Automakers Trim Production as Market Weakens

First Up 08/12/19

Automakers Trim Production as Market Weakens
General Motors will trim production of the Chevrolet Equinox SUV at two North American car plants, a move that follows cuts announced by Ford, Honda, and other manufacturers, reports CNBC. Automakers are facing what is only the second down market since the end of the Great Recession and the record sales that followed. How far down demand will go this time is a matter of debate, with analysts and planners warning that could depend on how the Trump administration handles disputes with China and other trade partners. Industry officials, including General Motors CEO Mary Barra, say they learned critical lessons during the last recession and hope to be more proactive this time around, adjusting production early to stay in line with market demand while avoiding the sort of budget-busting incentives that devastated industry balance sheets a decade ago. Read more here.

Car Prices Are Approaching $40K, But Here Are 4 Reasons Why Relief May Be In Sight 
Sticker prices on new vehicles are approaching $40,000 as the nation’s SUV craze continues. But relief may finally be in sight, reports USA Today. A confluence of factors, ranging from a glut of SUVs to increasing discounts and the slowing market for new vehicles, may be poised to slow the ascent of prices. That doesn’t mean new cars will suddenly be cheap. But prices are no longer on an unstoppable upward climb. Automakers offered 2,923 deal packages in July, up 27% from a year earlier and up 9.7% from a month earlier, according to Cox Automotive. And, dealers under pressure to sell this year’s models. At this time of year, dealers are supposed to be transitioning to next year’s models. But this year, they’re behind. Read more here. 

GM, Volkswagen Say Goodbye to Hybrid Vehicles
Automakers for two decades have leaned on hybrid vehicles to help them comply with regulations on fuel consumption and give customers greener options in the showroom, reports The Wall Street Journal. Now, two of the world’s largest car manufacturers say they see no future for them in their U.S. lineups. General Motors Co. and Volkswagen AG are shifting the bulk of their future investment into fully electric cars, seeing hybrids, which save fuel by combining a gasoline engine with an electric motor, as only a stopgap to ultimately meeting tougher tailpipe-emissions requirements, particularly in China and Europe. GM plans to launch 20 fully electric vehicles world-wide in the next four years, including plug-in models in the U.S. for the Chevy and Cadillac brands. Volkswagen also has committed billions to producing more battery-powered models, including introducing a small plug-in SUV in the U.S. next year and an electric version of its minibus around 2022. Read more here (subscription required). 

Nissan Adamant About Its Small Cars
Nissan contends lower-cost small cars, such as the Versa, remain relevant, reports Automotive News. While much of the auto industry steers away from the evaporating sedan market in the U.S., Nissan is accelerating toward it with product reboots. Nissan this month unveiled a redesigned Versa subcompact — now bigger in proportion, bolder in design and bundled with technology typically found in more upscale vehicles. Meanwhile, a freshened Nissan Sentra compact is on the way that gives the car a design and powertrain makeover. Nissan's investments come as the small-car share of the U.S. light-vehicle market contracted to 12.4 percent last year from 18.2 percent in 2014. Americans are cold-shouldering sedans as they swoon over roomier, more versatile crossovers. Read more here (subscription required). 

Robot Cars Drive Forward Without Clear Direction From Washington
Motorists may have to rely on automakers to keep them safe in self-driving cars in the absence of clear direction from Washington, reports The Detroit News. Congress can’t seem to agree on updating the laws to allow widespread deployment of autonomous fleets. And the National Highway Traffic Safety Administration has resisted calls for mandatory regulations that force automakers to disclose testing data. Legislation died in December that would have directed the U.S. Department of Transportation to update federal safety standards to ensure that autonomous vehicles match safety levels required for human-operated cars. It would have allowed each automaker to annually sell more than 80,000 self-driving cars without steering wheels or brake pedals; current law only allows carmakers to test 2,500. Read more here. 

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