Chips' Sales Grip May Only Slightly Ease in '22
The global microchip shortage that crimped new-vehicle output last year will continue to pinch volumes in 2022. Even as production schedules improve, inventory is expected to remain tight for much of the coming year after plunging in 2021 to the lowest level since the Great Recession. Once inventory and production normalize, forecasters expect pent-up demand to propel the industry for the next few years. "It's not greatly different than we saw out of the Great Recession and how many years that carried us," Tyson Jominy, vice president of data and analytics at J.D. Power, told Automotive News. "I think [demand] is stronger by several magnitudes than what we saw even back in 2010 through '13." IHS Markit expects U.S. sales will rise to nearly 15.5 million vehicles in 2022, while Edmunds estimates a more modest 15.2 million. The average transaction price for new vehicles rose to $44,427 as of mid-December, up 17 percent from a year earlier, J.D. Power said. For the full story, click here.
Hyundai, Kia Expect Auto Sales Jump in 2022 Amid Chip Shortage
Hyundai Motor Co and affiliate Kia Corp on Monday forecast that their combined global sales will jump 12.1 percent in 2022, even as last year's sales fell short of target due to a global chip shortage. According to Reuters, the companies sold 6.67 million vehicles in 2021, about 3.7 percent less than their combined target of 6.92 million vehicles, largely due to supply problems including the chip shortage, which drove down vehicle shipment. "In 2022, Hyundai Motor plans to expand its market share and strengthen profitability through efforts to stabilize chip supply and demand, adjust vehicle production schedules, strengthen electric vehicle lineups as well as optimizing sales profit and loss by region," Hyundai Motor said in a statement. Lee Jae-il, an analyst at Eugene Investment & Securities, expected demand for vehicles to stay strong in 2022. "It appears that the chip shortage has been showing some signs of easing ... however, rising raw material prices would likely have (an) impact on their profitability," Lee added. For more on Hyundai and Kia’s outlook, click here.
Mercedes Says its Electric Concept has 620 Miles of Range and Seats Made with Mushrooms
Mercedes has unveiled a new all-electric concept car, the EQXX, that the company claims can go 620 miles on a single charge. The futuristic luxury car is also made with a host of innovative recycled and sustainable materials including mushroom fibers, ground up cacti and trash such as food scraps. Click here to see it. According to CNN, Mercedes' range claim for this concept vehicle is based on computer simulated testing, not actual driving. If the claim is accurate, though, the EQXX would be able to drive farther on a single charge than a Toyota Prius hybrid can travel on a full tank of gas. It's also much farther than any other electric car currently available in the United States, according to the EPA. Mercedes plans to demonstrate the car's range in an actual driving test this spring, the company said. Mercedes has said it intends for half its sales to be electric cars by 2025 and, by 2030, for the brand to be virtually "ready to go all electric." For more on the EQXX, and Mercedes’ electric plans, click here.
Room to Grow: Why More SUVs, Crossovers Are Getting Useful Third Rows
After years of boasts over the expanding size of their infotainment screens, automakers seem to have collectively moved on to a new measuring contest with which to extol their own virtues: third-row real estate. According to Automotive News, across the industry, there's now a growing list of growing crossovers and SUVs — vehicles that either had three rows and are now adding inches specifically for their third-row seating, or long-standing two-row vehicles that are growing to seven-seaters from five. Like most things in the industry, the reason comes down to money: Consumer demand for three-row vehicles is increasing overall, and, according to executives from several automakers, adding more legroom to third-row seats is among the best ways an automaker can make some extra money with little extra investment. The list of automakers that either have added, are adding or will add space to their three-row SUVs or crossovers is extensive and growing. Click here for some examples.
Car Shortage Could Change Buying Behavior Forever
Car dealers' annual year-end sell-a-thons have turned into wait-a-thons for many shoppers unable to find the vehicle they want on dealer lots — but that could be about to change as some companies modernize the way they sell their cars. According to Axios, supply chain disruptions could have a silver lining for automakers if Americans can be trained to order the exact car they want — color, features, bells and whistles — and then wait a month or so for it to be delivered. But Americans are accustomed to going to the dealership and driving home in a shiny new car off the lot. What's happening: Some companies say they plan to capitalize on the inventory crunch to permanently shift to an order-based system, starting with their new lineups of electric vehicles. "You cannot imagine ... how much money we waste by not -- by guessing what our launch mix is for a new product," Ford CEO Jim Farley told investors and analysts in October. For more on how buyer behavior may be poised to change, and how it could impact dealers, click here.
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