Chairman’s Blog: Mike’s Message Holiday Season Brings Joy, Optimism

First Up 12/04/23

Chairman’s Blog: Mike’s Message
Holiday Season Brings Joy, Optimism

AIADA Chairman Mike DeSilva is back with another blog post. Every year at this time, as the Holiday season comes around, one of my favorite movies, National Lampoon’s Christmas Vacation seems to be on a constant loop on TV. I think everyone in the auto industry can relate to one scene in particular, watching the emotional highs and lows of Clark Griswold trying to get all 25,000 Christmas lights on his house to light up. After hours of painstaking work, the lights finally go on only to have the switch flipped off and the house go completely dark. Then the switch goes back on and the house lights up again, so bright and beautiful it’s visible from space. As he stands there proudly admiring his work, he gets the disheartening reminder that the lights aren’t twinkling. That emotional roller coaster certainly lines up with the highs and lows our industry has seen this past year.  We’ve seen the highs of new and exciting product, improving availability of inventory, and continued strong consumer demand. We’ve also seen the lows of unreasonable EV mandates, high interest rates, and political headwinds.  It seems as soon as we gain some momentum, a new policy or regulation pops up and throws a wet blanket on us. Click here for the full blog post.

Toyota Motor, Honda Rebound Continues, Hyundai, Kia Advance Behind Record November Volume

Lexus gave a major boost to Toyota Motor Corp. last month while Hyundai and Kia continue to rack up U.S. sales gains as inventory improves and discounts rise across the industry. Sales rose 17 percent at Toyota Motor last month, with volume surging 70 percent at Lexus and 10 percent at Toyota. Honda Motor Co.'s rebound from chronic chip and inventory shortages continued last month with volume rising 33 percent, reports Automotive News. Sales rose 32 percent at the Honda division and 38 percent at Acura. Sales rose 11 percent to 70,079 vehicles last month at Hyundai, with a lift from fleet shipments, while volume advanced 3 percent to 58,338 at Kia. It was the 16th consecutive monthly increase for each brand. Subaru said November sales were up 6.4 percent, its 16th consecutive increase. Mazda, after a dip in October volume, saw November sales bounce back and rise 3 percent to 27,715. Genesis also set a U.S. sales record with 5,987 vehicles sold, a gain of 20 percent for its 13th straight monthly increase. Click here for the full story.

Why Repairing Your EV Is So Expensive

Electric-vehicle owners are finding a surprising downside to their new wheels: They tend to be expensive to repair after a crash.  When Scott MacFiggen’s neighbor backed into his Rivian R1T pickup truck last summer, the vehicle was left with a dent the size of a bowling ball under a rear taillamp. MacFiggen was expecting a couple-thousand-dollar bill from the repair shop and to be without his truck for a couple of weeks. “I guess I was a little naive,” said the 51-year-old San Francisco resident. The actual bill came to $22,000, and the vehicle took 2½ months to fix, reports The Wall Street Journal. For EVs, repairs following a collision can cost thousands of dollars more than their gas-powered counterparts, because the fixes tend to require more replacement parts, the vehicles are more complicated and fewer people do such repairs. While those issues may ease over time, first-time electric owners may be startled by the higher costs and longer wait times. Last year, repairing an EV after a crash cost an average $6,587 compared with $4,215 for all vehicles, according to CCC Intelligent Solutions, a company that processes insurance claims for auto repairs in the U.S. Click here for the full story.

BMW Takes iX5 Hydrogen Vehicle on ‘World Tour’

BMW of North America is rolling out its iX5 Hydrogen pilot vehicle on a “world tour” designed to both gather feedback and educate possible stakeholders. Wards had the chance to drive the concept vehicle – a 5-Series with the internal combustion engine replaced with a hydrogen fuel cell stack – during two test drives of 30 and 90 minutes, respectively. The first drive was in lower-speed situations on city streets, while the second opportunity included a long period on an interstate highway with several instances where rapid acceleration was necessary for merging. The driving experience felt similar to a high-powered BEV such as the Lucid Air or Kia EV6 GT. Handling was similar to a gas-powered BMW 5-Series, which is to say it was very responsive. The weight of the car is on par with a hybrid x5 (or comparable PHEV). The vehicle has normal BMW features including sport, comfort, and Eco mode. The test vehicles, which were driven by several dozen journalists each day during the BMW “Test Fest” event, were refueled each night at BMW’s nearby Spartanburg, S.C., plant. Click here for the full story.

Leases Will Continue Yielding Positive Equity, Experts Say

Experts predict consumers won't find a state of negative equity at the end of their leases for at least another year. "Not anytime soon," Jonathan Gregory, Cox Automotive economic and industry insights senior manager, said during the Auto Finance Summit here in October. Equity might normalize somewhat in a year and a half to two years out, but for now, it remains "extremely elevated" compared with before the COVID-19 pandemic began, said Kristen Lanzavecchia, director of industry solutions at J.D. Power. Black Book Chief Data Scientist Alex Yurchenko agreed, predicting positive equity was likely to continue for the next two years. According to Automotive News, a lease splits the cost of a vehicle between the monthly payments for the lease term and the residual value — the contractually defined amount a lessee can buy the vehicle for at lease end instead of returning it. Often, the residual value leaves the vehicle with negative equity: It costs more to buy out than what the vehicle is worth. In 2020, for example, the average 2017 model year vehicle coming off lease after 36 months started the year with a couple thousand dollars in negative equity, according to Cox; ultimately, the 2017 model year averaged $990 in negative equity in 2020. Click here for the full story.


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