Tag Archives: Sales

New Car Sales Down But Prices, Profits Up in December

December sales are expected to be lower according to forecasts.

Depressed December new-vehicle sales may have automakers facing a blue Christmas, but retailers are seeing record high transaction prices.

That’s the takeaway from two new reports from J.D. Power and TrueCar. And unlike previous years, don’t expect a big sales blowout to clear the lots.

“Historically, December is a big month for the industry as OEMs and dealerships work to close out the calendar year with strong sales. The last week of the month is also typically the biggest week of the year in terms of sales volumes but it’s unlikely to happen this year due to continued inventory shortages and declining incentives,” said Nick Woolard, lead industry analyst at TrueCar.

December retail sales decline from 2020

A joint forecast from J.D. Power and LMC Automotive forecasts new vehicle retail sales this of 1,105,800 units this month. That’s a 17.4% decrease compared with December 2020, when adjusted for selling days. (This year has one fewer sales day than last year.) Without the adjustment, year-over-year sales dropped 20.4% in 2020.

Similarly, TrueCar predicts U.S. retail deliveries of new cars and light trucks to be 1,024,263 units, down 27% from a year ago and on par with November 2021.

That number excludes fleet sales. Fleet sales are even more depressed, according to TrueCar. The expectation for December 2021 is a 29% decrease in sales from a year ago and decline of 3% from November 2021 when adjusted for the same number of selling days.

Vehicles continue to be in short supply, with nearly 57% of vehicles selling within 10 days of arriving at a dealership. That’s a record, according to J.D. Power, which notes that vehicles remain on dealer lots for a mere 17 days, a record low, and down from 49 days a year ago. TrueCar pegs that number at 18 days, up from previous months, but still near historic lows.

The average new vehicle transaction price is expected to reach $45,743 this month.

Short supply fueling higher prices

The short supply of new vehicles is leading to higher average transaction prices.

“While the inventory situation has improved modestly since November, supply remains well below the level at which consumer demand for new vehicles can be met. Intense demand with this limited supply is resulting in prices continuing to increase,” said Thomas King, president of the data and analytics at J.D. Power.

King notes average transaction prices are expected to reach a record $45,743 this month, 20% higher than December 2020 and the first time that number has passed $45,000.

The higher prices are the result of reduced incentive spending by OEMs, with the average manufacturer incentive per vehicle totaling $1,598, a decrease of $2,291 from a year ago. That’s 3.5% of the average vehicle MSRP, down from almost 5.5% a year ago, according to King.

Automakers have drastically cut incentive spending, leading to higher prices.

TrueCar’s forecast a similar story, with automaker incentive spending down 55%. This is leading to an average transaction price projected to increase 7.5% from December 2020 and rise 2.5% from November 2021.

Incentive spending is tumbling, according to TrueCar. Year over year, General Motors cut its incentive spending 64.7%, the most of any automaker. Nissan cut its spending 57%, Hyundai 54%, Toyota 53.5%, Volkswagen Group 51.35%, BMW 47.3%, Stellantis 46.5%, Ford 41.8%, Kia 41.6%, Honda 40.9%, Daimler 37% and Subaru 31.9 percent. Subaru was lowest by dollar amount of the OEMs examined at $1,006. Daimler was the highest at $2,738.

Who’s benefitting most? Retailers

But retailers are benefitting from current market conditions. Although volume is lower, Dealers’ profit per unit — inclusive of grosses and finance & insurance income — is forecast to hit a record $5,258, up from $3,277 from a year ago. This has led to record dealer profits, which are projected to be up 254% from December 2019, reaching an industry aggregate revenue of $5.8 billion — an industry record.

The higher prices are leading to record retailer profits.

And the strong vehicle demand for new vehicles is fueling record used vehicle prices, which is giving buyers more equity on their trade-ins, with the average trade-in equity for December expected to reach $10,199, up from $4,623 from a year ago, and an 83% increase. That increased equity helps make pricier vehicles more affordable, as has a decrease in the average interest rate in December. It’s expected to decline nine basis points to 4.05 percent.

But increased equity and lower interest rates hasn’t helped fitting a car payment into the family budget. The average new vehicle payment is expected to reach $680, up $78 from December 2020, and a record high, according to Power. TrueCar paints a similar picture, with the average interest rate on new vehicles is 4.3% and the average interest rate on used vehicles is 7.5%. The average loan term for both new and used vehicles is 70 months.

2022 should be better than 2021

When it comes time total calendar year sales, expectations are for an improvement from 2020.

Supply should improve next year, but will remain near record lows.

