Dealers Are Selling Cars So Fast They Don't Need to Borrow
Here’s another way to play the global chip shortage: Auto lenders. According to The Wall Street Journal, the supply-chain woes that have stymied car makers have also been an accelerant for used-car prices as buyers scramble to find vehicles—and, in turn, for auto lenders. Banks are relatively bigger players in used-car loans than new-car loans. Used-car loans generally have higher yields. And car loans get a further boost because any defaulted debts have better recovery values due to higher values for the collateral. The wonky supply chain isn’t all good news for banks. Dealers typically borrow to finance their floor inventory. So when they can’t get cars, and the cars they do get immediately zoom off the lot, that hurts banks’ loan growth. Still, there is an upside to that: When supply picks up and puts pressure on used-car prices, for banks there may be an offset in the form of faster dealer floor-plan loan growth. Read more here (Source: The Wall Street Journal).
Mercedes-Benz USA Names New VP for Customer Service
Dianna du Preez, a more than 30-year Daimler veteran, has been appointed vice president of customer services at Mercedes-Benz USA, reports Automotive News. Du Preez, 55, replaces Christian Treiber, who is leaving after 28 years at Daimler. Du Preez takes over May 1. It's the latest change in management in Mercedes-Benz's second-biggest market. Mercedes' U.S. business is on its second CEO since 2019. Dimitris Psillakis took over as CEO on Jan. 1 after previous chief Nicholas Speeks left the company after less than a year in the top job. In her new role, du Preez will oversee customer service operations, engineering services, after-sales business development and parts logistics, Mercedes-Benz Academy and MBUSA's customer assistance center. Du Preez will report to Psillakis. "Dianna is a proven leader whose broad experience and steadfast focus to advance our customer experience will continue to be a great asset for our company," Psillakis said in a statement. Read more here (Source: Automotive News).
Biden Plans to Cut Emissions at Least in Half by 2030
The Washington Post reports that President Biden this week will pledge to slash U.S. greenhouse gas emissions at least in half by the end of the decade, according to two people briefed on the plan, as part of an aggressive push to combat climate change at home and persuade other major economies around the world to follow suit. The move comes as Biden convenes a virtual summit of more than three dozen world leaders Thursday, aimed at ratcheting up international climate ambitions and reestablishing the United States as a leader in the effort to slow the planet’s warming. The planned U.S. pledge represents a near-doubling of the target that the nation committed to under the 2015 Paris climate agreement, when Barack Obama vowed to cut emissions by 26 to 28 percent compared with 2005 levels. The administration is likely to first offer broad strokes rather than a detailed breakdown of how it will meet the more ambitious target, according to the people briefed on the matter. Officials are considering a target range, they added, that could go above 50 percent at the higher end. Read more here (Source: The Washington Post).
12 U.S. States Urge Biden to Back Phasing Out Gas-Powered Vehicle Sales by 2035
The governors of a dozen U.S. states including California, New York, Massachusetts, and North Carolina called on President Joe Biden on Wednesday to back ending sales of new gasoline-powered vehicles by 2035, a dramatic shift away from fossil fuels. According to Reuters, Biden's $2.3 trillion infrastructure plan calls for $174 billion in spending and tax credits to boost electric vehicles (EVs) and charging networks but does not call for phasing out gasoline-powered passenger vehicles. In a letter that was seen by Reuters, the governors, which also include those of Connecticut, Hawaii, Maine, New Jersey, New Mexico, Oregon, Washington State, and Rhode Island, urged Biden to set standards "to ensure that all new passenger cars and light-duty trucks sold are zero-emission no later than 2035 with significant milestones along the way to monitor progress." Read more here (Source: Reuters).
Here's Why Car Prices Are at Record Highs
Car dealer lots have only a fraction of the vehicles that they typically have – both new and used. It's helping send prices to record levels, reports CNN. The average new car price was $37,200 in the first quarter, according to JD Power, up 8.4% from the same period just a year ago. About half of car buyers are paying within 5% of the sticker price, according to JD Power stats, with some even paying above sticker. About two million more car buyers this year will end up paying that close to sticker price than a couple of years ago. Wholesale prices for used cars sold at auction are up 26% since the start of this year, according to other data from JD Power. Retail used car prices are up a more modest 7% in the same period. That's also a significant jump for this time of year, and the higher wholesale prices are pointing to bigger increases on the way. "That puts wholesale used prices at the highest level they've ever been," said David Paris of JD Power. "And we are seeing used retail prices accelerating rapidly." Read more here (Source: CNN).
Around the Web
Baja Snake: Great Wall Motor Unveils Tuned Cannon Pickup [MotorAuthority]
Mercedes-Benz T-Class: A First Look at the New Small Family Van [Autoblog]
These 5 Cars Were Named Best in the World in 2021 [Gear Patrol]
Volkswagen Lands Honors as World Car of the Year [The Detroit Bureau]
