Carmageddon for cars. But big equipment is hot and gets pricier.
Ford waited until today to report its second-quarter new-vehicle deliveries in the US. So now we know what happened to total US auto sales in the second quarter and in the first half this year, and it wasn’t pretty. New-vehicle deliveries, fleet and retail combined, fell 1.5% in Q2 compared to Q2 last year, to 4.5 million vehicles; and in the first half fell by 2.4% to 8.4 million vehicles.
This puts new vehicle sales on track to fall below 17 million units for the year. This would be the worst level since 2014. According to my own estimates, new vehicle sales in 2019 will decline to 16.95 million units, roughly on par with 1999, in a horribly mature market, whose two-decade stagnation was interrupted by the excitement of a collapse and recovery back to stagnation levels:
Ford sales fell 4.1% in Q2.
Ford [F], like GM, stopped reporting monthly vehicle sales, and now only reports on a quarterly basis. In the second quarter, reported this morning, sales fell 4.1% to 650,336 units. This put Ford into third place, behind GM and Toyota.
Carmageddon: This is the big shift where Americans refuse to buy new “cars” and instead are buying new pickups, SUVs, compact SUVs, and vans. And they have far higher price tags and profit margins than cars. Ford’s car sales plunged another 21.4% to just 110,195 units in Q2, continuing their multi-year collapse.
Trucks (not including SUVs) are hot: Sales rose 7.5% to 324,243 units. But within that category, F-series pickups fell 1.3% to 233,787 units, getting cannibalized by Ford’s mid-size pickup, the Ranger, that it had brought back from the dead for the 2019 model year.
But Ford’s SUV sales are cold, disconcertingly falling 8.6% to 215,898 units.
Ford – along with other automakers – brags about how it is able to raise prices. It even explains its strategy in its report, meant for Wall Street, not consumers. It reported proudly that the average transaction price (ATP), which includes all incentives, for the 2019 Lincoln Nautilus SUV rose by $3,700, or 9%, to $44,300 in Q2, compared to the 2018 Lincoln MKX in Q2 last year.
These are the same vehicles, with a new name, a 9% higher ATP, a couple of updates, and about the same cost of manufacturing. Wall Street loves this strategy because Ford just increased its revenues and profit margins at the expense of the consumer – and consumers love getting jacked around like this, obviously, because deliveries jumped 13%.
Ford also brags about the price increases of its flagship product, F-series pickups, whose sales declined. The ATP for the F-series, which range from a base work truck to fully decked out crew cabs and beyond, rose by $1,200, to $47,500.
But Ford’s cheapest vehicle – a car! – had a huge gain in sales: Fiesta deliveries jumped 70% in the quarter to 22,173 vehicles, and are up 50% so far this year. This is now Ford’s second-bestselling car, after the Fusion (+11% year-to-date). All other car models are dying, with the Mustang (-9% year-to-date) dying more slowly than the Focus (-83%) and the Taurus (-47%).
The fact that Fiesta sales are hot shows that there is demand for decent entry-level cars, despite Carmageddon. But with a base sticker price of $14,200, there is very little profit margin for Ford, and it has no incentive to market them other than meeting Corporate Average Fuel Economy (CAFE) Standards.
GM sales fell 1.5% in Q2.
GM [GM] slows the decline. Sales had plunged 7% in Q1 compared to a year earlier. In Q2, sales fell only 1.5% to 746,659 units, GM reported yesterday. Its report is all about trucks, SUVs, and crossovers, with lots of details on trucks.
But the word “car” is mentioned only once, in passing, and without a number, in this phrase: “The company estimates that its retail market share was even with a year ago, with truck and crossover deliveries offsetting lower passenger car sales.” And that was it. Carmageddon.
Expensive crew cab pickups are hot: Sales of the Chevrolet Silverado 1500 crew cab and GMC Sierra 1500 crew cab jumped 12%.
And GM, like Ford, brags about price increases. The ATP of all its sales rose by $1,575, or 4.4%, to $37,126.
FCA sales fell 0.5% in Q2.
Fiat Chrysler Automobile [FCAU] still reported deliveries on a monthly basis. But it announced yesterday that it will abandon the practice and switch to quarterly sales reporting going forward, following in GM’s and Ford’s footsteps.
In Q2, FCA’s sales declined 0.5% from a year ago, to 600,460 units, after having fallen 3.1% in Q1. For the first half, sales fell 1.7% to 1.1 million units, putting FCA in fourth place, behind GM, Ford, and Toyota.
Its Ram pickups are hot, with sales jumping 56% in the month of June, to bring Q2 sales to 179,454 vehicles. That’s about 30% of FCA’s total sales!
Toyota sales fell 0.9% in Q2.