“Full year 2021 will still show a solid sales increase from 2020. The year-over-year sales declines experienced every month in the second half of 2021 were not enough to wash the record sales pace in the first half of the year,” King said.

But it should improve during the next 12 months.

“Indications are that shipments will rise incrementally as the year goes on, allowing sales to rise from 2021 levels. However, pent-up consumer demand will keep inventory levels near historical lows,” King said.

TrueCar also sees inventories improving, but incrementally.

“We continue to see signals of stability and in some cases, slight improvement. One such indicator, our scarcity measure, shows improvement in recent months for both new and used vehicles,” said Valeri Tompkins, senior vice president of OEM Solutions at TrueCar. “However, questions still remain as to the trajectory of improvement we can expect to see in 2022.”

First Look: 2022 Rolls Royce Ghost Black Badge

Who would have thought you could make the Rolls-Royce Ghost look so sinister?

Rolls-Royce revealed a new addition to the Rolls-Royce Ghost line-up in Miami Thursday — the Black Badge — during a North America dealer meeting that saw about 100 retailers meet with the automaker’s top executives. 

The automaker revealed the new model to dealers at the Mad nightclub in the hip and trendy Wynnewood section of Miami, and will do the same for customers later this week.

“We just felt this was very Black Badge,” said Richard Carter, director of communications for Rolls-Royce Motor Cars. “It’s very, noir; It’s very alternative; and that’s the essence of Black Badge.”

The Rolls-Royce Ghost Black Badge expands a line-up that began with the Wraith coupe, followed by the Phantom sedan in 2016, the Dawn cabriolet in 2017 and the Cullinan SUV in 2019. The murdered-out Black Badge models now account for more than 27% of Rolls-Royce sales worldwide, including 40% of Cullinan sales.

The darker side of opulence

To realize the Ghost Black Badge’s menacing demeanor, the company uses 100 pounds of the industry’s darkest black paint. The Spirit of Ecstasy and Pantheon Grille are darkened using a chrome electrolyte applied during chrome plating. The new model wears exclusive 21-inch wheels with as many as 44 layers of carbon fiber.

The 2022 Rolls-Royce Ghost Black Badge can be had in more that 44,000 different hues, although most Black Badge customers choose black.

As you’d expect, interior components are darkened including air vents and the wood veneer, along with Black Badge badging and other unique interior touches, although clients are free to specify any number of colors and trim to be used on the car’s interior.

Engineers also contributed, fitting larger air springs to alleviate body roll during assertive cornering. There’s also roughly 29 additional horsepower and a revised transmission to make the Black Badge a bit more athletic. They also reduced brake pedal travel.

A quick turn behind the wheel of pre-production prototypes revealed a car that can be driven more aggressively than your average Ghost. Grip is impressive while cornering, staying firmly planted despite some noticeable body roll. Body motions never become excessive, and rebound over bumps is very well controlled. Yet its agility doesn’t come at the expense of the brand’s legendary comfort.

An idea born in Beverly Hills

The idea of Black Badge occurred in 2014 in Beverly Hills.

“This whole notion of the alter ego of Rolls Royce, the slightly noir, naughty, edgy side of Rolls Royce is something that we were thinking about. We were looking at ways and means of lowering the age profile of our brand,” Carter said.

The Pantheon Grille and Spirit of Ecstasy also receive the Black Badge treatment.

At the time, the brand had one model, the Phantom, and an average buyer’s age of 57. “We were selling one model to a dying set of customers, and there was no future in that,” he said.

At the time, the company was about to release the first-generation Ghost, followed by its two-door spinoff, the Wraith, both of which would attract younger buyers. But the company needed more. They were searching for an idea, but hadn’t settled on anything yet.

Torsten Müller-Ötvös, chief executive officer, Rolls-Royce Motor Cars, was waiting for a car to pick him up at the SLS Hotel in Beverly Hills when a murdered-out Phantom Coupe pulled up. Ötvös was stunned, and asked the owner why he modified his Phantom.

“He told me over the weekend, that he wants to be a different kind of character,” Ötvös said. “For some of the week, he is friendly and nice. But over the weekend, he wants to be something different. He enjoyed playing a different role; how he was dressed, looked and talked.” 

A couple weeks later, Ötvös had similar experiences particularly in the United States, particularly in California. This led to the creation of Black Badge at a time where murdered-out cars weren’t mainstream.

A surprising success

The Ghost Black Badge is revealed for the first time at the Mad nightclub in Miami.

