Despite record-high wholesale prices and limited supply, used-car sales continued to gain traction in May. Cox Automotive said in a Data Point report last week that there was a 3% year-over-year hike in used-car sales last month. The total used-vehicle SAAR was an estimated 41.0 million in May, steady with April and up from 39.9 million in May 2020, Cox said. Looking at sales specific to dealerships (and taking private-party sales out of the equation), Cox said the retail SAAR for used-car was an estimated 22.4 million in May, again steady with April.
Source: Auto Remarketing
Destination charges have been rising industry wide. No one knows why. Automakers are aware of it as well. It’s why they advertise vehicle MSRP’s without them. And the charges vary between vehicles and make no sense. A basic Cadillac CT4 has a $1,195 destination charge while a CT4-V Blackwing has a $995 destination charge. Could it be greed? Apparently, some customers think so, as Car Complaints and GM Authority report a class action suit has been filed against GM over the charges.
Destination fees generally range from $995 to about $1,700 and vary model by model, as TrueCar notes, but don’t vary depending on the distance. For example, a destination fee for a buyer living near the BMW plant in Spartanburg, South Carolina would be the same as a buyer of the same model two thousand miles away. Automakers claim they don’t make a profit.
In this suit, however, filed in the Southern District of California, the plaintiffs have alleged that GM makes a profit off of the charges and that GM “deceives customers into paying far more than the actual cost of vehicle delivery.” All of this is over a grand or two; California plaintiff Robert Romoff paid a $1,195 destination charge on a 2021 Chevy Equinox and New Jersey plaintiff Joe Siciliano paid a $995 destination charge on a 2019 Cadillac Escalade. Car Complaints quotes the suit:
“[A] destination fee is generally understood in the automotive industry to reflect the manufacturer’s average cost of delivering one of its vehicles to a dealership. That destination fee is charged to the dealer and passed on to the purchaser or lessee of that vehicle. Consumers similarly have the expectation that they are covering an automotive manufacturer’s cost for the delivery of the manufacturer’s vehicles when paying the “destination fee” as part of their new-vehicle lease or purchase.”
Both plaintiffs claim they did not know that GM makes a profit from its destination charges, and argue they were misled. The suit essentially claims destination charges are bullshit and have little to do with anything involving the transportation of the vehicle. GM hasn’t responded to the suit. But the fact that charges are the same for a person living 30 miles from the factory being the same for someone living on the other side of the country suggests it’s all profits for automakers.
Carmakers’ new-vehicle inventory has dropped to a record low in the U.S. as the global chip shortage hampers efforts to keep up with voracious auto demand. Inventory on dealer lots stood at just 23 days’ supply at the end of May, down from 33 days a month earlier, JPMorgan analysts led by Ryan Brinkman wrote in a report Thursday. The industry norm is around 60 days. At $38,225, the average price of new vehicles set another all-time monthly high, Brinkman wrote. He expects cars to keep getting costlier as supply-starved automakers slash sales incentives until semiconductor availability improves.
Ford Motor Co. surpassed a significant milestone in its conversion to electric vehicles, producing more battery-powered Mustangs so far this year than gasoline-fueled versions of its iconic pony car. Ford has built 27,816 electric Mustang Mach-E models at a plant in Mexico this year compared to 26,089 copies of the traditional internal combustion engine Mustang at a factory in Michigan, according to production data the automaker released Thursday.
Nissan Motor Co. is pushing back the release of its flagship Ariya electric vehicle, highlighting the struggle automakers everywhere are facing in trying to launch new cars amid a persisting shortage of semiconductors. When the Ariya SUV was first unveiled in July last year, Nissan said it was scheduled to go on sale in mid-2021. On Friday, the company said a limited-edition model will be available in Japan “this winter” followed by a wider domestic and global roll-out.
General Motors will use its working agreement with Honda to help maintain the internal-combustion-engine side of the business as it transitions to an all-electric future by the middle of the next decade, GM Chairman and CEO Mary Barra says. Barra also says during a virtual event with analysts from Credit Suisse that GM is preparing to increase its investment in battery-electric vehicles. The transition to EVs will require a higher level of service at the dealership and through the purchase experience, and GM has great dealers, Barra says. “We see our dealers as a huge asset,” she says, noting the shift to EVs will require greater emphasis on customer relations.