Toyota reported June sales yesterday, which fell 3.5% from a year ago. This brought sales in Q2 to 675,183 units, down 4.1% from a year ago, which put Toyota in second place ahead of Ford. For the first half, sales fell 3.1% to 1.15 million, which put it in third place, behind Ford.
Carmageddon at Toyota too: Car sales (Toyota and Lexus) fell 7.7% in the first half to 431,804 vehicles. But truck sales aren’t hot either, ticking down 0.2% in the first half to 720,304 vehicles.
Those are the Big Four automakers in the US. The rest are lagging far behind.
The table below shows deliveries by automaker, in the order of year-to-date volume. I used the data for GM, Ford, Toyota, and FCA as reported by those automakers. The remaining data is via Automotive News, whose estimates don’t always match those reported by automakers, for example Ford’s numbers. These are sales by dealers to their customers and include leases (dealer sells the vehicle to a leasing company which leases it to the customer) and fleet sales either by dealers or by the automakers directly to their large fleet customers, such as rental car companies.
Tesla’s guessing game
Tesla [TSLA] is near the bottom of the list, just above Volvo. But Tesla doesn’t report US deliveries at all and leaves them to our imagination. It only reports global deliveries on a quarterly basis, which it did yesterday. To get a feel for its US deliveries, I used the estimates by Automotive News, according to which US deliveries rose 30% in Q2 to about 30,000 units. Tesla could easily avoid the guessing game by reporting accurate quarterly US deliveries, but refuses to do so.
How to raise prices and revenues in this environment?
Sticker prices are largely irrelevant, given the importance of incentives by manufacturers and discounts by dealers. For example, GM said that it paid 12% of the Average Transaction Price in incentives. So the industry uses ATP to measure actual price levels. For the industry as a whole, the ATP in Q2 was $33,681, according to J.D. Power PIN estimates, cited by GM. This was up about 4% from a year ago.
The industry is trying to push up this ATP, and the place to start is by pushing up the sticker price, and then go from there by throwing in incentives when needed. Some vehicles are hot and don’t need incentives. Others are stuck, and dealers have trouble moving them, and incentives are needed. This changes constantly.
And the industry has figured out that Americans are tightwads when it comes to buying lower to mid-range cars – in part because people in this end of the market are often strung out financially.
On the other hand, there are plenty of Americans that like “big,” the bigger the better, and they love paying extra for it, and have the money to do so, or can easily borrow it, and are proud of paying these big-fat prices. And automakers love them for it. That’s what this industry, after two decades of stagnation has come down to, where every new entrant, such as Tesla, takes a slice from everyone else in this zero-sum market, and where revenue growth is only possible through price increases and by pushing consumers into bigger, more expensive models with fat profit margins.
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Don’t worry.
Stock buybacks will keep stock prices humming for the big three.
Until the next auto bailouts.
I sometimes wonder if GM had actually went through a real bankruptcy without political driven bailouts, how much better they would be today.
Smaller – yes. But much more nimble and with much more innovation.
GM would have filed bankruptcy chapter 7. it was not a bailout. they filed chapter 11, and the US govt provided debtor in financing that no one was going to do so. Also, GM would have taken down the parts manufactures that supply the other car companies. Then, those car companies would have gone down causing higher unemployment than the peak of 10.00 % as October 2009.
Also, non-buyers of cars would have been in deep trouble. Service car companies like Firestone would have been in trouble because they could not get parts. Also, commuters would not have been able to go to work since they could not get their cars repaired or serviced. Tourists could not go on vacation and kill a good portion of the tourism economy.
If the USA had to shift suddenly to a war footing, and massively increase production of all war related hardware and equipment, where would the productive infrastructure come from..? Would the Auto Industry Infrastructure matter??? – Think about it… now you know why they get bail outs.
Couldn’t we just print more money to solve that problem? Central banks have had good luck resolving many problems with this approach.
Hysterical speculative nonsense. Repeated so many times by financial bed wetting experts on financial sites to defend Big Gov overreaction.
No one knows what would have happened because it wasn’t allowed to happen.
You’re talking total dissolution of the company. That was never going to happen.
And if it had demand would have gone to competitors, the aftermarket suppliers, would have taken up the slack with the surviving companies and other than a minor gulp business would have continued.
GM would have still been producing vehicles as it’s own smaller entity or as a part of another company.
It’s called creative destruction. It happens in an un-.gov oppressed economy.
One more basic economic negative fundamental, to add to the ever growing list of negative economic fundamentals.
Did I hear someone say recession?
By the way, get your “Old Crow” before prices get crazy. Why?
Big fire at Jim Beam, as 40,000 barrels of whisky go up in smoke.
Oh the horror!
Gotta love insurance…
If you can’t sell it, burn it.