Initially, executives expected Black Badge models to have a 10%-15% take rate. But they were mistaken. It turned out to be a stunning success, with a far higher take rate. Currently, Black Badge represents 40% of Cullinan sales. Black Badge, along with new models like Ghost, Wraith and Cullinan, have brought the average Rolls-Royce buyer’s age down to 43, quite a large drop in a little less than a decade. 

“We are even younger than Mini as a brand in the BMW Group,” Ötvös said, who then explained that the type of wealthy car buyer has changed. 

“When you look into ultra-high net worth individuals, those people who are our target group worldwide, they became younger and younger over time because the way to generate wealth is very, very different from what it used to be 15-to-20 years ago.”

Rolls-Royce sees its Black Badge line as one that appeals to iconoclasts, a type of buyer that the brand has always attracted, particularly during the pre-World War II years, when all coachwork was custom built.

“Black Badge was the most instrumental piece we had in an all-new brand strategy to massively decrease the average age and illuminate the brand in a significant way,” Ötvös said. 

Mission accomplished.

First Look: Mitsubishi Outlander PHEV

The new Mitsubishi Outlander already has proven to be one of the most important products the long-struggling automaker has launched in its bid to become relevant to U.S. motorists again. Now, Mitsubishi is hoping to gain even more traction with the upcoming launch of a plug-in hybrid version.

2022 Mitsubishi Outlander Hero Image
The gas-powered 2022 Mitsubishi Outlander made its debut in February.

The Japanese automaker claims it will yield more range than the old Outlander PHEV, at an estimated 87 km, or nearly 55 miles, per charge — though that’s using the global WLTP test cycle and will likely come down once the American version is tested by the EPA.

“With low (carbon dioxide) emissions and environmental impact from manufacturing and use,” said Takao Kato, MMC’s president and CEO, “the all-new Outlander PHEV model can be considered the best solution for carbon neutrality today.”

Updated, upgraded drivetrain

The Outlander was first introduced in 2001 and, with the fourth generation, it has become a core part of the brand, accounting for about 20% of its global volume. The first plug-in hybrid version was unveiled at the 2012 Paris Motor Show. It produced a combined 197 horsepower by pairing a 2.0-liter inline-4 gas engine with twin 60-kilowatt electric motors drawing power from a 12 kilowatt-hour lithium-ion battery pack.

The new Outlander PHEV gets numerous powertrain upgrades, though the automaker isn’t releasing hard specs yet. In a statement announcing the new vehicle it said the plug-in gets “an increase of around 40% in the output of the front and rear motors and drive battery.” The lithium-ion pack, it did note, jumps to 20 kWh. The gas engine, added a spokesman, is a “slightly updated” version of the old PHEV’s 2.4-liter package.

Mitsubishi Outlander PHEV charging port 2022

The new Outlander plug-in hybrid will arrive in the U.S. in the second half of 2022.

Mitsubishi also revealed, “The power drive unit for the front motor is newly equipped with a booster function which bolsters driving force by raising the supply of voltage to the front motor while simultaneously improving electricity consumption by raising the efficiency of the generator.”

Third row added

The automaker also took steps to downsize some of the hardware, notably the rear motor and control unit. As a result, the new plug-in will gain room for a third row yielding space for seven occupants.

The drive system now will allow One-Pedal Driving, as well, a feature that effectively allows motorists to minimize the need to jump from throttle to brake when driving in light to moderate traffic. That feature was found to be extremely popular with EV owners, according to the recent J.D. Power Technology Experience Index.

With only modest tweaks, the plug-in adopts the same exterior and interior design as the gas-powered Outlander. The overall strategy is based on a concept dubbed “I-Fu-Do-Do,” which means “authentic” and “majestic” in Japanese.

New design

Mitsubishi Outlander PHEV badge 2022

The new Outlander PHEV is expected to travel more than 55 miles in electric-only mode.

The fourth-generation Mitsubishi Outlander adopted a new styling language called “Dynamic Shield.” Up front, it features a more upright nose with a pinched, dual-level grille and stacked headlamps. From the side, the SUV features a more deeply sculpted silhouette with a bit of a floating roof element.

The automaker clearly wanted to give the new Outlander a more solid and robust look, with such touches as 20-inch wheels and tires and what it calls the Hexagon Guard rear end.

The new SUV grew larger in virtually all dimensions, the width expanding by 2 inches. That means the cabin of the new Outlander is both wider and more spacious than the outgoing model, Mitsubishi adopting more upscale materials and features like tri-zone climate controls, real aluminum panels and a 12.3-inch touchscreen infotainment display.

The gas-powered Outlander is powered by a 2.5-liter inline-4 that bumped up power by 8.9 percent. At the same time, it reduced fuel consumption by 2.6 percent.