General Motors and Volvo are eyeing changes to their distribution models as they move into the electric vehicle era that would give them a larger role in managing dealerships' inventory. The plans would help dealers avoid paying to carry a big selection of EVs before demand for them takes off, but some fear the long-term consequences of an automaker-controlled inventory pool. They're a sign that the industry's rapid push into electrification may have implications that go beyond fuel consumption and emissions, by altering some of the long-accepted fundamentals of how franchised dealerships operate.
Source: Automotive News
The startup has been planning an electric pickup, the Endurance, but said in regulatory filings today that it doesn't have the money to start production.
Lordstown Motors, an EV startup based in an Ohio town of the same name, doesn't have enough money to start building trucks by the end of the year as previously promised. That revelation came in a regulatory filing on Tuesday and was first reported by the Wall Street Journal. Lordstown's inability to start production on its first product raises serious questions about the viability of the company and how long it can continue operating.
Lordstown had originally promised that it would start building its Endurance pickup truck, with a promised 600 horsepower and roughly 250 miles of range, early this year. Fleet customers were supposed to get first dibs at the trucks, and Lordstown said private customers could expect delivery by the end of the year. However, by this spring it was clear production had never begun. The Endurance was unveiled last summer with then Vice President Mike Pence in attendance.
This isn't the first we've heard of trouble at the startup. It was the subject in March of a report from investment research firm Hindenburg Research, which said the company had misled investors and may have been lying about pre-orders for its truck (the company says it has 100,000 pre-orders from fleet customers). Also in March, the Lordstown confirmed it was the subject of a Securities and Exchange Commission investigation.
Even without its apparently serious financial problems, Lordstown was facing new and stiff competition on the EV pickup front. Ford unveiled an EV version of its bestselling F-150 last month and claims to have raked in tens of thousands of pre-orders in the first days after the reveal.
We'll update this page as we learn more about Lordstown's future.
Source: Car and Driver
The man who helped the iPhone sense when it’s been tilted sideways is taking over as CEO of Ferrari NV, highlighting the growing dominance of technology in the auto industry that’s witnessing its most profound transformation in more than a century. The iconic Italian supercar maker announced Wednesday that it recruited Benedetto Vigna, 52, from chipmaker STMicroelectronics NV to become chief executive officer starting Sept. 1. The appointment is a watershed moment for incumbent carmakers that have rarely looked outside the sector and haven’t named tech leaders to their top job.
May was the fourth straight record month for the Manheim Used Vehicle Value Index, which hit the 200 mark for the first time ever, spokespeople with parent company Cox Automotive confirmed. The index reading for May was 203.0, which beat year-ago figures by 48.2%. Adjusting for mix, mileage and seasonality, there was a 4.65% lift in wholesale prices from April, Manheim said. In addition to the aforementioned 48.2% overall year-over-year gain in wholesale prices, Manheim shared how various market classes performed. The most notable change was for pickup trucks, whose prices soared 70% from May 2020.
Source: Auto Remarketing
With Corvette Racing returning to this weekend's Detroit Grand Prix after 13 years away, Chevrolet is debuting a 2022 Corvette Stingray IMSA GTLM Championship Edition. Chevrolet will only release 1,000 of these special edition Corvettes, which resemble the No. 3 and No. 4 Corvette C8.R race cars. They were designed to celebrate the mid-engine Corvette's C8.R's inaugural 2020 season, when Corvette Racing swept the IMSA's sports car championship series with six wins and seven pole positions.
Source: The Detroit News
BMW expands its electric lineup with new gran coupe and sports activity vehicle models, with just enough naming nomenclature to make sure only the truest Bimmer fans understand what's what. The new SAV is the 2022 BMW iX xDrive50, which will wrap together 516 hp, a range of around 300 miles (482 km) and 200-kW DC fast charging in a CUV-like performance vehicle that will sprint to 62 mph (100 km/h) in 4.6 seconds. If that's not quick enough, BMW also announced – but didn't yet provide details for – the first all-electric SAV from BMW M, the iX M60.
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