First thought that entered my mind when I saw the headline!! Just like the east coast refinery fire a short time ago. Excess financial stress can and does cause fires……
Jake “The Snake” Roberts made that company a lot of money. That was Jake’s brand. He’ll be in tears following the news.
In his famous “Austin 3:16” promo, Steve Austin proclaimed Jake’s drink of choice to be Thunderbird. And who am I to doubt the Texas Rattlesnake?
(Wrestling fans will know what we are talking about, the rest will probably think we haven’t got both paddles in the water)
Wouldn’t that be “wrasslin'”?
;-)
Engage in some more lovely DEBT to buy the CAR of your DREAM!
How does people think Humanity can thrive if we don’t keep increasing our level of useless consumption?
How does one thrive without useless consumption? Is a guy supposed to go through life as an overweight, balding insurance sales rep? Heck no! Get that latest F150 and suddenly maybe you’re a studly and successful cattle rancher! Where a cowboy hat and all the dudes in traffic will want to be you. And the ladies! Oh boy, they’ll want you. They’ll want you bad!
At least until you have to skip paying the water bill to make the first monthly payment. Just one of the next 95. But for that one fleeting moment baby, you had it all!
You nailed it, Kent. I couldn’t sleep with the payments needed (not to mention sales tax fees and insurance). I really don’t want to pull 50K from savings either. About payment #40 with the paint falling off, needing a tranny and a 3rd set of 20-inch tires, maybe gas up to $4.99, I’d be crying the blues. No wonder people are on opioids.
LOL on what planet do you guys live? 95 payments for an F150? Paint falling off after 40 months?
I lease a truck for $330/mo including tax and I put nothing down, nada zip zilch, not a dime. Yes a whopping $330 a month!!! GHASP!!! MSRP was $49K and change. 10K miles a year. Which is plenty miles since my truck is used to do “truck” stuff like tow my boat to the lake, go camping, Home Depot runs, etc. The truck is under warranty the entire lease, which means $0 in repairs. And the only maintenance is change the oil and rotate the tires every 5K miles.
My wife has a BMW 5 series lease, $450/mo also with $0 down. That’s the family’s daily driver, 15K miles a year. And also under warranty the duration of the lease and even better, includes scheduled maintenance. Other than wiper blades haven’t spent a dime on anything for that car. Lease is up in 6 months and we’re shopping for a replacement. Leaning towards a Porsche Macan, also a lease of course.
Seriously, you guys need to get out a little and experience the real world some time. Shop around, learn to negotiate and you can drive high end cars for not that much money. Sure you could save a few bucks driving a beat up 2002 Camry. But life is too short for that nonsense.
Usually I see monthly lease rates at about 1% of the value of the leased vehicle, so I was curious to see whether a $49K truck could be leased for $330 for 3 years. I ended up using the 2019 F-150 Lariat 4×4 Crew Cab (MSRP $48K) and the 2016 F-150 Lariat 4×4 Crew Cab (selling for $40K) to estimate the residual value. Valuations obtained from asking prices on AutoTrader. (I think the used leased vehicle would probably sell below that in an auction which would make the monthly lease cost go up.)
It turns out that, with no or nominal lease signing costs, the payment could be as low as $330, as long as the lease is making only 2.5% for the leasing company– pretty close to the inflation rate and the risk-free rate. If the leasing company is expecting 4.5% then the monthly payment would be around $450 (close to the 1% of MSRP expectation). Etc.
I’m actually in the market for a new truck, and I could be interested in a lease if I can get the payment as low as 0.65% of the MSRP for the new vehicle. So I checked Edmunds for lease offers, and (a) they offer the same 2019 Lariat with an MSRP of $60K and an estimated lease amount of $700 per month. Maybe somebody can tell me where to get the great deals.
https://www.edmunds.com/inventory/srp.html?inventorytype=new&make=ford&model=f-150&submodelid=SuperCrew&paymenttype=lease
Correction, I used the asking cost for a new F-150 Lariat SuperCab 4×4 (from AutoTrader) instead of the MSRP (estimated from Edmunds). Interesting that they are 20% apart.
Dale,
1% is sort of MSRP for leases, but nobody pays MSRP prices. At least not if you know what you’re doing. And you can’t really generalize since every make, every model has different incentives every month. They key is to be on the lookout for these and pounce when the right deal comes along. Same car/truck will lease for $150 higher or lower every month based on current incentives and time of the year.
In my case, $49K was MSRP. Then you take the gazillion rebates that are always available for Big 3 trucks, which brought the sales price down to about $37K. Then there was some lease cash available as well, I think it was $2000. The already low money factor was lowered even more, down to an effective APR of 0.65% given my 800 FICO score. And finally I took a high residual option which lowered the payment even more. The downside is if I want to buy the truck outright, it will cost a lot. But I never buy out leases, so it’s not an option. And it’s only 10K a year which increases the residual by 2% from the standard 12K a year lease.
