Will Leasing Rally in 2023?

First Up 01/24/23

Will Leasing Rally in 2023?

Experts are predicting that leasing will grow as a proportion of auto sales in 2023 after falling last year to what Cox Automotive said was its lowest share of the market in at least a decade. Affordability concerns and increased automaker incentive spending are expected to help drive that growth, reports Automotive News. Cox Automotive projects that leasing will represent 21 percent of new-vehicle retail sales in 2023, up from an estimated 19 percent in 2022, according to Charlie Chesbrough, the company's senior economist. Even with that expected jump, the share of customers leasing this year will still be below 2019's pre-pandemic levels when lease deals made up 30 percent of retail sales. Alex Yurchenko, chief data science officer for Black Book, also expects 2022 will mark the bottom of the industry leasing collapse brought on by the pandemic and inventory shortages. Yurchenko said Black Book projects that lease share will grow to "above 20" percent of sales in 2023, and while it's going to start increasing, lease share won't return to pre-pandemic heights anytime soon. Click here for the full story.

The Volkswagen ID.7 Might Have the World's Smartest Climate Control System

Volkswagen's ID.7 will launch with the smartest air-conditioning system in the world when it debuts in the second quarter of 2023. It may seem odd that VW invested so much into a system that has been around since 1940 and widespread since the 1970s, but one of the critical definitions of luxury is ease and comfort. Rather than reinventing air-conditioning, VW is simply making the basic system smarter and more easily accessible via the touchscreen infotainment system, reports Carbuzz. The ID.7 is obviously meant to be a competitor in the midsize luxury segment, and this new tech is one of a few luxuries VW will be boasting about until long after its official unveiling. The car will start to distribute air throughout the cabin as soon as the driver approaches with the key. This is not a new system and has been around for at least a decade. The new stuff only happens when you open the door. If it's hot outside, the intelligent air vents will make a series of sweeping horizontal movements to distribute cold air as quickly as possible around the cabin. Click here for the full story.

Kia Dealers Hope EV9 Production Will Shift to U.S.

Kia hasn't said whether production of its EV9 three-row electric vehicle will be shifted to a U.S. factory from Korea when it comes online in the fall to qualify for $7,500 in federal tax credits. But James Morrell, chairman of the Kia Dealer Advisory Council, said there's no way to deal with the new law without building the EV9 in the U.S. The private reveal of the new EV9 at last year's NADA meeting was the brand's "biggest excitement," said Morrell, who has been head of the dealer council since 2019. "It's an EV that people can get behind," Morrell told Automotive News. "It's not some wacky, small, futuristic-looking vehicle that's only going to appeal to a small niche. It's a seven-passenger SUV that's electrified so there's going be a huge demand for it." But the complex new requirements of the Inflation Reduction Act were a buzzkill on dealers' anticipation. "There's a lot of trepidation from headquarters and from the dealers on introducing a new, much more expensive EV that was priced and marketed based on the benefit of the $7,500," Morrell said. Click here for the full story.

Honda to Create Division to Speed Up Electrification Development

Honda Motor Co said it would create a new division in a bid to strengthen and speed up its electrification business as part of an overhaul of its organizational structure. The shake-up is part of the automaker's bid to catch up in the fast-growing market for full electric vehicles, led by Tesla Inc and China's BYD Co. Japanese automakers have been at risk of falling behind their European and U.S. rivals in the EV market. In changes effective April 1, the new division would consolidate the Japanese automaker's electrification strategy and development of automobiles, motorcycles, and power products such as generators, reports Reuters. The Japanese automaker also said it would combine current six regional operations to three, composed of North America, China and associated regions including Japan, the rest of Asia, and Europe. Integrating to the three was to "rapidly develop the implementation of resource shifts in accordance with the future lineup strategy in line with the electrification acceleration." The automaker anticipates its vehicle lineup in North America, and China would be mid- to large size, whereas that would be small- to mid-size in the rest of the region. Click here for the full story.

Nissan’s Investing $250M in Former Engine Plant for EVs

Nissan is expected to spend $250 million to establish an EV manufacturing hub at its Decherd, Tenn. factory, bringing the company’s U.S. investment in electrification to $750 million.  While the CEO didn’t reveal any further details on what the automaker plans to produce at the facility, the outlay comes as demand is increasing faster than the company expected, even though the company was an early entrant in the EV market, with the Nissan Leaf having been introduced in 2010. But the company never took advantage of its early lead in the segment, surrendering it to other manufacturers. One suspects Nissan’s new U.S. investment is likely a result of the federal government’s new $7,500 tax credit for EVs in the Inflation Reduction Act. The Detroit Bureau reports, Nissan is projecting that 40 percent of its U.S. sales volume will come from EVs by 2030. Some of that will come from its Canton, Miss. plant, which is slated to manufacture an EV for Nissan and Infiniti in 2025. Currently, a paltry 1.4 percent of Nissan’s North American volume comes from pure EVs. Click here for the full story.

AIADA Affinity Partner Happenings at 2023 NADA Convention

AIADA's Member Benefits Program is one of the most valuable services AIADA provides to its members. AIADA partners with best-in-class companies to provide members with exclusive values on the goods and services they need to succeed in a competitive business environment. While you're in Dallas, make sure to check out AIADA's Affinity Partners. Click here for a quick reference guide on where to find them at NADA 2023!

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