Once again, we are back with Testimonial Tuesday using cutting video technology provided by Formatic Video powered by OneDay.
This month’s Testimonial is from John Luciano, AIADA Board member and owner of Street Volkswagen. John discusses how CarFax has been an asset to his business and has helped him save money. He has been using them since they 80’s when they really were a fax service! Click here to watch John’s Testimonial.
Subprime Shrinks, Delinquencies Rise
In today’s high-price, rising interest rate environment, the subprime share of auto loan originations continues to shrink and delinquencies among younger borrowers are on the rise, researchers for the New York Federal Reserve Bank say in their first-quarter Report on Household Debt and Credit. Over time, those trends could have a more significant impact on brands and dealers with a higher share of buyers with low credit scores, according to a separate Cox Automotive analysis. For example, new-vehicle loans for Nissan, Ram, Volkswagen, and Chevrolet carried above-average annual percentage rates as of January 2023, a likely sign those brands cater to a higher share of borrowers with lower credit scores, Cox says. Brands with lower average credit scores “might be more vulnerable” in the event of a severe recession, Charlie Chesbrough, senior economist for Atlanta-based Cox Automotive, says in a webinar. Wards reports, delinquencies were trending downward when new and used-vehicle inventories were lower. With customers waiting in line, automakers and lenders didn’t have to cut prices to gain volume. The share of borrowers with high credit score increased. Click here for the full story.
Polestar Calls for Partnerships to Accelerate Transition to EVs
Electric vehicle maker Polestar founded by Volvo and Zhejiang Geely Holding Group is open to partnerships to tackle the challenges of decarbonizing the supply chain, its chief operating officer said on Tuesday. "If we align with partners and say this is how we decarbonize the supply chain... we can make an impact... we would like to team up," Dennis Nobelius said, speaking at the Reuters Automotive Conference in Munich. Polestar, whose cars are produced by Volvo, lowered its 2023 production guidance last week and said it would cut headcount by 10% amid a challenging environment for the industry. The car maker and Rivian, a competing EV maker, were backers of a study that said in February that the automotive industry was set to overshoot the 1.5-degree Celsius pathway by at least 75 percent by 2050, calling for collaboration to accelerate the transition to EVs. Car makers, partners and suppliers need to pool efforts on everything from traceability in the supply chain to greening the grid and tracking battery health to create cross-industry standards, Nobelius said on Tuesday. Click here for the full story.
$100 Million Toyota Investment Funds Progress on Robotics and Controls
Toyota Research Institute said its partnership with top U.S. universities has resulted in developments in advanced robotic capabilities, fuel cell catalyst durability and computational governance. The program has funded $100 million of R&D and yielded more than 1,200 research papers, including several winners of academic awards, Toyota said in a statement Monday. Automotive News reports, it began in 2016 and expanded last year to include 21 university partners and 61 projects. Each university partner teams up with a Toyota researcher on a specific line of inquiry, working on solutions specific to parent company Toyota Motor Corp. and for the industry. Columbia University's Artificial Intelligence and Robotics Lab has developed new robotic capabilities designed to handle nonrigid objects that can fold, bend and change shape. These robots can fold laundry and manipulate flexible bags, dynamic tasks with implications for vehicle development. "The partnership has allowed us to leverage industry-level resources, which have been critical in driving our research forward," Shuran Song, assistant professor of computer science at Columbia, said in a statement. An award-winning algorithm for complex, repeatable tasks was developed by Song's team. Click here for the full story.
Average Transaction Prices Fall Below Average MSRP in the U.S. Market
The average transaction price (ATP) for new vehicles sold in the United States in April fell slightly from March and for the second consecutive month, it remains below the average MSRP. Data from Kelley Blue Book reveals that the ATP of new vehicles sold in the U.S. last month fell 0.03 percent from March to $48,275. While only a small decrease, figures from March and April represent a reversal from the previous 20 months where new vehicle ATPs were holding above the average MSRP. The ATP in April was $378 below the average sticker price whereas in April 2022, it was $600 above sticker, representing a piece of good news for those shopping for a new car, reports Carscoops. Kelley Blue Book’s data reveals that the ATP for non-luxury vehicles last month was $44,750. This is a $461 increase from March 2023 and a 5.2 percent increase year-over-year but remained $381 below the average MSRP. It was a different story for luxury vehicle buyers where the ATP dropped by $1,605 from March 2023 to $64,144 last month. This is also the first time the ATP for luxury vehicles dropped below $65,000 in 11 months. Click here for the full story.
Around the Web
End of a Love Affair: AM Radio is Being Removed from Many Cars [The Washington Post]
Small Cars Aren’t as Safe as You Think [The Detroit Bureau]
Hyundai’s EVs and Flying Cars will Take Spider-Man Across the Spider-Verse [Carscoops]