Btw, like Dale, I’m thinking there’ has to be catch somewhere, with the numbers given by “Just Some Random Guy”.
I mean, leasing a BMW 5 series for only $450/mth?
And what kind of lease term is that based on: 3 years? 5 year lease?
Generally, the longer lease term you commit to, the lower the monthly cost, but where I am, there is no way you can get that cheap a lease with no-money-down, all-maintenance paid deals, unless your daddy happens to own the shop.
Or maybe the BMW 5 series he’s referring to, is really a 1998 model? lol.
He didn’t mention the truck model and make as well.
I’ll give him the benefit of the doubt for now; but I’d like that “Just Some Random Guy” to give some verifiable data or website link or tel. to the company that he gets his supposedly “fantastic” lease from; otherwise seems to me he is just full of bull.
kevin,
Here is a quote for a lease off the internet, in less than 1 second, for a BMW 530i: $499/mo. for 36 mos. MSRP $58,645
But read the small print:
“$4,924 due at signing.” So you need to have $5,000 ready to go up front… and there may be more…
“10,000 miles per year. $0.25/mile over allotted miles and excessive wear and tear.” So if you return the vehicle with 45,000 miles after 3 years, you have to pay an extra $3,750 just to get rid of the vehicle.
“Lessee responsible for insurance during the term, excess wear and tear as defined in the lease contract, and a disposition fee of $350 at lease end.” Yes, make sure to have an extra $350 ready when you turn in the car.
“Tax, title, license and registrations fees are additional fees due at signing.” This may be included in the “$4,924 due at signing,” to be verified. If it is not included, you need to add several thousand bucks to the “$4,924 due at signing.”
Kevin,
Link to what my lease agreement? You want my SSN too? How about DOB and address?
My point is the advertised stuff is the starting point on negotiating. Do you pay asking price on a car when you buy? No. Just like you don’t pay asking price on a lease. In fact don’t even bother with any advertized rates, they’re garbage. What matters is 4 things: MSRP, interest rate(money factor), selling price and residual.
A lease is still a purchase since the car is purchased from the dealer. But instead of you purchasing it, the leasing company purchases it and the you pay the leasing company the amount the car depreciates with some interest. So the negotiating is still the same, between you and the dealer for the purchase price. That is solely between you and the dealer, the leasing company has no interest in that. Then depending on lease incentives from the leasing company, the monthly lease is calculated using a variety of factors like residual value of the car at the end of the lease, length of the lease and money factor, which is the a fancy way of saying interest rate. The key is to find a lease deal where the residual is high, interest rate is low and the selling price relative to MSRP is really low. And there are alls sorts of lease cash available. Mercedes used to have a program with United where they’d take $1500 off if you were a premier plus member. You can lease $60K cars for cheaper than $40K cars if you find the sweet spot of all these variables.
Having said all that, that’s a lot of moving parts. And a lot of math!! :) And some work. Which is why most Americans who are lazy AF, have no clue how finance works and are generally kinda dumb just sign up for the $599/mo with $4800 down advertised price, which is almost always a horrible deal. And why leasing gets a bad name, since those types of deals are total ripoffs.
But do some legwork and believe me, you can drive a high end car for not a lot of money.
Wolf, exactly.. .there’s the fine print that “Just Some Random Guy” convenient;y forgot to mention.
And for everyone’s reference to his “stretched truth”, I quote him here: “I put nothing down, nada zip zilch, not a dime.” lol.
And no cigars for simply telling me to search off the Internet.
What I was asking JSRG for is the lease company website, not excuses to go Google it myself, which means there’s nothing to verify.
______________________________
Here’s to (JSRG) “Just Some Random Guy” (who doesn’t even have a half-decent fake online name)…
Dear JSRG, where did you see me ask for any of your personal details you mentioned? and why are you so agitated?
All I’m asking you is to give me a website link to the company that you lease from, so that others like me can call them up presumably for a car lease and VERIFY what you claimed to be able to get.
There is nothing personally identifiable and the lease company wouldn’t know who the heck is this “Just Some Random Guy” dude we referred to anyway.
So what are you afraid of? Or you are having difficulty pasting the leasing company’s website link here? lol.
Come on, JSRG… I and most readers here KNOW whats a lease.
You needn’t go into beating around on the technical definition on leases.
You went into another long descriptive outburst, but yet again I don’t see any actual reference to the lease company name and website from which to try to get that “great BMW leasing deals” you apparently got.
Kent, thats the funniest comment I’ve read in a while.
I’m guessing the emphasis is on: “that one fleeting moment..”. ;-)
When I was younger I fell for all that “And the ladies! Oh boy, they’ll want you!” when I bought a Triumph motorcycle.
