Asian Automakers Make Big Share Gains as SAAR Drops
The auto industry's ongoing experiment in forced inventory reduction may be great for quarterly earnings, but it is starting to take sizable bites out of sales and altering the market share landscape. Automotive News reports that sales in July rose an estimated 5 percent over last year as record-low inventories caused by the severe microchip shortage and other supply chain disruptions, especially among the Detroit 3, dropped the annualized pace of sales to 14.8 million — well off the 17 million-plus pace from the first half of the year. It was the lowest SAAR since July 2020, when the industry was regaining steam from earlier COVID-19 related shutdowns. Among the seven automakers reporting July sales, Mazda jumped 36 percent; Toyota Motor North America's sales climbed 33 percent; Hyundai-Kia rose 29 percent; Volvo was up 19 percent; and American Honda's sales rose 8 percent over the previous year. Meanwhile, Subaru's sales slipped 2.6 percent, and Ford Motor Co.'s plummeted 32 percent in July. For more sales results, click here (source: Automotive News).
Biden’s Electric-Car Ambitions Face Real-World Roadblocks
President Biden wants to convert American motorists to electric cars as a linchpin of his plan to address climate change. Success heavily depends on factors outside his control. The Wall Street Journal reports that Auto makers say they could meet an EV target of somewhere between 40 and 50 percent of sales, but only if Congress spends billions of dollars to build out a network of EV charging stations and provides tax incentives to consumers, among other measures. Mr. Biden voiced his support for union workers throughout an event at the White House on Thursday where he signed the executive order, with executives from Ford, GM, and Stellantis NV—all union shops—looking on. The White House left out foreign auto makers, including Toyota and Hyundai, whose U.S. workforces aren’t union-represented, as well as Tesla Inc., the company that has led the way in building a market for EVs. The exclusion led to a rebuke from AIADA, which noted that any policies that “prioritize some American auto workers above others…politicize what should be a shared mission,” making reaching the EV sales target more difficult. Click here for the full story (source: WSJ).
Nissan Overtakes Jeep in Most-Seen Auto Ads Race
Nissan has bumped Jeep out of first place in iSpot.tv’s ranking of the most-viewed automotive commercials – the ads that have generated the most impressions across national broadcast and cable TV airings. According to Wards, for the week of July 26, Nissan’s “Return to Rugged” spot took the top spot based on the performance of its placement, getting plenty of airtime in such popular sitcoms as Two And A Half Men and King of Queens (in syndication), as well as Young Sheldon. Click here to watch it. According to Ace Metrix Creative Assessment survey data from iSpot, viewers in the past 90 days found the product the single best thing about the ad at 23 percent of those surveyed, with the visuals second at 19 percent. A newcomer, Toyota’s “National Sales Event: Open New Doors” spot, takes the second-place spot vacated by Nissan. According to Ace Metrix, viewers found the spot 3.7 percent more watchable than the norm for automakers in the past 90 days. For more on the most watched auto ads today, click here (source: Wards).
German Luxury Moves Rapidly into the Electric Era
German luxury is going electric. The segment's heavyweights — Mercedes-Benz, BMW and Audi — will roll out a conga line of next-generation electric vehicles in the U.S. starting next year. Automotive News reports that the Germans join the broader industry in a wholesale pivot to EVs as they chase stringent — and expensive — emission-reduction targets in Europe and China. But Mercedes-Benz parent Daimler last month indicated it is speeding up its transition to zero emissions. The company plans to invest more than $47 billion between 2022 and 2030 to develop full-electric vehicles. Next year, Mercedes will bring up to three battery-electric utility vehicles and an electric midsize sedan to its U.S. stores. Rival BMW will debut two electric models in the first quarter of 2022 — the i4 four-door fastback and the iX midsize crossover. Meanwhile, Audi announced this year that it will stop selling internal combustion-powered vehicles in 2033 and that it will end the development of new gasoline engines in 2026. For more on German EV development, click here (source: Automotive News).
To Beat Tesla, Volkswagen Bets on Making Its Own EV Batteries
Many of the world’s traditional auto makers are racing to develop their own batteries for electric cars, embracing a strategy that helped turn Tesla into the market’s biggest player. Volkswagen’s years long effort shows the challenges. The Wall Street Journal reports that analysts forecast that the German giant, already one of the world’s two largest auto makers by sales, will be its biggest EV maker as soon as next year. Making a cost-effective battery, though, is key to whether the push makes Volkswagen any money. The batteries in VW’s current models are outsourced, but the company has said it plans to start building its first battery plant in Germany next year. More factories are expected to come online between now and 2030, VW has said, including four in Europe, as well as plants in the U.S. and China. Longer term, VW is investing in experimental technology that it believes could yield cheaper, longer-lasting and more stable batteries. For more on VW’s plans, click here (source: WSJ).
