Fed Leaves Interest Rates Unchanged; Dealers Say Rate Cuts Needed on Auto Loans
The Federal Reserve on Jan. 29 announced no changes to the central bank’s benchmark interest rate policy after its first Federal Open Market Committee meeting of 2025. The federal funds rate target range will remain at 4.25 to 4.5 percent, where it has stood since a quarter-point cut in December, the Federal Open Market Committee said Jan. 29.According to Automotive News, investors expected the Fed to leave its benchmark rate alone this month as U.S. inflation had remained higher than the central bank’s goal of 2 percent. The Bureau of Economic Analysis reported prices in the Personal Consumption Expenditures Price Index, the Fed’s key metric for inflation, were up 2.4 percent in November, the latest month with data available. “The Committee judges that the risks to achieving its employment and inflation goals are roughly in balance,” the Fed said in a statement. “The economic outlook is uncertain, and the Committee is attentive to the risks to both sides of its dual mandate.” Click here for the full story.
Toyota Sells 10.8 Million Vehicles in 2024 to Remain World’s Top-Selling Automaker
Toyota Motor sold 10.8 million vehicles in 2024, it said on Thursday, remaining the world’s top-selling automaker for a fifth straight year. The Japanese automaker posted a 3.7 percent drop in global group unit sales last year, including those of compact car maker Daihatsu and truck unit Hino, reports Reuters.The decline was largely due to a steep slump in sales in Japan where the automaker faced fallout from governance issues over certification test procedures, especially at Daihatsu. Second-ranked German rival Volkswagen Group earlier this month reported a 2.3 percent decline in unit sales last year to just over 9 million vehicles, as it seeks to cut costs at home and fight a price war in key market China. Sales of Toyota’s parent-only vehicles, which include those of its namesake and Lexus brands, fell 1.4 percent from a year earlier in 2024 to 10.2 million vehicles due to a double-digit decline in Japan. While Toyota sold a record number of cars overall, thanks in part due to demand for its hybrid vehicles in the United States, it saw unit sales in China decline by 6.9 percent amid heavy price competition in the world’s top car market. Click here for the full story.
Execs Rank Auto Industry ‘Most Disrupted’ in New Survey
China’s ascendance. Supply chain uncertainty. Artificial intelligence advances. Government policy swings. Those seismic forces have combined to provide the global auto industry with a dubious distinction. It is perceived as the “most disrupted” industry across the economic landscape, according to a new AlixPartners survey of business executives.It marks the first time in the six-year history of the consulting firm’s annual disruption index that automotive has risen to the top of the list, reports Automotive News. The industry scored a 76.7 on the firm’s 100-point scale, a 4.7 point jump from last year. Automotive eclipsed media and entertainment for the top spot. Four in 10 executives from automakers, suppliers and dealers expect their business model will change in the year ahead because of disruptive forces, the survey found. “There’s such a monumental change in how business is being done,” Stephen Tapley, AlixPartners’ lead in its automotive industrial practice, told Automotive News. That’s reflected in the survey results, with overall disruption rising across all 10 surveyed industries for the first time in three years. Click here for the full story.
Rollercoaster Ride of Used-Car Values May Be Leveling Out
Dealers seeking affordable used vehicles for resale have good news and bad news in the latest Manheim Used Vehicle Value Index report. According to Wards, the report includes wholesale auction values for December, a review for full-year 2024 and a 2025 forecast for a small increase in wholesale values. The good news is that wholesale auction values are down from recent peaks. The bad news is, Manheim data suggest the current decline in used values may be ending – finding a “floor” for the time being at a higher level than the pre-pandemic, historical norm. The beginning of 2025 marks “the end of the used-vehicle price correction,” says Jonathan Smoke, chief economist for Cox Automotive, the parent company of Manheim. For December 2024, the Manheim Used Vehicle Value Index was 204.8, down just 0.3 percent from November, and up just 0.4 percent vs. December 2023. That’s the second month in a row the index was higher than the same month a year ago, but just barely, Manheim says. Click here for the full story.
U.S. Transportation Secretary Sean Duffy Moves to Reconsider Fuel Economy Standards
Newly appointed U.S. Transportation Secretary Sean Duffy has moved swiftly to reverse key fuel economy policies set under the Biden administration. Within hours of being sworn in, Duffy issued a memorandum directing the National Highway Traffic Safety Administration (NHTSA) to reset Corporate Average Fuel Economy (CAFE) standards, rolling back regulations that aimed to reduce fuel consumption for cars and trucks. His immediate action signals a significant shift in federal policy under the Trump administration, favoring a more market-driven approach to vehicle efficiency. According to CBT News, the CAFE standards in question were finalized in June 2023, setting stricter fuel efficiency mandates for automakers. Under these regulations, light-duty vehicle efficiency was slated to increase from 39.1 miles per gallon (mpg) to 50.4 mpg by 2031. Additional rules extended to heavy-duty pickups and vans through 2035. While federal law requires NHTSA to establish fuel economy standards at the highest feasible level, the agency’s prior ruling placed increased pressure on automakers to phase out internal combustion engine (ICE) models in favor of electric and hybrid alternatives. Click here for the full story.
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The Most and Least Expensive States to Own a Car in 2025 [Autoblog]
Study finds EVs Now Match ICE Cars in Lifespan [CBT News]
Porsche and Audi Plan U.S. Production to Avoid Tariffs, Audi May Get Spinoff Scout SUV [Carscoops]