Let’s just say the whole James Dean/Marlon Brando thing work if you look like James Dean and Marlon Brando, not like you fell off the ugly tree and hit every single branch with your face on the way down.
There was a silver lining in it though: at least my already decent farm-honed repair skills got a supernatural boost. That damn thing cost me a fortune in spare parts and there was always, always something broken and/or not functioning properly.
Rebates sound nice, but I don’t think they are coming until a real recession hits.
I’m having to pay $4,000 out-of-pocket for a second transmission fix on a 2014 model that has only 40,000 miles on the odometer.
I’m not thrilled with the value provided by the automobile industry right now.
Lol, I would get rid of the car asap. Go speak to the dealer ask what trade in value you would get and trade in and even roll over loan balance to new car if they won’t pay for it…. Unless you are getting a brand new transmission you are wasting your money, 20,000 miles later that transmission will fail as well.
Reminds me of when i rented a Ford Focus, was driving about 87mph on highway in Central mass uphill with the AC on.
Suddenly i was getting transmission overheating warning going off. I just kept going..
I’m guessing this isn’t a Toyota or Subaru. The A/C on my 15 year old Toyota still worked … and I live in the desert. Ditched it when it started popping engine codes suggesting catalytic converter issue.
Clean electrical contacts, look at connectors, some are really chintzy in quality, reset things, and if you still pop codes you may have an actual problem.
You dumped a reliable, but boring, and otherwise functioning auto instead of making a $500 repair (less if it’s really just an O2 sensor)? Sounds like you were tired of it and just wanted out (that’s OK).
BTW, the Japanese are starting to slaughter whales again, even though “whalers, who have long depended on government subsidies for their survival” and “The market for their product is declining while labor costs across the nation are on the rise.” You might give that a thought when you’re shopping for a new car.
I dunno..my wife’s 15 year old RX330 had a catalytic converter light go off. Repair cost was $900. I got it fixed, then a couple weeks later the other catalytic converter light went off. I ditched the RX330 and went to “swap a lease” where I took over a lease on an RX350..no money down. The SUV had 8000 Florida miles on it. I plan on buying the car when the lease ends. I don’t like monthly payments and keep my vehicles until it doesn’t make financial sense.
You should have parked that vehicle next to the Jim Beam warehouse, if you get my drift.
2014? I’ve never had transmission problems in my life, with either standard or automatic? Something sounds very fishy with your particular model.
I suspect the problem is that I’ve been towing a 1500 lb tent trailer with a minivan that is rated for 3500 lbs. I’ve believe that the stated towing capacity of this vehicle is wildly inflated.
15 years ago, I always drove GM and Ford products. Transmissions, engine problems, computer problems, you name it. Then, I switched to Toyota and Honda products. Not a single problem. I now have three vehicles, all more than 10 years old, and not a single problem. Two Toyotas and one Honda. I think they will last 10 more years. At this point, my monthly cost is 353 dollars per month for all 3 cars, and that number continues to decline the longer I own these vehicles. Better yet, the dealers will give me a decent amount if I trade them in because they are in great shape. Eventually, I will replace one of them just to get something new. I have been looking at a new Toyota Tacoma … soon.
what kind of car, did you do all the work at dealer, did dealer or you call OEM customer care line, did dealer have good OEM District Service Rep to look into it and maybe get OEM to help out here…
have you looked into TSB’s on this model and trim level on tranny?
‘Tesla could easily avoid the guessing game by reporting accurate quarterly US deliveries, but refuses to do so.’
assuming they have a functional accounting dept?
there are 120 million barrels of jb stored in ky. this 45k was a young batch. not to worry…
New vehicle sales are not far from an all time high. The slight drop off in sales is nowhere near as bad as 2006-2009. Sales were nearly level the past four years after a five year steep sales expansion.
The auto industry collapsed — and that’s the right word — in 2008-2010, with GM and Chrysler, along with numerous component makers, filing for bankruptcy. This collapse in sales that lasted for years (look at the first chart) created pent-up demand for a few years. That pent-up demand was met by 2015. Now we’re back at stagnation. There is no exit here. Look at my other articles on average vehicle age, and average miles driven per vehicle. This stagnation of 20 years is structural, not cyclical:
https://wolfstreet.com/2019/06/27/good-for-consumers-part-of-carmageddon-for-automakers-average-age-vehicles-in-operation/
https://wolfstreet.com/2019/06/29/average-miles-driven-per-vehicle-in-operation-in-the-us-drop-to-1992-level-another-reason-for-automakers-to-panic/
Well, but….the population in 1999 was 40 millions fewer than it is today. So, if you think about it that way, the current results are pretty grim.
Per capita auto and light truck sales are down about 16% since 2000.
But, vehicles last so much longer than they used to. If the sales numbers were adjusted for the longevity, the sales numbers reflect economic strength.
