Another Strain on Automakers: Meeting Fleet Demand
Fleet operators — rental car agencies, commercial businesses and governments — have purchased more than a million vehicles from automakers this year, and they would like to purchase many, many, many more if they could. According to Automotive News, automakers are like mother birds staring down at nests full of hungry chicks, facing tough decisions about which mouths to feed as they continue to struggle to manufacture vehicles — franchised dealers with empty lots or fleet operators willing to pay more than ever to keep their businesses moving. And each of those hungry mouths are motivated to do whatever it takes to stay fed. "Today, the fleet customers are saying I'll take anything within reason on four wheels," Bob Carter, head of sales for Toyota Motor North America, told Automotive News last month. "Those discussions are just starting to open up, but clearly we're not in a position to make further commitments until we have further input into our supply chain outlook." For the full story, click here (source: Automotive News).
Chairman's Blog: When It Comes to White House Photo Ops, Our Brands Don’t Make the Cut
In his most recent blog post, AIADA Chairman Steve Gates writes that President Biden’s ambitious (but non-binding) pledge to ensure 40-50 percent of all auto sales in 2030 are zero emission vehicles is a big and bold plan. But is it feasible? Unless the Biden administration can accept that a few preferred automakers aren’t going to accomplish this goal on their own, his plan is doomed. Biden appears to have zero interest in working collaboratively with non-union manufacturers, no matter how many good-paying American jobs they generate or how critical they are to achieving his zero-emissions vision. He needs to update his political playbook, and look around at the reality of U.S. auto manufacturing today. If we want to create a bold new electric future for autos, the Biden administration needs to stop living in the past. America’s international nameplate manufacturers aren’t unionizing and they’re not going anywhere. Get used to it and work with us, or good luck achieving that (non-binding) EV pledge on your own. For more from Steve, click here (source: AIADA).
Sales of Hybrid Cars are Surging. That’s a Good Sign for the Future of Electric Vehicles, Experts Say
Like most car dealerships during the pandemic, Hudson Hyundai in New Jersey is selling nearly any vehicle it can acquire. But some models move faster than others. “The hybrids really go first,” sales agent Alicia Mandona told the Washington Post. “I have at least three customers waiting.” Hybrid sales have been growing faster than those of electric vehicles for the past two years — and many experts say that consumers’ apparent willingness to make the switch to hybrids, which has coincided with more popular models becoming available, could be a promising sign for an eventual shift toward electric vehicles. Conversely, there are those who think that fuel-efficient hybrids could make electric vehicles a harder choice for consumers. Christie Schweinsberg, an electrification analyst at Wards Intelligence, says that although additional models should spur growth in electric-vehicle sales in coming years, customers may keep asking themselves, “Why do I need a Tesla Model Y if I can get 50 miles a gallon in a RAV4 hybrid?” For more on hybrid sales, click here (Source: Washington Post).
Used Car Prices to Stay High Until Automakers Can Fix Production Issues
Semiconductor chip shortages have led automakers including Ford and General Motors to cut production of vehicles this year. The shortage of new vehicles has added pricing pressure in the used car market. Carvana CEO Ernie Garcia tells CNBC those prices will not start to fall until manufacturers can figure out their supply chain issues. The average transaction price for a used car was $25,410 in the second quarter of 2021, up 21 percent year-over-year, the highest average price for a pre-owned vehicle that Edmunds has ever tracked. ″[Used car sales] volume is pretty consistent with 2019, it hasn’t changed that much — what’s materially different is just that there are so many fewer new cars being manufactured and that’s pushing prices up.” Ernie Garcia, Carvana chief executive officer, said on CNBC’s “Squawk Box” on Friday. “I think until the supply chains at the [original equipment manufacturers] get figured out there’s likely to be some lasting impact.” For more on the outlook for used pricing, click here (source:CNBC).
Will Nissan Introduce an Electric Compact Pickup?
As Nissan simultaneously works to electrify its product portfolio and figure out how to re-spark its truck strategy, the Japanese automaker could be exploring a product to do both: a small, lightweight electric pickup for the U.S. According to Automotive News, Nissan is studying a new model that would slot below its Frontier midsize pickup. Small pickups are suddenly an industry white space. The nascent compact pickup segment so far consists of the upcoming Ford Maverick and just-launched Hyundai Santa Cruz, but it is forecast to grow to about 99,000 units in 2023, according to IHS Markit data. A compact pickup would reposition Nissan in a segment that consumers expect the brand to play in, given its historical success with the Frontier, said Tyson Jominy, vice president for data and analytics at J.D. Power. "It's a good pivot for Nissan to offer a pickup in a segment where competitors aren't there en masse yet," Jominy said. For more on Nissan’s next move, click here (source: Automotive News).
