Average Age of U.S. Vehicles Hit Record 12.1 Years in 2020
The average age of U.S. cars and light trucks rose to a record 12.1 years in 2020, as Americans drove fewer miles and scrapped more vehicles during the COVID-19 pandemic, according to IHS Markit. Reuters reports that the research firm said the two-month increase in vehicles' average age over the 2019 figure could be short-lived as sales of both new and used cars continue to pick up as the pandemic eases. Vehicle miles traveled in the United States declined more than 13% in 2020, according to IHS, while more than 15 million vehicles were scrapped - about 5.6 percent of the total vehicle population. Normally, such a high scrappage rate would cause average vehicle age to decline, the firm said. But fewer miles traveled, combined with lower vehicle sales during the pandemic, had the opposite effect, with average age rising from 11.9 years in 2019. Read more here (Source: Reuters).
Robust Profits Trump Inventory Worries
Robust profits on vehicle sales amid microchip-related inventory shortages produced record levels of optimism in Cox Automotive's quarterly poll of dealers, reports Automotive News. Respondents to the Dealer Sentiment Index survey reported the highest scores in the four years of the study when asked about the current strength of the vehicle market and the outlook for the next 90 days. Yet low supplies of vehicles rocketed to the top of concerns holding business back. Some 67 percent of franchised dealers cited limited inventory as the chief drag on their business, dwarfing previous top concerns such as the political climate and the impact of COVID-19. "Universally, everybody is focused on inventory," Jonathan Smoke, Cox's chief economist, told Automotive News. Still, he said: "This is the best of times. We may not see an environment quite like this over the next several quarters." Read more here (Source: Automotive News).
To Score Used Vehicles, Dealers Are Getting Crafty
Troy Duhon has turned his sellers into "an army of buyers," reports Automotive News. The dealer principal of Premier Automotive Group said his salespeople are getting spiffs of $200 to $400 for acquiring used cars and trucks off the street, namely through social media sites such as Facebook. "I had one particular salesperson last month buy 10 off the street," Duhon said. "And I made over $40,000 on those 10 vehicles." Such efforts have become more crucial than ever amid an overall shortage of sale-ready used vehicles coupled with unrelenting demand from customers. With wholesale prices climbing to record highs week after week, dealers have become especially innovative in how they land quality used inventory to meet demand and preserve margins — although most have been extraordinarily profitable in this unprecedented market. Read more here (Source: Automotive News).
Carlos Ghosn Fallout: American Father, Son Plead Guilty to Role in Escape
Americans Michael Taylor and Peter Taylor pleaded guilty in Tokyo on Monday to the charge of helping former Nissan Motor Co. chief Carlos Ghosn escape Japan in a box aboard a private jet in late 2019, reports The Wall Street Journal. Michael Taylor, a 60-year-old former Green Beret, and his son Peter Taylor, 28, were brought into a Tokyo courtroom in handcuffs surrounded by guards for the first day of their trial. After prosecutors read out a summary of the charge, the Taylors told the judge the prosecutors’ statements were correct. The defendants didn’t speak further on Monday, but a second trial session was scheduled for late June. Read more here (Source: The Wall Street Journal).
Koenigsegg, the Maker of $3M Supercars, Experiments with Volcano Fuel
Hypercars with $3 million price tags aren’t usually synonymous with environmental sustainability, reports Bloomberg. Christian von Koenigsegg, founder and chief executive of Koenigsegg Automotive, wants to change that. The Ängelholm, Sweden-based company is experimenting with ultra-high-voltage battery packs and biofuels using emissions from volcanoes to build environmentally “benign” and potentially even carbon-neutral cars, without sacrificing performance, reports Bloomberg. Founded in 1994, Koenigsegg has slowly ramped up output of its vehicles to around 35 units a year. The company sells to the super rich in search of cutting-edge technology, exclusivity and hand-craftmanship using the lightest bespoke materials. In the midst of a global pandemic, Koenigsegg’s already-small volume was hampered, and the global shortage of semiconductors has not helped. However, Koenigsegg has big ambitions for a next phase: to double its factory footprint within two to three years and expand production capacity to thousands of cars a year. Read more here (Source: Bloomberg).
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