Pricing TBD

Many of the features from the current model are expected to carry over into the PHEV, though Mitsubishi hasn’t provided specific details. The gas model offers Hill Descent Control and Trailer Stability Assist. A Multiview camera system helps drivers see what’s around the vehicle, whether on-road or off. Other features for the new Mitsubishi Outlander include a power-operated panoramic roof and an electrically operated tailgate that can be opened with a kick of the foot under the rear bumper.

Pricing for the gas model starts at $25,795 — plus $1,195 in delivery fees. Pricing for the PHEV is expected to run higher, though the numbers won’t be released until closer to sales launch. That holds for a variety of other specs, including U.S. range, power and performance.

“Sales will commence in Japan on Dec. 16, followed by Australia and New Zealand in the first half of 2022 and North America in the second half of 2022,” Mitsubishi said in a statement. While it did not offer specifics, that would suggest that the Outlander PHEV will be marketed as a 2023 model in the U.S.

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Slow Tease of Fifth-Gen Acura Integra Continues with New Photo

Acura’s move back to the future continued today with another glimpse at the next-generation model of the Integra compact sports car. The second photo released by the brand offers a pretty good look at the rear of the vehicle.

2022 Acura Integra Teaser
Acura’s been teasing the return of the Integra in 2022. The first picture was of the headlight above.

From the photo, it’s easy to see that it will definitely come back offering at least a four-door model, although the original came in both two- and four-door versions. This isn’t a compact car that goes fast, this is a compact sports car based on the long, low roof line.

It’s going to look pretty athletic based on the rear haunch of a quarter panel that blends into the taillights that sweep from the side of the car down across the back. That wide almost-expansive look carries over to the rear bumper runs from partway up each side of the car and across in a simple, sharp curve.

Honda’s sports and luxury brand first reintroduced the idea of the Integra’s return in the middle of August, as part of its return to conventional nomenclature. 

At an event in Monterey, California leading up to the weekend’s Pebble Beach Concours d’Elegance, the Japanese automaker sent a flock of drones into the sky where they formed into the shape of the original 1986 sports coupe. Moments later, they transformed into a silhouette of what will be the next-generation Integra — and the number “2022.”

Soon afterwards, the automaker confirmed, “The Integra is back,” Jon Ikeda, vice president and Acura brand officer, declared. “I’m thrilled to say Integra is returning to the Acura line-up with the same fun-to-drive spirit and DNA of the original, fulfilling our commitment to Precision Crafted Performance in every way — design, performance and the overall driving experience.”

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Chip Shortage’s Cost Doubles to $210 Billion

The financial impact of the semiconductor shortage continues to grow and now stands at an estimated $210 billion dollars in lost automotive revenues, according to a new study.

Hyundai Santa Cruz line worker
Automakers are expected to lose even more vehicles to the chip shortage this year.

That’s nearly twice the $110 billion financial hit initially forecast by AlixPartners in May and reflects the increasing likelihood automakers will continue struggling to find the chips they need through at least the early part of 2022. Industry leaders had been hoping the issue would be resolved by this autumn. The continuing shortages will impact car buyers and carmakers alike, experts warn.

“Of course, everyone had hoped that the chip crisis would have abated more by now, but unfortunate events such as the COVID-19 lockdowns in Malaysia and continued problems elsewhere have exacerbated things,” said Mark Wakefield, the co-leader of the automotive practice at AlixPartners.

The impact thus far

Eight General Motors plants — four in the U.S., three in Mexico and one in Canada — were idled this month for two weeks or more due to a lack of semiconductors. Among Detroit’s automakers, Ford and Stellantis have repeatedly idled plants with the shortage routinely impacting some of their most profitable product lines, including full-size pickups like the Ram 1500.

Ford F-150s at Rouge Plant

Ford loses nearly $1B for each 100K F-Series trucks it loses to the chip shortage.

Last month, as Ford again trimmed back operations at its F-Series lines, Morningstar analyst David Whiston estimated the carmaker will lose about $4.7 billion in revenue for every 100,000 of the trucks it has to cut from its production schedule. On an EBIT basis, the loss, he wrote in an Aug. 13 report, will come in at $937 million. Ford has so far lost well over 100,000 of the trucks.

During an event at Ford’s new Electric Vehicle Center in Dearborn, Michigan last week, Kumar Galhotra, president of its Americas operations, said he expects the chip shortage to continue through sometime next year.

Not just local, but global problem

Stellantis Windsor line 2020

Stellantis shut down its Windsor plant due to the shortage on more than one occasion.

