By on April 8, 2019

U.S. light-vehicle dealers reported an operating loss for the first time since the National Automobile Dealers Association (NADA) began collecting data in 2009. While everyone continues reporting pretax net profits, concerns are beginning to swell around their dependency on factory incentives, which are not included in operating tabulations.

NADA’s analysis of 2019’s first-quarter auto sales shows that incentive spending is down compared to the same period a year ago. The group expects above-average discipline from automakers in terms of incentive spending throughout the year. According to J.D. Power, average incentive spending per unit was down $119 to $3,821 through March 2019 — with the brunt of that going toward trucks. However, if sales remain low, spending may creep back up to help clear out languishing inventories.  (Read More…)

By on November 12, 2018

nissan leaf charging electric car

Alternative fuel advocates often suggest that if society could simply get the lead out on solving the infrastructure problem, electric vehicle adoption would reach an all-time high. They’re most likely correct, too. With so much of the world set to gradually ban internal combustion vehicles, EV sales are almost assured to rise. But holdouts abound due to electric vehicles’ laundry list of shortcomings.

Electric cars are often more expensive than their combustion counterparts, offer diminished range, take longer to “refuel,” and are subjected to a charging network that’s less robust than than those associated with petroleum. If the industry is to solve those problems, it’s going to need a lot of money. Around $6 trillion should do the trick.  (Read More…)

By on September 6, 2018

Old Assembly Factory floor

For the past two years, we’ve reported that the post-recession upswing in new car buying in North America seems to have plateaued. Environmental factors have led to Millennials buying fewer cars than their parents’ generation, and wealthy folk have proven unable to pick up the slack — as no amount of money allows you to drive several cars at the same time.

Most major carmakers posted declining U.S. deliveries in July, and August’s data proved a mixed bag. However, America isn’t the only big market that’s taking a beating. The First World seems to have collectively surpassed peak growth and now has to ride out an extended period where volume dwindles until some other nation can afford to import container ships full of sparkly new automobiles. (Read More…)

By on August 27, 2018

There’s a growing assumption that automobiles have become so universally satisfactory, there’s nothing to gripe about anymore. We’re inclined to disagree. There will always be models that fail to meet our expectations and industry trends we’re not particularly fond of. However, we will happily acknowledge that low-tier automobiles have become decidedly less terrible when thrown together into a pool.

A weird side effect of this has been mainstream brands moving upmarket and offering a bevy of luxury options while extravagant nameplates do the inverse. For example, the Kia Cadenza can easily be outfitted to surpass the base Cadillac ATS in terms of luxury features and overall price. It doesn’t have the prestige, but you’re still buying a larger automobile with a focus on lavishness that can deliver on an exceptionally quiet and comfortable ride.

On the flip side of things, Cadillac is busy prepping its new small crossover for the general market. Priced for a mainstream budget, the XT4 should be a win for General Motors. But it further showcases the amount of overlap happening within the industry right now. Value manufacturers are becoming increasingly willing to move upmarket while luxury brands are trying to burn the money candle at both ends.  (Read More…)

By on July 2, 2018

Image: Honda
As the industry stresses about the new vehicle market taking it easy for the foreseeable future, there’s one aspect of it that’s of particular concern: car sales. After dominating the field for so long, passenger car sales fell below half of the market just a few years ago. That gap continued to widen through 2018.

Automakers responded by shifting output towards utility vehicles and crossovers. Ford ultimately decided to abandon the majority of its passenger cars in the United States as other manufacturers scramble to adjust their lineup to account for consumer tastes. However, these changes are also helping to push shoppers further away from cars. Bank of America Merrill Lynch estimates that 71 percent of vehicle introductions for the 2019 through 2022 model years will be light trucks.

Some automakers still believe cars hold an importance that’s not to be ignored. True, some models still sell incredibly well. But the general assumption is that they’ll continue losing relevance in the coming years. It’s likely to take another energy crisis or major shift in consumer preference to turn back the tide of crossover vehicles.  (Read More…)

By on May 8, 2018

Despite recent claims from Bosch that it’s prepared to save the diesel engine from becoming outlawed in Europe (which is like a prettier and less-free version of America), Nissan has announced its intent to withdraw sparkless motors from the market. Thanks to dwindling demand, the automaker claims it’s going to begin a gradual retreat until it no longer sells diesel vehicles in the region.

