Pandemic May Not Have Changed Car Buying Habits of Consumers

First Up 01/13/21

Trump Delays Increase in Fuel Economy Penalties at Auto Industry Request

The Trump administration agreed on Tuesday to an auto industry request to delay the start of dramatically higher penalties for companies that fail to meet fuel efficiency requirements, a move that could save the industry hundreds of millions of dollars or more, reports Automotive News. The decision – announced eight days before President-elect Joe Biden takes office – follows a U.S. appeals court in August that overturned the Trump administration’s 2019 decision to suspend a regulation that more than doubled penalties for automakers failing to meet fuel efficiency requirements. Congress in 2015 ordered federal agencies to adjust civil penalties to account for inflation. In response, the National Highway Traffic Safety Administration issued rules to raise fines to $14 from $5.50 for every 0.1 mile per gallon new cars and trucks consume in excess of required standards. Automakers protested that 2016 hike, saying it could increase industry compliance costs by $1 billion annually. Read more here (Source: Automotive News). 

Pandemic May Not Have Changed Car Buying Habits of Consumers

U.S. consumers still prefer the face-to-face interaction buying a new vehicle used to require. The Detroit Bureau reports that Deloitte’s newest report, the 2021 Global Automotive Consumer Study, sheds light on what to expect in the near term: people like what’s familiar and it’s going to show up in their buying habits. Seventy-one percent of U.S. vehicle buyers prefer an “in-person sales experience,” the study revealed. This biggest part of that is 75% want to see and touch the vehicle before they buy it, with 64% needed some time behind the wheel as well. One area where U.S. consumers were happy to see handled via the internet was vehicle service. The ability to get online and have your car or SUV picked up by a dealer at home or work was appealing with 46% of respondents in favor of that type of interaction — provided it is free. The shift to online purchasing during the pandemic didn’t appear to hinder sales, although the event itself did as more than a third of U.S. consumers delayed their purchase of a vehicle. Read more here (Source: The Detroit Bureau). 

Biden Trade Policy to Center on Workers, USTR Nominee Says

President-elect Joe Biden’s trade policy will focus on helping American workers by ensuring trade agreements protect and enhance U.S. jobs—and not just ensure low prices of imported goods for consumers, his nominee for the top trade-policy job said Tuesday. The Wall Street Journal reports that Katherine Tai, in her first speech since Mr. Biden nominated her for U.S. Trade Representative, said the new administration’s policy priorities also include confronting China over its trade practices and enforcing the U.S.-Mexico-Canada Agreement signed by President Trump last year with bipartisan support. “The president-elect’s vision is to implement a worker-centered trade policy,” Ms. Tai said in a video-streamed speech to the National Foreign Trade Council, a business-advocacy group. “What it means in practice is that U.S. trade policy must benefit regular Americans, communities, and workers. And that starts with recognizing that people are not just consumers. They are also workers and wage earners.” Read more here (Source: The Wall Street Journal).  

Car Auction Company KAR Goes 100% Digital Years Ahead of Scheduled Amid Pandemic

KAR Auction Services, based near Indianapolis, made a name for itself in the business of used car auctions, reports CNBC. As last year’s pandemic lockdown turned more companies on to remote work and homebound citizens to online shopping, in April the company took its auction services digital, CEO Jim Hallett told CNBC’s Jim Cramer Tuesday. “We planned on going 100% digital over the course the next two or three years,” he said in a “Mad Money” interview. “We basically got that taken care of in the space of about two or three weeks and, quite frankly, it has exceeded our expectations.” The process to digitize the auction house began about five years ago and by 2019, three-in-five car sales that KAR facilitated came through the web, Hallett said. Read more here (Source: CNBC). 

Chip Shortage Snarls Output Worldwide

More than a year after its outbreak, the coronavirus keeps finding new ways to hit automakers. After first wiping out auto demand, the virus is now hindering parts supply: chips used in vehicles are harder to come by because semiconductor manufacturers allocated more capacity to meet soaring demand from consumer-electronics makers such as Apple Inc. Automotive News reports that the shortage risks dragging on, with lockdowns and travel restrictions prompting housebound consumers to snap up more phones, game consoles, smart TVs and laptops to get online. Lower down in importance to chipmakers, auto manufacturers risk not getting enough goods to fuel a fledgling recovery in their own industry. Toyota Motor Corp. partially halted production in China Monday before resuming Tuesday while Honda Motor Co. is reducing output at five factories across North America as it becomes harder to procure chips. Read more here (Source: Automotive News). 

Around the Web

2021 Lexus LC500 Adds a Carbon-Fiber-Rich Inspiration Series Trim [Car and Driver]

Cadillac Celestiz Flagship Sedan Teased During 2021 CES Presentation [MotorAuthority]

Cheap SUV Comparison Test [MotorTrend]

One of the World's Largest Muscle Car Museums Is Auctioning Off Its Cars [Autoblog

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