The crisis isn’t limited to the U.S. In fact, virtually every automaker, from Berlin to Beijing, has been impacted. All told, the new AlixPartners study estimates that the gloabl industry will lose production of about 7.7 million vehicles this year. In May, the consultancy put the figure at 3.9 million. Automakers went into the year expecting to build 84.6 million cars, trucks and crossovers, the figure now falling to an estimated 76.9 million.

That comes as a major setback for an industry that saw a chance to recover from the pandemic-fueled recession of 2020 that saw sales briefly fall to deep recessionary levels that spring. In the early months of 2021, demand for new vehicle in the U.S. actually reached some of their highest levels since the Great Recession. But recent months have seen sales tumble sharply.

Dealer inventories are running barely a third of what is considered normal this time of year, with barely 1 million vehicles on showroom lots, according to J.D. Power and other researchers. Toyota sales chief Bob Carter said earlier this month that there is barely a 10-day supply of some of the brand’s most popular models, like the Tacoma pickup. The industry norm runs north of 60 days.

Prices rise on ALL vehicles

Wentzville Assembly

GM’s shut down eight plants in North America due to the semiconductor issue at various points.

The impact on consumers has been nearly as tough as on the auto industry. The average transaction price — what motorists actually end up paying to drive off the lot — has surged to record levels in recent months, around $42,000, reports Cox Automotive. And that’s if consumers can track down what they want, many popular vehicles being all but impossible to find. As TheDetroitBureau.com recently reported, some motorists are paying $5,000 or more above sticker for the more popular products, like the Kia Telluride, the Ford F-150 and the Chevrolet Corvette.

Used car prices also surged to record levels during the first half of this month, according to tracking service Manheim.

Vehicle shortages date back to the two-month shutdown of North American automotive manufacturing in spring 2020 due to COVID-19 lockdowns. At that time, manufacturers slashed orders for semiconductors, anticipating the downturn in car sales would last through at least the end of last year. Instead, as the market rebounded, manufacturers tried restoring orders for chips. But they found the consumer electronics industry gobbled up those supplies. Now, automakers are stuck at the back of the line.

While there has been some improvement, the semiconductor industry isn’t expected to be able to meet automotive demand for months to come.

As bad as the chip crisis might be, “Chips are just one of a multitude of extraordinary disruptions the industry is facing,” said AlixPartners’ Wakefield, “including everything from resin and steel shortages to labor shortages. There’s no room for error for automakers and suppliers right now; they need to calculate every alternative and make sure they’re undertaking only the best options.”

As a result, automotive factories could be operating in fits and starts, the consultancy warned, for some time to come.

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Ford Nabs Top Apple Executive, Dealing Potential Setback to Apple Car Program

The on-again/off-again Apple Car program has just been dealt another blow — even as the tech giant is reportedly talking to Toyota about a partnership that could finally bring the project to production.

Ford CEO Jim Farley
Ford CEO Jim Farley tweeted the company secured former Apple and Tesla exec Doug Field to work on its next generation of digital vehicles.

Ford Motor Co. confirmed Tuesday that it has hired Doug Field, a product engineering executive who previously worked at both Tesla and Apple. He was also thought to be one of the key managers on the long-rumored Apple Car program. It’s unclear how much of a setback that could be at a time when Apple insiders are hinting at putting a car into the market by mid-decade.

“Doug is one of the world’s most respected engineering and product design leaders and has been a driving force behind breakthrough products across auto, tech and mobility, including at Apple, Tesla and Segway,” Ford CEO Jim Farley said in a statement.

Returning to his roots

It’s actually not his first time in Detroit, Field having begun his engineering career at Ford before moving out to Silicon Valley. There he served in a number of different fields, working on Mac hardware before taking a key job as part of Tesla’s Model 3 development effort.

Field returned to Apple and was, according to insiders, a key part of the Apple Car program. That effort, operating under the codename Project Titan, has undergone a number of changes during the past decade.

Apple iCar rendering

Field’s shift to Ford comes at Apple is reportedly in talks with Toyota to produce its long-awaited Apple Car or iCar.

While the company has only provided sketchy details, it reportedly backed away from early plans to build a vehicle on its own, several years ago releasing or transferring a large portion of the project’s development team.

A mobile device on wheels

Since then, Apple has been focusing on design and technology development, according to Katy Huberty, a senior analyst at Morgan Stanley. “The car is essentially the next mobile device, and this is a category that Apple has focused on for years,” Huberty said in a report published by the financial services firm.

Much as Apple does with its iPhones, Huberty said, it is looking for a partner that would handle manufacturing of what is expected to be an all-electric and autonomous vehicle. But that search has proven quite difficult.

