New car inventory still has not fully recovered, Porsche is expanding its subscription program to the United States and Tesla. All this and more in The morning shift by March 25, 2021.
1st Gear: It was supposed to be a non-issue right now
New car inventory fell last year because of pandemic factory closures, although many expected him to recover now, as it will be almost a year and the auto factories have been operating for most of that time. Except then came a surprisingly bad winter, and a global semiconductor shortage, and problems in the ports.
Resellers (and consumers) are feeling it, according to the Wall Street Journal.
For buyers, there are slimmer choices, higher prices, and longer waits, dealers and analysts said. Many consumers have had to order models from the factory or choose from vehicles still in transit to the dealership, rather than immediately driving their new cars out of the lot.
At the end of February, dealers had 2.7 million vehicles in stock or being shipped to stores, a 26% drop from the same month last year, according to Wards Intelligence. It’s almost as low as last summer, when US auto factories came back to life after shutdown.
“Stimuli flow, tax refunds are issued and consumer confidence is restored,” said Jonathan Smoke, chief economist at research firm Cox Automotive. As consumer demand for new vehicles is expected to strengthen this spring, the inventory crisis is likely to worsen, he added.
For buyers, the right deals are getting harder and harder to find. Many automakers have slashed the steep discounts they were offering at the start of the pandemic. Automakers spent an average of about $ 3,562 per vehicle on discounts and other sales incentives in February, down $ 600 from the same month a year earlier, according to research firm JD Power.
For years before the pandemic, we expected (relative) stability in the auto market, at least since all the turmoil of the Great Recession. It seems that we can now continue to expect chaos.
2nd gear: Tesla is right
Tesla throws a lot of crap at the wall, some sticky and some not, in the form of cars, tech and claims, although I have to say I’m 100 percent with his take on manufacturer penalties. automobiles that violate automotive emissions regulations.
Tesla Inc is pushing a U.S. appeals court to immediately reinstate a 2016 Obama settlement that more than doubles penalties for automakers who fail to meet fuel mileage requirements, court documents show.
On January 14, the Trump administration delayed the start of higher sanctions until model year 2022. Tesla told the United States Second Circuit Court of Appeals that Trump’s action was “illegal “and” decreases the value of the performance-based incentives that electric vehicle manufacturers, such as Tesla, accumulate by standards. “
Tesla first asked the appeals court to act on March 4, saying “the flagrant action of the Trump administration presents a situation as extraordinary as it is unjustified and inflicts immediate and irreparable harm on Tesla.”
In a document filed Monday, he said the government’s position that there was no immediate harm in giving the Biden administration time to review the Trump decision “ignores the ongoing impacts” on the credit market. .
Tesla is motivated by self-interest here, of course, given that the value of the regulatory credits it sells to other automakers would likely increase if the penalties were higher, but, nonetheless, those penalties would have to be higher. and automakers should have more incentives to quit make gas guzzling cars, Not less.
3rd gear: Hyundai Kona EV owners are crazy
Hyundai has a big, expensive booster of Kona EVs on his hands, and he doesn’t seem to handle it particularly well. At least according to the owners of Kona EV that talked to Reuters.
Hyundai announced last month that it would replace the battery systems of some 82,000 electric vehicles around the world at a cost of $ 900 million following fires in 15 Kona electric vehicles.
But Hyundai has yet to communicate a clear plan to owners on when and how they can expect a potential fire hazard they are driving to be addressed, some owners have complained.
“When I asked the Hyundai repair center when exactly my Kona EV would receive a battery replacement, they just told me they would put me forward, but I haven’t received the exact date yet,” said a 34-year-old man. the former owner of Kona EV in Seoul, nicknamed Kim, told Reuters.
Owners who spoke to Reuters declined to give their full names, citing privacy concerns and a potential backlash from Hyundai.
“There were only a few EV options when I bought my Kona EV in 2018, but now that there are a lot more EV models available, I don’t think I would go for Hyundai again,” he said. Kim said.
4th gear: Porsche extends its subscription program to the United States
It’s to help give Taycan a boost, according to Bloomberg. More than a few automakers have experimented with auto subscriptions in recent years with mixed success, although Porsche still seems committed.
The subscription service, dubbed Porsche Drive, is coming to four new cities in California – San Francisco, San Jose, Irvine and Monterey – as well as Houston, Texas, bringing it to nine cities in total. The German luxury brand launched the program in Atlanta in October 2017, offering $ 2,000 and $ 3,000 per month subscriptions that allow drivers to switch models like the 718 Boxster or the Cayenne.
“It’s profitable,” said Kjell Gruner, who took over as CEO of Porsche North America in November. “We wouldn’t extend it if it didn’t make a lot of sense to us and the dealership business,” he said in an interview.
Porsche models tend to have high residual values, which helps keep costs down, he said. Subscription prices are about 20% higher than the monthly cost of a two-year lease, which covers expenses such as technology, insurance and maintenance.
Subscribing to an electric Porsche doesn’t come cheap. Leasing a Taycan 4S, a high-performance version of the vehicle, will cost $ 3,250 per month, the most expensive model in the program. The basic rear-wheel drive version costs $ 2,500.
Automakers have also seen subscriptions as a way to attract young buyers, and perhaps snip a few future Tesla owners, although these also appear to be the tried and true methods of getting someone into a new car – selling it. cash, leasing, or financing – are not really broken.
5th gear: auto loan is a nasty business
So as of Wednesday, you can’t lend someone in Illinois $ 40,000 or less at an annual interest rate greater than 36%, according to Automotive News. Illinois joined 17 other states that have capped interest on certain loans, including auto loans and spread insurance products that factor in interest.
The Illinois General Assembly passed the law in January as part of a larger Legislative Black Caucus initiative to reduce racial inequalities in the state. The law borrows heavily from the Federal Military Loans Act, which has the same interest rate cap for military members and covered relatives.
[Lisa Stifler, the Center for Responsible Lending’s] state policy director, said in a statement that the law would help end predatory debt traps that disproportionately impact communities of color.
“Illinois is joining the strong trend across the country of going above rate limits to stop predatory lending,” she said. “We also need to enact federal reforms to protect these state ceilings and extend protections across the country.”
By law, Illinois families pay more than $ 500 million per year in down payment, payday, and title loan fees. Almost half of Illinois payday loan borrowers earn less than $ 30,000 a year.
You should probably never take a loan with a double-digit interest rate no matter what it’s used for, let alone a loan that has an effective interest rate in the 1930s. But people still do, often because they feel there are no other options. Be careful there!
Neutral: Giniel de Villiers was born
He won Dakar once, you might remember.
Neutral: how are you?
I have noticed in my neighborhood that more and more old people are unmasked outside, which I think means they have been vaccinated, although I am still a little nervous about it all. .