Economical Cars, Hybrids, Small SUVs Suddenly Hot, Inventories Depleted. But Supply of Trucks & Full-Size SUVs Rises

Funny how that works when gasoline prices spike.

By Wolf Richter for WOLF STREET.

Inventory of new vehicles at dealers at the beginning of May ticked up again, but only by a hair, to still only 1.13 million vehicles, according to estimates by Cox Automotive, based on its Dealertrack data, released last week. This was down 45% from a year ago and by 71% from the old-normal times, April 2019.

Since July last year, inventory averaged 1.04 million vehicles. By contrast, in 2019, inventory averaged 3.66 million vehicles. You can see the improvement in inventories, but they’re painfully slow.

And there’s another thing showing up: Inventories are finally rising for trucks and full-size SUVs – the gas hogs – while economical cars, hybrids, and small SUVs are now in shortest supply, and dealers are essentially out.

For potential buyers, this inventory shortage sucks. Many have given up for now. Others have ordered vehicles and are patiently waiting months or many months for them to get built. For the industry, these ordered units don’t count as sales, and they reflect just future demand. They only count as sales when they’re finally delivered to the customer.

Production in the US and globally continues to improve while still constrained by the semiconductor shortages, which now may drag into 2023, and production shutdowns in China, where many components are made. In addition, European automakers are now struggling with shortages of wiring harnesses that were produced in Ukraine.

Early last year, new vehicles started selling above sticker, and it continues to this day. Manufacturers have slashed their incentives to dealers, and given the supply crunch and the absence of competition – given that dealers in general don’t have enough inventory to sell – dealers have gotten away with selling to even astute car buyers above sticker, which has led to the biggest jump in new-vehicle CPI data going back to the 1950s.

With little supply, sales plunge.

New vehicle sales in April plunged 19% from April last year, to 1.23 million vehicles, right back in the middle of the range in the 1970s and 1980s.

This isn’t a sign of low demand, but a sign of low supply, given that dealers had very little inventory to sell at the start of the month and still had little inventory to sell at the end of the month, and potential buyers left empty-handed and frustrated, or stopped shopping altogether and decided to wait until this craziness has blown over, or ordered a vehicle with an uncertain delivery date:

Funny how that always works when gas prices spike: Buyers suddenly want fuel economy.

Overall, days’ supply of unsold new vehicles ticked up to 36 days at the beginning of May, up from 34 days at the beginning of April, according to Cox Automotive. In 2019, the average supply was 90 days.

Lowest supply.

The non-luxury segments with the lowest supply at the beginning of May were those that offer high fuel economy. And many dealers are essentially out of these vehicles:

  1. Compact cars
  2. Hybrids
  3. Small SUVs
  4. Midsize cars.

Among the 30 top-selling non-luxury models, the models with the lowest supply were those with high fuel economy. There are no trucks on this list anymore:

  1. Honda CR-V
  2. Subaru Crosstrek
  3. Honda Accord
  4. Kia Sportage
  5. Toyota Corolla.

Turns out, there’s demand for economical and lower-priced cars, such as the Honda Accord and the Toyota Corolla. US automakers have largely thrown in the towel on sedans, which was an idiotic move to please Wall Street. And consumers who are looking for high-fuel-economy sedans get to choose among import brands. Toyota already gloated about it in March.

The non-luxury brands with the lowest supply, in part because they’re still manufacturing sedans, were all imports:

  • Kia
  • Honda
  • Toyota
  • Subaru

The luxury brands with lowest supply included:

  • Porsche
  • Land Rover
  • Lexus.

Above average supply… here come the trucks and full-size SUVs.

Among the 30 top-selling models, supply of the gas guzzlers is now above average:

  • Domestic full-size pickup trucks: Ram 1500, Chevrolet Silverado and Silverado HD
  • Domestic full-size SUVs, such as the Ford Explorer.

The major brands with the highest supply include:

  • Dodge
  • Ram
  • Chrysler
  • Jeep
  • Audi
  • Volvo
  • Lincoln
  • Buick

Dealers aren’t out of everything.

Overall inventories are woefully low, and overall supply is woefully low, and dealers are essentially out of some models. But with other models, they are starting to build inventories. And some brands have had plenty of supply.

Some brands have supply in the 60-day or higher range, which would be considered normal, such as Alfa Romeo, Volvo, Chrysler, Fiat, Buick, Jeep, Dodge, Ram, and Audi. But just because there is supply doesn’t mean Americans are going to flock to it and buy it.

By contrast, Kia, Toyota, which was #1 in new vehicle sales in Q1, and Honda have supply of around 20 days.

In terms of EVs, legacy automakers are now producing some models, but production is still small, and there are long waiting lists to get an EV. Tesla has raised prices in the US amid strong demand. But Tesla doesn’t have dealers, so there is no “supply” data because supply is measured at dealers. EV makers face similar chip shortages with their EVs that they face with their other models, production remains handicapped, and unsold inventories, and hence supply, of EVs will continue to be near-zero for a while.

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  147 comments for “Economical Cars, Hybrids, Small SUVs Suddenly Hot, Inventories Depleted. But Supply of Trucks & Full-Size SUVs Rises

  1. 2banana says:

    This has happened quite a few times over the last 50 years.

    You would think there would be at least one US automobile manufacturer to think a little more longer term.