Earlier this year, officials with the Hyundai Motor Group confirmed the company was in discussions with Apple that could have led it to become the manufacturer of the Apple Car. That project collapsed for unknown reasons.

Apple CEO Tim Cook

Apple CEO Tim Cook has never formally confirmed the company was looking to build a car, saying only that the idea was compelling.

Are Apple and Toyota talking?

Now, it is being reported, Apple is talking to Toyota, though spokesman Scott Vazin told TheDetroitBureau.com, “We do not comment on speculation.” Apple did not reply to a request for comment.

In years past, such an alliance would have seemed unlikely, Toyota averse to working with outside companies. The company has reversed course since CEO Akio Toyoda came onboard, Toyota forming a number of partnerships and alliances.

On Tuesday morning, the Japanese automaker outlined its ongoing electrification program which allies it up with several battery manufacturers, including Yuasa and Panasonic. Meanwhile, Toyota teamed up with BMW to develop its Supra sports car, and with Subaru to develop the smaller GR 86 sports car.

Hyundai assembly line

The last time Apple spoke with an automaker it was Hyundai and the talks centered on building the car at the Kia plant in West Point, Georgia.

Adding to the latest surge of news coverage, Apple reportedly has reached out to several South Korean battery suppliers, including LG Electronics and the SK Group, according to MacRumors.

Strategy goes beyond selling cars

According to some sources, Apple wants to have its new vehicle in production by 2024, while others speak of a window five to seven years out from now.

As with the iPhone, Apple is expected to set up its own distribution network and to view the vehicle as more than just another car.

“I think the focus right now, I’m sure, is on design and the vehicle itself, but with well thought out plans around what services could emerge longer term,” said Morgan Stanley’s Huberty.

That’s becoming a new strategy across the car industry, automakers looking at ways to not only sell vehicles but to develop an ongoing stream of revenue opportunities such as providing in-vehicle entertainment, updated infotainment, safety and performance software and subscriptions to autonomous vehicle functionality.

Get the Latest News on the Go with TheDetroitBureau’s Headlight News Podcast

TheDetroitBureau.com is all over the big news within the auto industry in our latest podcast, Headlight News. The weekly roundup includes news, features, reviews and more. 

car sales
New vehicle sales are expected to fall by double-digits due to the impact of the semiconductor shortage.

The Aug. 30 episode features a recap of stories by TheDetroitBureau’s Publisher Paul A. Eisenstein. August sales are expected to be down by double-digits — but not for a lack of buyers. The ongoing chip shortage is reducing dealer inventories — and their sales. Other stories in the podcast include:

  • The resurgence of the COVID virus is forcing automakers to rethink their plans for bringing workers back into their facilities, after already reinstating mask mandates. 
  • AAA estimates Americans will spend nearly $10K to own and operate their vehicles: a new record. 
  • Ford plans to double its production output of the F-150 Lightning due to the popularity of the new electric pickup.
  • As driving fatalities continue to rise, GM is experimenting with new technology that would allow vehicle owners to start their cars unless they were buckled in. Part of the reason for the rise in traffic deaths is a decline in seat belt usage.

Executive editor Joe Szczesny follows with our top story: GM’s two recalls of all of its Chevy Bolt EVs due to defect with the battery than can cause them to catch on fire. The recall will cost the company about $1.8 billion.

2022 Ford F-150 Lightning solo

Ford plans to double its initial production output of the Lightning after receiving an overwhelming number of reservations.

Contributing Editor Larry Printz reviews the 2022 Volkswagen Taos. The new crossover is now the least expensive hatchback one can find in VW’s line-up. It’s a solid performer that fits in with it larger siblings.

Looking at the week ahead, Managing Editor Michael Strong notes J.D. Power will unveil the results of its annual Initial Quality Study. Dodge tied Kia for the top spot last year in a surprise. Additionally, Cadillac plans to offer a closer look at its new Lyriq EV slated to arrive early next year. Subaru will show off the next model to get its Wilderness package. Finally, automakers will put hard numbers to what’s expected to be a hard month when they report sales late in the week. 

Larry returns to bring automotive history to life, including actress and race car driver Anita King sets out to drive across the country — in 1915. She becomes the first woman to do so. In 1922, Chitty Bang Bang, a 23-liter Mercedes, debuts in England. The car inspires Ian Fleming to write Chitty Chitty Bang Bang, which is later made into a beloved children’s movie. Malcolm Bricklin makes another splash in the American car market in 1985 bringing the Yugo — then the cheapest new car available — to the U.S. After some early buzz, the car’s poor build quality and a 0-60 time best recorded with a sun dial dooms it to failure.

