TransUnion: Slight Uptick in Auto Loans in 2022, Buoyed by Below-Prime Demand
TransUnion projects 28.3 million auto originations in 2021 and 28.9 million in 2022, with the number of nonprime originations rising from 9.4 million to 10 million and making up a greater proportion of the overall volume, too. TransUnion said it expects lenders to write more auto loans next year than in 2021 or even pre-pandemic 2019. But the volume, they said, would remain relatively constant year over year. "It's quite flat," Satyan Merchant, TransUnion senior vice president of auto financial services, told Automotive News on Monday. Borrowers with credit scores below prime, particularly those in the subprime segment, would drive the projected overall growth during the first half of the year, Merchant said, pointing to "very, very low" subprime demand in the first quarter of 2021. TransUnion anticipates 28.3 million auto originations in 2021 and 28.9 million in 2022, with the number of nonprime originations rising from 9.4 million to 10 million and making up a greater proportion of the overall volume, too. For the full story, click here.
Biden Agenda Risks Delay Into 2022 as Manchin Talks Falter
Senate Democrats are preparing for the possibility that passage of President Joe Biden’s roughly $2 trillion economic agenda will get delayed until the new year, as negotiations falter between the White House and West Virginia Senator Joe Manchin, according to people familiar with the negotiations. Bloomberg reports that Manchin has repeatedly raised concerns about the cost and impact on the economy of the legislation to carry out Biden’s plans for social spending and climate mitigation. The discussions between Biden and Manchin have been going poorly, according to two people, who spoke on condition of anonymity because the talks are private. Manchin has proposed eliminating a key component of the bill -- a one-year extension of a child tax credit that provides monthly payments to millions of parents. In November Manchin also came out in opposition to new electric vehicle tax credits for cars and trucks built by unionized workers. For the latest on budget negotiations, click here.
Dealers and their employees should contact their Members of Congress and urge them to oppose this proposal that will divide American workers and play politics with car sales. Click here to learn more about the issue and to contact your legislators.
Toyota Says it will Build Record 800,000 Vehicles in January
Toyota Motor Co said on Wednesday it planned to build 800,000 vehicles globally in January, a record for the month, as it ramps up production to make up for output lost to parts shortages. "We will continue to maintain our production forecast of the 9 million unit level" for the year to March 31, the company said in a press release. Reuters reports that the production plan for January represents an increase of 60,000 vehicles from a year earlier. The world's largest automaker by volume has been affected by a shortage of parts supplied by COVID-19 hit factories in Malaysia and Vietnam. The company this week said those shortages are forcing it to halt some manufacturing in Japan in December, resulting in lost production of 14,000 cars for the month. Click here for more on Toyotas’ plans.
Nissan Will Build Battery Recycling Factories in U.S., Europe by 2025, Report Says
Nissan Motor Co. plans to build new battery recycling factories in Europe and the U.S. by the end of fiscal 2025, the daily Nikkei reported on Thursday. Nissan hopes that recycling batteries for EVs will help lower production costs as the price of rare metals rise, Nikkei said. According to Automotive News, the factories would be the company's first battery recycling facility built outside of Japan. Last month, the company announced its electrification push, committing to spending $17.53 billion over five years to increase vehicle electrification to catch up with rivals in one of the fastest growing segments for automakers. The company said they plan to launch 23 electrified vehicles, including 15 EVs, by 2030. For the full story, click here.
Automakers to Battle Chip Crisis for Years, Consultancy Says
Carmakers should brace for the global semiconductor shortage to last beyond next year and redesign cars so they need fewer of the high-tech components, consultancy Roland Berger said. Severe bottlenecks will persist through 2022, analysts at the Munich-based firm said, in a departure from many automakers hoping that the crisis would ease in the second half of next year. Capacity will remain constrained in the long term as chipmakers aren’t investing in additional supply to make the older semiconductors typically used in today’s models. According to Bloomberg, manufacturers should put even more effort into monitoring the chip industry to keep up with looming production snarls. A shift to a central design with one onboard computer controlling a range of functions could drastically cut the number of chips needed in a vehicle, Roland Berger said. Swapping out older platforms for new ones would also mean cars contain the latest generations of chips for which production capacity is increasing. For more predictions on how the chip crisis will play out over the coming months, click here.
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