, the brand announced its second highest ever annual sales result in the marquee’s 113-year history, up 6 percent on its 2015 results, for a total of 4,011 global sales. While it looks like the premium automaker has — once again — placed Toyota’s volume back in its sights, Rolls-Royce doesn’t want to get too cocky and has implemented a strategy that should keep the customers pouring in.

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North American Dealers Annoyed by Hyundai's Lousy Volume Strategy

Since 2009, Hyundai’s North American volume has seen record sales every single year. While the last few annual assessments haven’t resulted in the same volume boom as the immediate post-recession years, the company hasn’t seen any shrinkage — despite below-average incentive spending and a lineup that doesn’t exactly sync with the region’s evolving automotive tastes. Hyundai dealers are probably singing the brand’s praises and getting its logo tattooed on their staff then, right?

Not quite. While Hyundai has achieved nearly a decade of growth in the Wild West, dealers are growing increasingly disappointed with its tactics and are less than enthused about future business prospects — especially as it doesn’t appear Hyundai has any interest in scaling back car volume for the sake of SUV sales.

In fact, while both the Hyundai Elantra and Sonata remain higher-volume models, both have undergone a noticeable delivery decrease since 2012. Meanwhile, sales of utility vehicles like the Santa Fe and Tucson have nearly doubled in the same timeframe. Hyundai put 62,817 Tucson SUVs onto North American roads in 2012, and that figure rose to 113,502 last year. It could have been more, had the company been better at supplying those vehicles.

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  • Conundrum Was unlucky enough to have a ride in the back of one of these things shortly after they first appeared, a project of Mercedes' ownership of Chrysler and that silly German professor with the gigantico walrus mustache who ran the place.Brother rented one of these early Magnums. The ride in the back was of constant wallowing up and down, like a 2015 BMW 3 Series, where my senses were similarly assaulted by lack of attenion to rear ride comfort, Up front was OK in both, back seat ride bloody awful. Must be a Germanic trait.The Magnum had an additional sensory deficit. Interior smelled of the peculiar rubber/plastic dash. Smelled like Chinese winter boots for kids, or Chinese tires of yore. Pass.
  • Anonymous My dad drove an 84 LTD. He always bragged about how special it was. Interesting to see that again.
  • Conundrum Here's how much Ford had to do design-wise with that engine in the article's lead picture.Zero. It was a Cosworth when Cosworth was still original Cosworth, over 30 years ago. The engine shown is a development of the original DFV. Ford paid to have its name on the cam covers for decades.I wonder who Ford will get to design this proposed new F1 engine for 2026. Because sure as hell, they don't have the in-house talent to do it themselves.
  • Sayahh Story idea or car design competition: design a compact sedan, a midsize sedan, coupe and/or wagon specifically for people 6'4" through 7'2". Not an SUV nor a crossover nor a raised chassis like the US Toyota Crown or Subaru Outback.
  • Sayahh I only check map app only when absolutely necessary and only at a red light. An observation: lots of ppl leave 2 car lengths (or more) between themselves and the car ahead of theirs so that they can text or check the internet (because they are afraid they might roll forward and hit the car in front of them?) This drives me crazy because many ppl do it and 3 cars will take up almost 7 car lengths and ppl cannot get into the left turn lane when it's bordered by a cement "curb." Worse is when they aren't even using their phone and have both hands on the stewring wheel and waiting for the green light. Half a car length is enough, people. Even one car length is too much, but 3 or 4 car lengths? At 40 MPH, maybe, not at 0 MPH please.