By on July 7, 2020

Volkswagen Group appears to have completed the terms laid out by the U.S. Department of Justice after it decided the automaker required some oversight in the wake of the 2015 emissions fiasco (colloquially known as Dieselgate). VW was found guilty of equipping certain models with emissions-cheating software that would allow the car to run cleaner under testing conditions (passing regulations) and dirtier, with better performance, the rest of the time.

The con was brilliant and allowed VW to fool regulators for years until it all blew up in its face. Getting caught in the United States kicked off a chain reaction that cost the automaker a fortune globally. In May, VW estimated it had spent €31.3 billion ($34.40 billion USD) in fines and settlements and fines globally — adding that it expects to bleed another €4.1 billion through 2021. But the company was certainly happy to announce on Monday that it had adhered to settlement deal it reached with the Department of Justice and California’s Attorney General.  (Read More…)

By on July 2, 2020

honda

In what might be the most blindingly obvious statement ever to be made in this august publication, the second quarter of 2020 was an absolute disaster for vehicle sales. Under the withering gaze of a global pandemic, the nation’s car dealers were awash in red ink — and the bitter tears of various dealer principals.

Demand and supply have cratered, producing a bewildering simultaneous mix of good deals in some segments as stores try to keep the lights on while shortages of a few key models hold the pricing line on others. Pile on the vanishing rental market you have an automotive industry the likes of which few have ever seen.

(Read More…)

By on June 1, 2020

Over the past decade, regular reports that Chinese automakers were readying a major push into the North American market became commonplace. We started seeing them move out of trade show basements to take up some of the most desirable real estate on the main floor. While some of the product clearly wasn’t yet up to snuff, one could imagine budget-focused products flooding the U.S. and Canada after a few years of polish. However, the last time that seemed like a likely scenario was 2018.

Chinese brands are still trying to break into the untapped North American market; some even have physical office space set up within the United States. However, Sino-American relations have soured dramatically over the past few years, and new financial hurdles have made wrangling a new market extremely difficult.  (Read More…)

By on June 1, 2020

Mexico is attempting to accelerate parts production to ensure North American automakers have enough components on hand to stay operational. The response to the pandemic saw manufacturing stalled worldwide as governments assessed whether or not we’d soon be living through a plague of biblical proportions. While fate decreed a repeat of the Black Death would not be necessary, untold damage resulted in numerous business sectors.

The automotive industry hardly went unscathed. Lockdowns stopped sales in many markets for months and plunged supply chains into turmoil as OEMs shut down to ensure staff were helping to “flatten the curve.” With the public’s interest shifting rapidly away from coronavirus mandates toward demonstrations about police brutality and racial justice, or simply devolving into riots because people are pretty angry about how poorly 2020 is playing out, suppliers and automakers are gradually moving back to more normal production schedules.

This has been easier said than done. But it is being done, and that’s the important thing.  (Read More…)

By on May 13, 2020

Mexico is considering reopening factories after May 18th, now that automakers and the U.S. government have requested it resume production at plants serving the American market. With supply chains needing time to catch up, vehicle assembly will be precarious until parts can be reliably sourced. And Mexico is an essential part of that industrial recovery plan, necessitating some light coordination with the United States.

Despite seeing a spike in new COVID infections, Mexico released a plan to ease restrictions on Wednesday. Making sure U.S. manufacturers have what they need has been incorporated into that strategy, with a few conditions. While industrial employees will soon head back to work, Mexico made no assurances that it will prioritize supplying the rest of North America with automobiles or their components.  (Read More…)

By on February 21, 2020

The annual Automotive Franchise Activity Report asserts that the number of new-car dealerships in the United States has shrunk for the first time since 2013. The difference is marginal when viewed from a national perspective, but could support prior theories that larger dealer networks are consolidating while smaller, less competitive shops are being forced out of the market. The report claims the total number of storefronts fell from 18,294 in 2018 to 18,195 at the start of 2020. Dealership throughput was similarly down, decreasing by eight units from 2018 to 940.

While not particularly alarming, the figures do seem to mirror national population trends when placed under a microscope. The states that lost the highest number of showrooms  tended to be regions that had the most trouble preventing people from moving.  (Read More…)

By on January 22, 2020

On Wednesday, President Donald Trump threatened to impose fresh tariffs on European automotive imports if the region can’t work out a trade deal with the United States. The good news is that the U.S. is already in the opening stages of negotiation with the United Kingdom, which is due to leave the EU at the end of January. British Prime Minister Boris Johnson has even said a key benefit of Brexit is the ability to negotiate with countries like the U.S. independently.

Unfortunately, the rest of Europe doesn’t seem as eager to do business — encouraging Trump to fall back to tariff threats. But there’s clearly a retaliatory angle here. In 2018, the EU threatened punitive tariffs on traditionally American items like whiskey and motorcycles as a response to Trump’s intent to impose tariffs on steel and aluminum. He’s targeting French goods this time, mentioning 100-percent fees on imported luxury goods from France (champagne, handbags, etc.), additional levies on digital services, and a 25 percent duty on European cars.  (Read More…)

By on December 6, 2019

If you follow the automotive industry at all, you’re undoubtedly aware that the United States is a region that hasn’t quite embraced automotive electrification on the same level as the rest of the developed world. Americans travel longer distances and have particular tastes, making EVs more popular in places like Europe and China. It also hasn’t passed the same sweeping regulations to ensure their advancement.

Whatever the cause, a new survey from London-based OC&C Strategy Consultants attempted to tabulate the disparity — asking 2,000 consumers (apiece) in the U.S., China, Germany, France and United Kingdom between March and April of 2019.