Thanks for your comment SocalJim
Finally, a remark that hits the mark…
To their own detriment Detroit has done a great job of improving their cars..
My dad would buy a new car or truck every 3 years. He pretty much wore them out running between Akron and Cleveland every work day. My mom would get one every 4 or 5 years. Back then a long term car loan was 36 months max.
Jump to today. I drive 200K+ before I start to even think about getting a replacement – and – the darned thing still has lots of life left in it.
The Tesla numbers are a scream–they only sell cars in exact increments and round figures! I mean, if they said sales were 29, 994 you might believe it, and not think twice, but 30,000 even??? Who are they trying to kid.
Tesla’s numbers are estimates by Automotive News. Estimates are rounded. Tesla doesn’t disclose US deliveries. It only discloses global deliveries.
Another great article by Wolf R. Some day I may be forced to contribute!!! In the meantime – thanks !!
1) Ford Edge : Ice, hybrid & Ev, as well as Ford Explorer : Ice , hybrid & EV ==>
2020 models will enter the market soon. They cannibalize current sales.
2) Ford European division on severe diet .
3) China car sales slump. Ford is less sensitive to China. Ford, with a small profile, had only a minor damage.
4) Consumers stay away from Nissan, but buying
Mitsubishi. Mitsubishi produce cars in Thailand for $5K, selling
for $15K. better margin than F-150.
5) When recession hit, mfg ask : where are the orders ?
There is no need to worry about excess sales of SUVs, pickups, and the other current favorites of the auto industry, at least not in CA. As our gas taxes continues to increase, this state is poised to be the leader in ensuring such gas guzzlers are taken off the road. People should really just buy a Tesla instead.
And if you can’t afford a Tesla in the first place, too bad for you. You should’ve thought about that before buying a climate change inducing ICE vehicle, or a house. (I know that doesn’t make any sense) After all, you could be saving your hard earned dollars to make sure the vision of Elon Musk occurs.
Just some auto trivia: I had a small muffler job last week on my Honda at Midas (150. One hour) and yacked to guy on computer who put up with distraction.
Asked about Nissan Versa. Ok he said but avoid CVT transmission. Not reliable. More about that at my next stop further down column.
While at Midas I mentioned Smart Car cuz I thought half a car should be half price. They were well over 20 K here in Canada when they first came out. He says ‘and they are expensive to work on. We had to replace brake master cylinder on one. No jobber avail only from Benz.
Two thousand!!! Just for the part. Canadian $ but jees.
On to next stop. Lady of house bought new and wanted rid of her Dodge 2004 Neon. Not bad shape no rust 230 kilos (100 K mikes) My job to sell it but I don’t want to bother so I go to used auto joint with sign: We Buy Cars and say I’ve got a flip for you. Just 500 and its got 500 worth of newish tires.
He says: ‘they are such terrible cars. I buy them, put money into them, sell them and a month later the buyer is back pissed off. If it was a Toyota I’d give you 1500. But I’ve decided no more Neon no more PT Cruiser. Next month except for trucks I’m going import.”
The guy is polite and chatty so I bring up Nissan CVT trans. Here is some info that may be of interest to a reader who has one (and has put up with this trivia.)
Apparently Nissan is doubling down on it offering extended warranty to any post March or so 2009. The guy said he had a Versa and it seemed to be hesitating as he pulled away. So he took to dealer and they put in NEW trans cuz Nissan is covering it. But he barely got under deadline by a month or so. New trans is covered for 200 K kms
I first researched Nissan CVT a bit when Lady of Hse was shopping and looked at one. There are law suits including ( I think ) a class action with a municipality joining cuz they bought a fleet or something. So I said avoid and Midas guy agrees.
Sorry not sure about year. I think it was 2009 but that seems too good to be true.
I had a ride in a Hybrid RAV yesterday. 6.3 litre/100Km, very comfortable…with the batt startup.
For the comment above, Teslas and ilk are NOT climate benign. ” Tesla car battery production releases as much CO2 as 8 years of gasoline driving
Anthony Watts / June 20, 2017
Ooops, looks like those “saving the planet” Tesla snobs just got their eco-ride de-pimped”
https://wattsupwiththat.com/2017/06/20/tesla-car-battery-production-releases-as-much-co2-as-8-years-of-gasoline-driving/
Our Toyota Yaris sits for approx 6 days per week. Reduction in driving or no driving is the gold standard, imho. In North America we all just buy and use too much stuff….period.
Paulo,
I love your stuff, but I’m going to scold you for posting this link. It is click-bait. I doubt you actually read the article. It’s a waste of time. It seems you just read the headline (click bait). The article is written in terrible English and is superficial to the point of being nonsensical… typical click-bait material. It talks about a report without linking the report.
