Pandemic Sharpens Split Between Have and Have-Not Car Buyers

First Up 01/06/21

End of Year Auto Sales Pick Up Due to Pickups

Sales of new vehicles increased in December as year-end promotions drew customers into showrooms; however, full-year sales results fell double digits under the weight of the COVID-19 pandemic that closed down the car business last spring. The Detroit Bureau reports that with the help of a heavy-duty marketing blitz last month, Toyota Motor North America reported sales of 249,601 vehicles in December, an increase of 20.4% on a volume basis and up 7.5% on a daily selling rate basis compared to December 2019. American Honda reported a 3.6% sales increase of Acura and Honda vehicles in December. For the fourth quarter, however, sales dropped 5.9%, which was in line with its decline for the full year. Mazda also reported a sales increase for December of 18.2% compared to December 2019. Full year sales in 2020 totaled 279,076 vehicles sold, an increase of 0.2% compared to 2019. Read more here (Source: The Detroit Bureau). 

Pandemic Sharpens Split Between Have and Have-Not Car Buyers

Pandemic lockdowns have cost millions of low-income Americans their jobs, while white-collar types who work from home are flush with cash they can’t spend on dining or travel. Instead, reports Bloomberg, many of them are buying expensive cars. High-end trucks and sport utility vehicles are flying off dealer lots, but sales of entry-level compact cars and crossovers remain depressed. General Motors Co.’s premium people haulers like the Chevrolet Tahoe and GMC Yukon SUVs saw deliveries rise more than 30% in the fourth quarter, but sales of the more affordable Chevy Equinox crossover sank 22%. Toyota Motor Corp.’s Lexus GX midsize SUV, which starts at $53,000 but hasn’t had a full upgrade in a decade, posted big gains, and Volkswagen AG luxury brand Porsche had its second best year in the U.S. “Those who have money are spending big on loaded SUVs and pickup trucks,” said Michelle Krebs, executive analyst for Autotrader, a unit of Cox Automotive. Read more here (Source: Bloomberg). 

GM to Build Honda EV in Mexico, Acura EV in Tenn.

General Motors plans to start building two battery-electric crossovers for Honda Motor Co. within four years: a Honda-branded vehicle at a GM plant in Mexico and an Acura-branded vehicle alongside the upcoming Cadillac Lyriq in Tennessee, according to two people familiar with the plans. Automotive News reports that production of the Honda crossover is slated to begin in 2023 in Ramos Arizpe, Mexico, where GM builds the gasoline-powered Chevrolet Blazer and Equinox, the sources said. Production of the Acura crossover is scheduled to begin in 2024 in Spring Hill, Tenn., according to the sources, who asked not to be identified discussing future product plans. The Honda and Acura models are expected to be roughly the size of the Lyriq, which is scheduled to go on sale in early 2022. Like the Lyriq, the Honda and Acura vehicles will be powered by GM's proprietary Ultium batteries, which have a maximum range of 450 miles. Read more here (Source: Automotive News). 

Kia Unveils New Brand Logo and Slogan

Kia has unveiled a new, more modern, script-like brand logo to replace its aged oval mark and help jumpstart the South Korean carmaker’s planned brand relaunch, reports Automotive News. As part of the makeover, Kia Motors Corp. has also adopted a new slogan: Movement that Inspires. The new emblem and catchphrase were both unveiled Wednesday during a pyrotechnical display in the skies above Incheon, South Korea, that used 303 drones launching fireworks. “The introduction of the new logo represents Kia’s ambitions to establish a leadership position in the future mobility industry by revamping nearly all facets of its business,” Kia said in a release.  The reworked logo and fresh tagline will herald an updated business strategy that Kia CEO Ho Sung Song plans to unveil on Jan. 15. Read more here (Source: Automotive News). 

Carmaker Bentley Posts Record 2020 Sales Thanks to China Boost

Volkswagen’s luxury British automaker Bentley posted record sales of 11,206 cars in 2020 despite the COVID-19 pandemic causing the company’s factory to close during the first lockdown in England, as demand in China soared by nearly 50%. Reuters reports the plant in northern England did not produce vehicles for seven weeks as restrictions were imposed in March and then ran at half normal output in the subsequent nine weeks, but new models helped to drive up demand overall, the carmaker said on Tuesday. Demand increased by 48% in China thanks to the popularity of the new Flying Spur, and rose by 4% in the Americas, offsetting drops in Europe and the Middle East. “As we look to the year ahead we remain cautiously optimistic as much remains uncertain,” said Chief Executive Adrian Hallmark. Sales in 2020 were 2% higher than in 2019. Read more here (Source: Reuters). 

Webinar Tomorrow: Tax Planning for an Uncertain Year End

Join the next AutoTalk webinar tomorrow, Thursday, January 7, 2021 at 2:00 p.m. EST to understand the best tax planning strategies for your business. 

Topics will include: 

  • Explore tax opportunities under CARES act

  • Updates on PPP loan taxability

  • How inventory levels could impact your taxable income

Click here to register. 

Around the Web

Almost Half of 2021 Cadillac Escalades Have Sold for Over $100K [Car and Driver

2-Part Documentary Details Chevy's Development of Mid-Engine Corvette [MotorAuthority]

Mazda MX-20 Coming to the U.S. in Electric and Rotary Forms [Autoblog]

Buffett-Backed Chinese Electric Car Company Outsells Its Startup Rivals [CNBC]