The announcement follows a similar plan unveiled by Toyota in March of this year and calls into question what the remaining Japanese manufacturers will decide in the months to come. Nissan said Monday that it will shift its focus to electrified vehicles, hoping the emerging technology can fill the void. But European manufacturers have the most to lose as the market changes.  (Read More…)

By on February 16, 2018

2018 GMC Yukon Denali Ultimate Black Edition

We did it! Thanks to the modern obsession with larger vehicles and opulence, domestic luxury brands are taking off like a rocket. It’s going so well, in fact, that American automakers are starting to steal market share from high-end import manufacturers. Of course, this is only applicable to SUV and crossover sales.

As you know, sedan sales are losing ground to their high-riding counterparts. While this hasn’t resulted in the obliteration of the passenger car market, despite claims to the contrary, those vehicles are being massacred by wayward consumers. Sedans are becoming passé and this has allowed sport utility and crossover vehicles to amass a significant portion of the pie.

Nowhere is this more apparent than in the luxury market. The rapid growth of the luxury truck segment has substantially increased the United States’ share of domestic models sold with an average transaction price of $60,000 or more. Apparently, the inarguably phenomenal Mercedes-Benz S-Class doesn’t have jack squat on the GMC Yukon Denali.

Suck it, cars.  (Read More…)

By on July 3, 2017

2017 Hyundai Tucson - Image: Hyundai

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.  (Read More…)

By on June 7, 2017

cars on a street, public domain

There has been plenty of doomsday prophecies surrounding the automotive industry in the last year, based largely upon the assumption that younger drivers are less willing to support it or simply cannot afford to. Stupid, right? Not really. While the direness of the situation is often exaggerated, plenty of evidence exists to underscore the impending troubles of the new car market. Whether it’s because those in their salad days don’t care as much about cars as their elders or simply have less disposable income (hint: it’s the second one), real change is coming for OEMs.

Younger shoppers are noticeably more likely to purchase used vehicles than their more venerable contemporaries are, but “young” is a relative term — especially in this instance. According to a recent study, 53.7 percent of prospective buyers under forty plan on getting a used car the next time they need wheels. For those over forty, that number is 49.7 percent. As you’d expect older people to buy more new cars, this much of a disparity at mid-life is significant.  (Read More…)

By on May 18, 2017

17FordEscape-Titanium_04_HR

Ford is admittedly behind its main rivals in terms of offering practical and purpose-built EVs but, when it finally comes to market in 2020, its first long-range electric should deliver what buyers want. When Ford announced its plans to launch an electrified crossover at January’s Consumer Electronics Show, the Chevrolet Bolt had already begun to lose its geek chic luster. However, we have to defer our judgement as Ford’s entry could eventually have an EV spec sheet that’ll make GM blush.

We’re beginning to get a better picture of the upcoming Ford — which I’m going to begin calling the E-CUV (electric crossover utility vehicle) since it doesn’t have an official name — now that the company’s chief technology officer Raj Nair has started loosening his lips. The upside is that it will be an affordable unit targeting everything the average consumer wants. The downside is that it’ll have competition early in its lifespan.  (Read More…)

By on April 13, 2017

dealership

Every industry analyst is beginning to sing the same tune. Despite things looking good now, the worm is about to turn. Global sales look poised to remain strong this year but the market has peaked and sales should persist on a graph as a flat line. Next year could be a different story, however, and there’s much apprehension surrounding lengthening loan terms and the upsurge of subprime lessees.

Rising incentives are also causing alarm; J.D. Power and Associates expects the average incentive per new unit to top $4,000 in 2017. While that tactic may get people into dealerships now, it might also harm long-term profitability as the automotive industry swings toward leaner times.   (Read More…)

By on November 12, 2009

Gratuitous Shanghai booth babe. Picture courtesy automk.com

“China is a global driver of growth in the automotive market,” said Friedrich Eichiner, CFO of the BMW Group. “China will play a major role in the global automotive business, in the development of future technologies.” Then he signed off on a major expansion project. Together with joint venture partner Brilliance, BMW will be able to produce 175,000 Made in China BMWs, up from 30,000 units currently.
(Read More…)

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