The fatal flaw of this piece is that it compares the carbon produced in manufacturing a battery to the carbon produced in driving and flying, but it doesn’t even include the carbon produced from manufacturing an ICE vehicle.
It should be apples to apples. Carbon produced in manufacturing the vehicles, both EV and ICE, including batteries, and carbon produced while driving, and then netting the whole thing out over the life of the vehicles.
The article does no such thing. Instead, the article compares the carbon produced in manufacturing a battery to carbon produced when you fly … on a plane! I mean, come on!
This is the kind of BS article with click-bait title that I normally delete. Garbage like this has no place on WOLF STREET. And I certainly don’t want my platform to be used to promote that garbage site. And it wastes my time because I have to go look at this garbage.
BTW, I always buy vehicles because I like them, and because of what they do for me, and not because of any emissions considerations. I have never ever bought a vehicle because of emissions considerations. That is just totally nuts. So you anti-EV people need to get off this carbon argument. You just sound silly. Most of the EV buyers buy EVs because of the advantages they have over ICE vehicles unrelated to emissions. Go drive one! And you’ll find out. From that point on, it’s just a question of money … when will the dollars work out? When will it be cheaper to own an EV? Will the convenience of an EV and the low operating costs make up for a higher purchase price?
And yeah, if you drive 800 miles every day, six days a week, an EV is not for you. EVs are not for everyone, just like a 4×4 dually 1-ton diesel crew cab is not for everyone. That’s why there is a choice when you go to the dealership.
Interesting figures for German cars with BMW and Merc sales down. It kind of shows why Germany is having problems, as an export led economy, if you also throw in smaller sales in China…. The UK, who like the USA, exports hardly anything , looks in a better position even after Brexit.
BMW (a company I work closely with and I know very well) committed a typical capital sin: too much expansion, especially in segments they had no business being in.
The company may be a financial behemoth but plainly put they haven’t the technical resources to serve a lineup that’s supposed to expand by a dozen model (between cars and motorcycles) every two/three years.
Their latest diesels with exhaust urea injection (to cut emissions) have always been problematic to say the least and have never been properly fixed, and that’s something regulators want either fixed or withdrawn from circulation. Much more critically you have to explain owners who paid a high sticker price (often in cash) why the MIL comes out every other week and the dealer may be very apologetic but seems unable to help.
This is just an example: technical troubles have once again cropped up their ugly heads, more due to poor quality control and assembly procedures than to poor design, and BMW is really struggling to put those problems under control.
The company grew at a frantic pace but did not invest enough in keeping customers happy: the dealership network is strained at breaking point and there’s still that old cavalier attitude towards fixing problems.
It may work with low-tier customers stuck in a multi-year loan on an obscenely overpriced 1-series but once the big spending customers have had about enough they’ll just head to the Lexus dealership.
It is different than that. The young generations just don’t care much about cars and they think buying or leasing an expensive car is just a stupid thing to do. BMW and MBZ are the new Buick lines … they rely on older generations because young generations are not interested in cars with bling.
What makes anybody think that the systematically impoverished youngsters has got the money lying around for luxuries?
thanks wolf for deciphering another cadaveric spasm..
what are we supposed to do with these dots again ?
It looks like against this stagnation trend, Tesla blossoms. If this year it only maintains the share it has had in the first 6 months, it will have quadrupled its market share from 2017 (0,24% or about 48,000 of 20,000,000) to about 1% in 2019. And their cars are much more expensive than the average, so in terms of revenue it will be over 2%.
(I have the US-sales numbers from https://insideevs.com/, their estimates are most often quite accurate)
Sorry Wolf for the click bait. I skimmed. Will be more discerning in the future.
Having said that, Batts and all vehicles (including electric) require a vast FF powered infrastructure from mining to transport, and I believe that going forward there will NOT be a BAU lite Society powered by renewables with a recovering World re-establishing climate stability. Furthermore, asphalt roads, concrete bridges, steel reinforcement, and actual construction and maintenance will still be done by FF powered industry and vehicles. I live in one of the few locations where a good 99%+ of our electricity is Hydro renewable, and where even the windfarm industry supplies more power than the 2? standby Ngas turbines. Our seas will still rise and the asphalt ring roads around Vancouver, Kelowna, PG, and Nanaimo will still be bumper to bumper many times per day.
Furthermore, our new LNG plants, a massive one under construction in Kitimat and another on the verge of final approval up Howe Sound at Woodfibre, (old pulp mill site by Squamish), is being touted as green; a green alternative to coal. This disregards the release of methane at all stages of production and the FF used in all phases of exploration/production/compression/export. Currently, site C dam is being constructed to service this LNG Industry energy requirement under the guise of ‘Green’, when in actual fact the production is in surplus to provincial energy needs.