Check out TheDetroitBureau’s latest edition of the Headlight News podcast by clicking here. And look for a new episode every Monday! 

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Ford Suffers Setbacks on Big Sellers: Bronco and Mustang Mach-E

Ford’s enduring a tough day, forced to deal with big problems on two of its hottest vehicles: the Bronco and Mustang Mach-E. 

Ford Bronco 4-door quality check
The roof problems with the new Bronco are still unresolved, forcing Ford to replace the parts on all owners’ vehicles while halting production.

The long-awaited Bronco’s problems with its removable hardtop still haven’t been resolved, forcing it to replace the pieces on existing models and halt production on new hardtop models to solve the issue. Soft top Broncos will continue to roll down the line.

Meanwhile stopping production is the problem for the Mach-E as it awaits — no surprise — more semiconductors. Perhaps no company’s been hit harder by the chip shortage than Ford. The company’s had to temporarily shut down builds on its biggest sellers, like the F-150, Explorer and now the Mach-E.

Bronco busted

The problem with the Bronco’s roof applies to the removable molded-in color plastic panels only, as reported by the website, bronco6g.com. The color and protective coating applied to the roof pieces is faulty, which becomes apparent a few weeks after the vehicle’s been exposed to the elements.

As a result, the coating comes off on the edges of the panels, which are not smooth. With a bit of time, weather can change the color of the panels. Reportedly, this issue’s plagued the design for some time now. 

2021 Ford Bronco 2-Door - in brush

The Bronco roof issues apply to the two- and four-door models, but not soft tops.

The automaker’s telling owners who have already taken delivery of their vehicles that they will replace the panels at no cost. However, the real tough sell is for buyers who haven’t gotten their vehicles yet and will now be forced to wait even longer to get their vehicle — possibly until 2022.

Not only might you have to wait until next year, it may be next year’s model as well, which could make those who felt it was important get the first year offering angry. The exception is for the prospective owners who ordered a First Edition model, those will be 2021 vehicles.

Ford is offering reservation holders $1,100 in reward points, which can be used to buy Bronco accessories for their SUVs. Also anyone who made a reservation before March 21, 2020, are protected from any price increases that could be applied to 2022 vehicles.

Soft top owners are obviously excluded from the problem and are virtually assured of getting their vehicle a little sooner now.

Mach-E matters

2021 Ford Mustang Mach-E side barn

Production of the Mach-E will be delayed six weeks as the company secures more chips.

The Mustang Mach-E, which is sold out through the rest of the year, now faces the same delays that have plagued the F-150, the Explorer and other vehicles, due to the dearth of semiconductors. 

According to MachEForum.com, new owners will now be forced to wait six weeks or more for their vehicles. Once the automaker gets the chips it needs, and installs them in the vehicles, it will update the owners via email about when they can expect to get their EV.

To smooth ruffled feathers, Ford is offering 250 kWh of free charging via the “Blue Oval Charge Network.” 

The delays are another gut punch for the automaker, which sees the Mach-E’s turn in just 12 days. Not only that, but they’re also big additions to the bottom line as 95% of customers choose the Blue Oval Intelligence software state service. Sales of the Mach-E jumped 15.8% in July compared to June, and this is definitely going to stall that momentum.

The Bronco’s issues also hit the bottom line as they, as the automaker noted in its July sales release, play “a significant role in Ford’s transaction price expansion. Ford SUV transaction pricing in July is a record of $42,000 per SUV, up $6,200 over last year.”

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New Vehicle Prices Set All-Time Record, With No End in Sight to Rapid Rise

New vehicle prices continued an unprecedented rise last month, the upward jump reflecting a variety of factors, including ongoing inventory shortages triggered by the pandemic and problems sourcing critical semiconductors.

Prices on new vehicles are at an all-time high. The average prices of a new vehicle in June was $42,258, according to KBB.com analysts.

The typical new vehicle buyer laid out an estimated $42,258 in June, according to Kelley Blue Book. That was up $928 from May, and $2,527 – or 6.4% — from June 2020.

“New-vehicle affordability continues to decline as the income required to purchase the average new vehicle continues to climb,” said Kayla Reynolds, industry intelligence analyst at Cox Automotive.

Price surge hitting new and used vehicles alike

The recent surge in pricing has been one of the most dramatic in the last half century, with only a few exceptions, notably during the inflation-plagued era of the late 1970s and early 1980s. To put the latest surge into perspective, the typical new vehicle price was around $36,000 at the end of 2019, according to manufacturer data.