Their findings? Only about half of the surveyed Americans felt EVs were worth their consideration as a potential successor to their current ride. In China, 90 percent said they would seriously consider buying electric. Between 64 and 77 percent of respondents in Europe said the same (depending on country).  (Read More…)

By on November 27, 2019

While the automotive industry continues cleaning itself up via electrification and moral corporate messaging, most aspects of doing business have remained decently dirty. For all this striving for a utopian society, businesses still don’t like losing money and will go to great lengths to screw over the competition.

South Korean battery suppliers SK Innovation and LG Chem are currently clawing at each other like a couple of mad tigers. SK managed to secure a contract to supply Volkswagen Group with EV batteries, leading to the construction of a $1.7 billion factory in Georgia. LG did not, leading to a lawsuit. Both automakers and analysts are worried the litigation is spinning out of control, and could effectively obliterate their ability to do business in the United States. (Read More…)

By on November 1, 2019

One of the issues underpinning the gas war has been an inability for either side to compromise. Initially, it was the current administration complaining about California wanting special treatment. But the coastal state was quick to return fire, claiming that the White House never offered a valid compromise.

Eventually California extended an olive branch by suggesting it would postpone existing fuel economy mandates by one year, while attempting to lock automakers in via written commitments. But federal regulators said a singular national standard was needed, suggesting California had overstepped its authority by trying to rope in manufacturers.

However, EPA Administrator Andrew Wheeler came back this fall with claims of a revised plan that could actually be more stringent than originally presumed. While still a rollback, the new draft was said to close several loopholes the industry could use to continue their polluting ways. “In some of the out years, we’re actually more restrictive on CO2 emissions than the Obama proposal was,” Wheeler said.

New reports now suggest the EPA’s words are more than just noise. (Read More…)

By on October 31, 2019

Fiat Chrysler Automobiles and Groupe PSA both confirmed their intention to merge on Thursday, verifying reports that the pair were in the final stages of approving the deal. The arrangement will be a 50-50 share swap, with the new company’s shares listed on the New York, Paris and Milan stock exchanges.

The duo hope to finalize a deal in the coming weeks to create a group with 8.7 million in annual vehicle sales. That would make it the fourth-largest automaker in the world — behind Volkswagen, Toyota and the Renault-Nissan-Mitsubishi alliance.

“There is still plenty of work to do before we reach a formal agreement, but what’s clear is that the opportunity that represents for both companies is very compelling,” FCA head Mike Manley told Reuters. It would appear the arrangement is getting plenty of support. French and Italian leadership have both endorsed the move, provided there are no significant job losses in either country.  (Read More…)

By on October 30, 2019

The Trump administration has reportedly expressed an interest in deciding where and how automotive manufacturers do their business if they want to secure duty-free deals under the United States–Mexico–Canada Agreement (USMCA) that’s positioned to replace NAFTA. According to Bloomberg, there’s currently a discussion taking place between administration officials, congressional staff, and domestic and foreign automakers regarding the context of the legislation that lawmakers will ultimately have to vote on. The White House is said to want highly specific language that would allow it to select production rules unilaterally.

Considering how messy things have gotten with China, it could be useful to have extremely clear trade language and some direct oversight of businesses with global interests. But critics are worried the strategy could bring U.S. trade policy closer to the rigid policies already in place in the People’s Republic — a country America has attempted to distance itself from due to its ludicrous levels of government intervention.

The real fear is that the government could use this to give one manufacturer better treatment than another — cutting it a sweet deal for building in a politically advantageous area, for example. While plausible, we can’t confirm something that’s largely speculative.  (Read More…)

By on October 29, 2019

Ford Motor Co, Honda Motor Co, BMW Group and Volkswagen AG announced a voluntary deal with California in July — drawing a line in the sand for who they’ll be supporting in the fueling fracas taking place between the Golden State and White House. Meanwhile, the Trump administration’s rollback proposal — which intends on freezing automotive emission standards at 2020 levels through 2026 — saw no such support. But the cavalry seems to have finally arrived after sitting on the sidelines during the battle’s opening maneuvers.

General Motors, Fiat Chrysler Automobiles, Toyota, Mazda, Nissan, Kia, and Subaru all sided against California in a filing with a U.S. appeals court from Monday night. While they’re not setting any economy targets, they are collectively firm on the issue of the state’s ability to self regulate. A large portion of the industry wants a single national standard, not individual states setting their own benchmarks while they attempt to catch up with product.  (Read More…)

By on October 25, 2019

On Thursday, Senator Chuck Schumer (D-NY) proposed a $454 billion plan aimed at converting the United States from a gasoline-powered nation to one driven primarily by electricity. Under the 10-year plan, automotive consumers would get rebates ranging from $3,000 to over $5,000 (based on efficiency), plus another $2,000 for low-income buyers, for the purchase of electric vehicles made in America.

“This proposal to bring clean cars to all of America will be a key component of the far-reaching climate legislation from Senate Democrats, and I’m proud it has a broad coalition of support,” the senior senator said in a statement.

Much like the haphazard way Schumer insists on wearing glasses at the outermost tip of his nose, begging for gravity to take them, his plan has us mildly concerned.  (Read More…)

By on October 8, 2019

The United States and Japan have signed a limited trade deal that’s been simmering for some months now. President Donald Trump has been eager to secure a place where American farmers can send their goods now that the trade war with China has diminished American dealings with that market. In return, Japan wanted assurances from the U.S. that it will not impose any new automotive tariffs, as cars remain one of its chief exports.

While the island nation didn’t get the guarantee in writing, Prime Minister Shinzo Abe claims he received a verbal promise. This is to be the first part of a broader trade deal between the two countries.  (Read More…)

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