I live on a tidal river, but also drive, use a chainsaw, run a small tractor, and guiltily plan to keep on doing so including buying FF transported/produced goods and groceries as needed. However, I also chaff at the simplistic view that EVs will fix our climate wrongs if everyone just switched over. In fact, the opposite may be true. By fostering this illusion we continue to promote harmful human activities.
Pushing around a 4,000 lbs Tesla to transport a 200 lbs human is the poster child of a wrong solution, imho. Insanity. Respectfully, what we need are fewer vehicles of all types and the only thing that will produce this is a doubling? tripling? of energy costs, namely, gasoline and diesel. Of course that’s the end of our economy and industrial civilization as we know it.
We are in a pickle of our own ingenuity. I respectfully suggest it will not end well and EVs will be seen as further folly as our coastal cities submerge. If energy costs increased cars would be lighter, smaller, and more efficient.
Anyway, happy 4th to American readers. All the best.
As a proud dinosaur, it seems to me that vehicles wear out or are replaced on a pretty regular basis as viewed over years or decades. Stuff like cash for clunkers merely borrow future sales creating gluts and famines in the purchase cycle.
What we might be seeing is a perfect storm in the “sales famine” due to recent incentives combined with a slowing global economy.
” it seems to me that vehicles wear out or are replaced on a pretty regular basis as viewed over years”
The pretty regular basis is the problem … the pretty regular basis is years longer than it was 10 years ago. The new cars last forever. That is behind the sales famine.
when we get to 14M SAAR then worry should commence, other than that its a cycle, sales peaked and should trend down, Auto was the way out of the great recession prior to housing. Should lead way down…
pricing and 96 month loans are distorting other things….
Tariffs came and prices went up. They passed the expense on to the consumer, what a shocker. Now even with tariffs removed for the NA supply chains the prices will stay put, everything goes up but won’t come down.
I am pretty sure someone was saying prices wouldn’t go up because they couldn’t. Yet the ATP keeps rising, seems odd.
I wonder how much of the truck/SUV sales growth vs. decline in all other sectors is a 1% type dynamic?
Sure, banksters and what not buy luxury foreign cars like Mercedes and BMW, but 1%ers not in major cities or liberati strongholds almost certainly have different virtue signaling and value priorities?
Bobber- printing more dollars results in the US Dollar losing purchasing power as each dollar is now worth less value. That is why since 1913 the dollar is only worth 3 cents today and that results in prices going up.
SocalJim- I agree Toyota and Honda are the most reliable. My nephew has a 2005 Honda with 130,000 miles and no problems because he changes the oil every 5,000 miles and tranny fluid every 20,000.
You must realize that tranny fluid cools, lubricates, and drives the vehicle. You cannot keep it in there over 20,000 especially if your towing or doing mostly city driving because waiting at all those lights, that tranny gets hot in the summer.
Buying or leasing high end luxury cars will result in higher insurance premiums because if you get in an accident those parts are also high end in prices.
The most I have paid for a vehicle in the last 30 years is $6500. I have never had to replace a tranny or engine. The lowest mileage I got out of any was 165,000 except for one. The max was 185,000. The last few years I own the car I typically don’t repair anything unless it’s absolutely necessary. I usually sell them to someone lower on the food chain for under $1000.
If you ask me, the drop in driven mileage is due to online shopping.
Today, I needed a flash drive to update the navi maps on my car. Looked around and didn’t have one that I wanted to erase (needed 16GB). Previously, I’d pile into my car and drive to Best Buy, Office Depot or wherever to pick one up. Even in Orange County, that would be a 10-12 mile round trip – plus sitting for 5 minutes at each traffic light achieving zero MPG. I ordered it from Amazon. It will be here tomorrow. Miles driven? Zero. Time expended? Two minutes.
I was also looking for a moisture absorbent for our closets. The last time I needed them, I drove all over hell’s half acre looking for the ones I wanted – probably drove 50 miles and never did find them. Yesterday, I replaced them with another online order. Miles driven? Zero.
Cabinet hinges / drawer glides? Before I’d go to the local supply house. Now? I order them online from Wisconsin (for less, I might add). Zero miles driven.
Gas prices aren’t part of the equation for the reduced driving nor is owning a “gas guzzler”. My “gas guzzler” (Honda Pilot AWD) only “guzzles” @ 25 MPG city and 29 highway. The key is the 9 speed transmission. Compare that to our 2003 coupe with a smaller engine (2.5 liter inline 6) that delivers 18 MPG on a good day, downhill, with a tailwind.
Elkay I have a 2015 4 cylinder Honda Accord which gets 28 mpg around town and 39 mpg on the interstate. It has plenty of power when you need it, so comparing a 2003 is ages old on mpg. ICE has improved mpg since 2003.