And the runup of new car prices, along with the lack of inventory, is hammering used car buyers, as well, with prices for most previously owned products now at record levels, according to industry data. In a number of instances, used products are now going for more than they did when new. And even vehicles with more than 100,000 miles on the odometer are in high demand and commanding record prices, TheDetroitBureau.com reported earlier this month.

“There are a lot of reasons why prices keep going up,” said Stephanie Brinley, principal auto analyst with IHS Markit, “though the pace may settle down” in the coming months.

The rise in new vehicle prices isn’t just because of wildly popular trucks and utility vehicles — midsize sedan prices jumped big last month.

Low inventories play a primary role

Automakers have been hit hard by rising prices for both raw materials and components, said Brinley, though a more severe problem has been the shortage of new vehicle inventory.

Manufacturers were forced to temporarily halt operations in many countries in spring 2020 due to the COVID-19 pandemic lockdowns. As they were racing to catch up later in the year, however, automakers found themselves facing severe shortages of the microchips used for everything from engine control modules to digital infotainment and safety systems. That has led to frequent factory slowdowns and closures this year.

“We came into the year with very, very limited inventory,” and due to “the chip-related shortages we’ve remained at that low level,” Duncan Aldred, the head of the GMC brand, said during a Monday media webinar.

Although sedan prices did jump, the demand for expensive SUVs and pickups continues unabated, which also drives the numbers up.

As a result, both manufacturers and retailers have been far less willing to cut deals. Factory incentives, in particular, have been plummeting. They typically vary by region, but Ford offers a few examples of the current, downward trend. In New York, it currently offers a $3,000 “trade-in assistance” package for buyers of the 2021 Escape crossover. That will drop to $500 at the end of this month. Across the country, Ford is cutting back trade-in incentives for the F-150 pickup by 60%, from $2,500 to just $1,000.

“In June, for the first time in a decade, vehicle buyers were essentially paying sticker price — the manufacturer’s suggested retail price — for new vehicles,” said KBB’s Reynolds.

Buyers also catch some of the blame

New car buyers catch some of the blame for rising prices, however. By the millions, they continue to shift from sedans and coupes to the higher-priced SUVs, CUVs and pickups that now account for more than two-thirds of the U.S. new vehicle market. And they continue loading up with more options, while upgrading to more premium trim packages, industry data indicate.

Fully 50% of GMC buyers are now opting for the brand’s top-line Denali and AT4 models on product lines where they’re available.

Every manufacturer but Tesla showed an increase in new vehicle prices in June compared to a year before, KBB reported. Mitsubishi saw an 18.3% jump, the industry’s highest, with Stellantis up 15.8 percent. The industry average was 6.36 percent.

EV prices were down overall last month, led by the fact Tesla didn’t raise its prices at all in June.

During the past year, some of the biggest price increases hit SUVs and pickups, the market segments that have also seen the biggest increases in demand. Full-size pickups were up 8.7% year-over-year, KBB reported, while prices for midsize SUVs and CUVs rose 6.8 percent.

Prices tumble — but only in this one market segment

Some shoppers shifted plans in recent months, hoping to get better deals by buying lower-demand products, particularly in the passenger car segment. But inventory shortages appear to be catching up with them too.

In June, some of the biggest price hikes came in the midsize car segment, prices jumping 11.3%, while full-size cars were up 10.5 percent. And minivans, which have been losing market share for several decades, saw a resurgence — at least in terms of prices which were up an average 17.8% year-over-year.

Hybrids and other “alternative energy” cars experienced a 9% jump in June compared to June 2020. But the only group of products to post a decline in year-over-year pricing was the battery-electric vehicle segment, down by 13.4 percent.

That reflects the arrival of new, lower cost products, like the Volkswagen ID.4, as well as the industry’s push to hold down pricing to help boost demand for those all-electric models.

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Ford to Drop Diesel F-150 This Week

Ford

Sorry, diesel fans. Just three years after introducing a Power Stroke diesel for the F-150, Ford is dropping the diesel option.

And doing so with haste.

If you want to grab one of the last ones available, you have until Friday to do it.

Part of the problem, says Autoblog, is that the turbocharged gas options make more power and cost less than the diesel’s $4,995 price. They offer better towing capacity, to boot.

There’s also a hybrid model that is slightly cheaper, has slightly better towing, and is on par in terms of fuel economy.

Of course, diesel engines offer something gas engines don’t — low-end grunt.

While the diesel no longer seems to be the best powertrain option on paper, some buyers will still miss it. For the rest, special order by Friday or forever hold your peace.

Or, you know, save your dough for the upcoming Lightning.

[Image: Ford]