Falling Used Car Prices May Signal Upcoming Relief for Buyers

First Up 01/19/23

Falling Used Car Prices May Signal Upcoming Relief for Buyers

Used car prices have started to fall after experiencing a meteoric rise in the wake of the pandemic, according to a recent study. The price of the average used car fell by two percent in November 2022 and dropped again by three percent in December 2022, though some models bucked this trend. "We're still a long way from 'normal' but there are clear signs the elevated prices of the past two-plus years are coming to an end," said iSeeCars executive analyst Karl Brauer. "It was easy to predict given the macroeconomic factors we’ve seen over the past six months."  Autoblog reports, the average used car cost $31,823 in November 2022 and $33,582 in December 2022. Tesla's Model 3 earned the dubious distinction of being the biggest loser: the average cost of a used example fell by $8,822 to $43,817 between September and December 2022. The Nissan Kicks and the Ford Mustang fell by 11.9 percent and 11.5 percent to $20,046 and $26,852. That doesn't mean you're about to get a good deal, though. These models are outliers, and the industry average dropped by merely 0.6 percent from September to December 2022. Click here for the full story.

Cox Automotive Issues Low Sales Forecast

Cox Automotive issues a low-ball 2023 forecast of 14.1 million U.S. light-vehicle sales. That’s not much improvement vs. 13.8 million in 2022. Cox blames the conservative outlook on the unsettled U.S. economy that some fear could slip into a recession. With that possibility looming, automakers are unlikely to overbuild inventory this year and overspend on incentives, the company says. “Our collective assumption is that manufacturers will be conservative,” says Jonathan Smoke, Cox Automotive’s chief economist. “They would rather sell 13 million profitably than 15 million at a substantial discount.” The 2023 forecast could be too low if automakers with a higher-than-average days’ supply “break ranks” and start price wars, reports Wards. Cox Automotive’s Smoke says dealers report that consumers are feeling the economic pinch of higher interest rates and inflation. “Recession risk is real, and dealers are feeling it. The pressure to lower prices is growing for all,” Smoke says. He’s concerned that with currently high profits per vehicle, the auto industry isn’t sufficiently alarmed about the economy. Click here for the full story.

EV Mineral Companies Get Tail Wind from Biden Administration

The transition from gasoline to electric vehicles mainly depends on the supply chain for batteries and their materials. Domestic shortages of lithium and other critical minerals have plagued U.S. auto manufacturers trying to keep up with EV demand, which is growing at a steep 30 percent annually, reports Automotive News. The largest shortfall is domestic lithium production. Australia accounts for half of the 100,000 tons of lithium produced globally, according to the World Economic Forum. Chile and China are next. The U.S. lags far behind, producing fewer than 1,000 tons of lithium annually. The same is true for other critical minerals used in batteries. The U.S. has relied on countries like Russia and the Democratic Republic of Congo, while U.S. mining has stagnated. As the U.S. EV market expands, the federal government and industry players are looking to build out a domestic mineral supply chain. The feds have accelerated production plans with generous incentives. The 2021 Infrastructure Law earmarked more than $7 billion to strengthen the U.S. battery supply chain, including $400 million for grants to develop domestic critical mineral supplies. Click here for the full story.

Boost Committee Turns Ideas into Solutions

Faulkner Subaru Harrisburg's boost committee is an extension of the company's open-door policy where all ideas are welcome. "We use it to boost anything from profits to inclusion and diversity to brainstorming to come up with new ideas," said Doug Jones, general manager of the Pennsylvania dealership. Committee members meet monthly — two each from every department including sales, parts, finance, management, and business development. Membership rotates among employees at the dealership, which is one of 30 locations owned by the Faulkner Organization, reports Automotive News. Store leaders launched the committee in 2020 after recognizing that the best ideas come from frontline employees, Jones said, who often know their department's workflow best. The boost committee has solved both small issues, such as car wash wait times, and larger challenges, such as dealership parking problems, Jones said. The ideas generated by the committee have saved work time, improved customer, and employee satisfaction, and built strong workplace relationships, he said.

Click here to learn about some of the solutions implemented.


BMW Invents Color-Changing Headlight Lenses That Hide in the Grille

BMW has invented a new front fascia that integrates the headlights into the grille surface behind one seamless panel, with active lenses that can change shade to allow light to be visible through. Current BMW grille designs are already polarizing fan opinions, but the stylists seem to think there's room for even more extreme future front-end designs. A new patent unearthed by CarBuzz and filed with the World Intellectual Property Organization (WIPO) showcases BMW's new one-piece "mask" to replace the traditional grille as we know it, presumably for its next generation of electric cars like the next-gen BMW i7. Instead of having a grille and headlights as separate units, the entire front end of the car is covered by a single, smooth panel. From behind this, various LED DRL patterns can be shown, and the portion of the lens ahead of the headlights can be switched from opaque to transparent. EVs don't need the air intakes that internal combustion engine vehicles do, and the kidney grille inserts on the i7, iX, and i4 are purely for decorative purposes to retain brand identity. Click here to learn more about the color-changing headlight lenses.

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