Americans continue to buy vehicles nearly as fast as they arrive on dealer lots, as the nation is rife with stories chronicling perpetually empty lots and some establishments making bank with obscene markups.
We’ll leave those latter two topics for another day. Meanwhile, despite a consumer hunger for new cars, the market is down sharply compared to this time last year – double-digit percentages, in fact.
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. (Read More…)
While the semiconductor shortage was long considered the excuse par excellence for why the automotive sector couldn’t produce enough vehicles during the pandemic, some manufacturers have begun pivoting to blaming supply chains that have been stymied by Chinese lockdowns. Toyota is probably the best-known example. But the matter is hardly limited to a singular automaker and market analysts have already been sounding the alarm bell that strict COVID-19 restrictions in Asia will effectively guarantee prolonged industrial hardship around the globe.
Back in April, Shenzhen was emerging from a month-long lockdown. However, the resulting downtime severely diminished the tech hub’s output which exacerbated global component shortages. While Chinese state-run media claimed regional factories maintained full-scale production during the period, the reality was quite a bit different. Meanwhile, Shanghai has remained under harsh restrictions since March and more look to be on the horizon. As an important industrial center and the world’s busiest port by far, the situation has created an intense backlog of container ships that are presumed to create some of the sustained problems that we’re about to explore. (Read More…)
Volkswagen CEO Herbert Diess has explained that the automaker would very much like to get back in to the United States’ good graces now that it has cut ties with Russia. With the future of Europe looking shaky, VW is hoping to maintain its position as the best-selling brand in China and start making inroads in America after burning a few bridges there.
Despite the Dieselgate scandal being seven years in the rearview mirror, the automaker is still coping with the resulting financial penalties and the resulting decision to scale back its U.S. aspirations a tad until its electric models hit the road. But the company has always had an issue understanding what American drivers wanted, resulting in boom and bust phases for the company until it manages to solve the puzzle. The most common issue was an inability to adhere to ever-changing emissions standards. But there are also periods where the manufacturer was snubbed for offering subpar electrical equipment or simply having a lineup that was out of sync with American tastes. But Volkswagen has historically enjoyed a resurgence after making the necessary changes and Diess is hoping for another comeback. (Read More…)
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. (Read More…)
Delivery numbers for the first quarter of 2022 may be down compared to this same time last year, but don’t construe that as a lack of customer interest. Supply and demand are out of sync for many manufacturers right now, leading to a situation in which there seems to be no shortage of buyers but a dearth of inventory to satiate their requests.
When Mazda announced it would be discontinuing the midsize Mazda6 sedan for the U.S. market, some were crestfallen. With the industry having spent the better part of a decade moving away from the body style to support models they could associate with higher price tags, there’s been a deficit of good sedans of late. But a seed of hope was left intact when the company announced it would be pulling the Mazda 6 from our market.
You see, the company had long been teasing a rear-drive variant utilizing a powerful inline-six motor. Mazda was also going upmarket, indicating the possibility of the model returning to do battle with midsized German products with a higher price tag. But it’s looking like the concept is going into the trash bin along with Mazda’s suggestion of bringing back RX performance vehicles and creating rotary range extenders for EVs. (Read More…)
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. (Read More…)
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. (Read More…)
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. (Read More…)
Toyota Motor Corp. looks to be the next automaker that will have exhausted its allotment of EV tax credits for the U.S. market.
While the quota for $7,500 rebates has already been reached by Tesla and General Motors, Toyota is closing in with 190,000 plug-in sales of its own. The government has limited federally backed incentives to just 200,000 vehicles per manufacturer. Once the Japanese manufacturer reaches that limit, credits go into a cool-down period where it can continue benefiting from the full sum six months after the relevant quarter ends. From there, incentives will be halved for the next two quarters until the company is no longer eligible. (Read More…)
To say that headline is an understatement is akin to saying Vesuvius barely covered Pompeii. The last calendar year saw plenty of struggles for those trying to move metal, many of which resulted in empty dealer lots bereft of product to actually sell. A colleague in the industry told this author he had an up who strolled into his showroom loudly declaring “I’m looking for a ’22 Suburban,” to which my friend replied “Me too, buddy.”
Yeah, it was that kind of year.
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. (Read More…)
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. (Read More…)
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. (Read More…)
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