    So, how are those share buybacks working out?

    “US automakers have largely thrown in the towel on sedans, which was an idiotic move to please Wall Street. And consumers who are looking for high-fuel-economy sedans get to choose among import brands.”

    • Halibut says:

      In their defense… No one that ever owned a Vega or Pinto was ever going to trust those manufacturers again anyway. Of course, we’re a dying breed. GenWhatever might fall for their tricks if they still offered some flavor of similar garbage.

      • Ervin says:

        I had a Pinto, four years 90,000 miles and very few problems. I’ve been in a Ford ever since. Nothing is ever 100%

        • Xavier Caveat says:

          We hit the daily double in that we had a Vega & Pinto, and sorry both of them weren’t all that reliable.

        • joedidee says:

          I drive 2 trucks – won’t be changing as I need one for work and one for vacations(pull 40′ TT)
          when you consider cost of hotels/airbnb/vrbo, etc.
          8mpg doesn’t even factor into HUGE SAVINGS on vacay

          almost time to fill up with $7 diesel – oh well

        • Jim Y says:

          @joedidee
          “when you consider cost of hotels/airbnb/vrbo, etc.
          8mpg doesn’t even factor into HUGE SAVINGS on vacay”

          Simple math:
          400 miles at 8mpg is 50 gallons. $6 diesel equals $300 a day. That’s a mighty fine motel room and doesn’t include cost of campground. And they pump the sewage.

        • Brian says:

          Jim Y, how do you get to the hotel room?

        • NBay says:

          He just busted a troll, Brian, (who’s agenda here is of no interest whatsoever, to me, at least) and Jim Y’s math is very conservative.

          How about any of several 40 mpg economy cars using $60 worth of fuel to go that 400 “vacay…oh well” (so cute) mi, leaving $240 cash.

          Nice hotel room, (if he even wants it), eh?

      • VintageVNvet says:

        gotta agree with Ervin on this one.
        BIL had a Pinto for years,,, drove it to work M-F, then raced it at a local ”Pinto only” race weekends, many weekends, and he loved it..
        I suppose he had done some work to at least TRY to make it competitive against other Pintos, but he had a big grin,( sure all y’all know what grin, eh? ) every time he came back from that track when I was there…
        And to be very clear, BIL was a very competent mech a nick.

        • NBay says:

          Yeah, VV, a friend owned one with the Ford “Sport” package. 4-on the floor, buckets, tach, wheels, suspension, etc. Nice car. Fun to drive.
          And good mileage.

          Kinda like the first SMALL Civics. (but not nearly as good) Ask resident wheels fun freak Dan….believe he played with couple. (Civics) Too bad he missed playing with Honda 600s, cornered better than a Porsche at low speed. Loved mine.

        • Dan Romig says:

          Three Civics; 1976, 1995 & 1995.

          Great cars, but for me they were simple machines to get from point A to point B. In Minnesota, I always have two sets of wheels for anything driven year-round, and the Civic with a nose-heavy FWD works well with snow tires.

          Very well engineered and easy to work on.

          My love for fast cars began out of University with a Datsun 280Z that I modified. And at age 19, I had a Kawi KZ 550 that I set up with café bars and a 4-1 exhaust. But now, I can afford to enjoy machines that are fast right out of the factory.

          What’s life without fast toys, eh?

      • Lily Von Schtupp says:

        In my earliest years I was in a Pinto on the recieving end of a drunk’s Rm Charger. Nothing quite like watching your mother fly through a windshield as one of your earliest memories. She was belted in, not that it mattered.

        Not much a fan driving my family around in small sedans in a sea of Land Yachts now that I can control it. Midsize and up, as afforded, are preferable.

        • ChangeMachine says:

          Sadly, any sort of limitation to vehicle size would trigger hyperventilation in America. Meanwhile, trampling actual constitutional rights has become blasé.

        • Exactly right!

          I drive a FORD TRANSIT 250 because I would feel cramped in one of those teeny full size SUVs or pickups.

          Try going to a FORD dealer and asking for a Transit. You can order one and hope you do not wait a year to get it.

          And 20 foot crumple zone in the rear ….

          And enough weight so the little peanut cars bounce off like pong ping balls…, should such an unfortunate event ever occur.

      • NBay says:

        No , nothing is ever 100%, but after the midget racers ran through all the Nova 4-cyls and then the Volvo 4 cyls, they went for the Pinto 6. It was a good mill. Racers know stuff like this, and their choices matter. Plus they blow up engines and make the vanish off the market if they aren’t being produced anymore.
        Kinda like how us kids totaled all the 55-57 Chevys and made them very rare and expensive today.

    • Happy1 says:

      Ford has an economy vehicle, it’s the Maverick hybrid. They don’t make passenger cars anymore because there is no profit in them and they aren’t popular outside of a few cities and outside of a few times a decade when gas prices spike.

      • Apple says:

        Maverick hybrid – 42 mpg In the city. Very respectable.

        • Harvey Mushman says:

          It might be a hit!

        • Djreef says:

          Also very small. They won’t work real well fro big people. They’ll probably be great for college kids, a small folks. They would have done better nixing this idea and just converted a Ranger to a hybrid option.

      • Wolf Richter says:

        2banana,

        The passenger cars that Toyota and Honda make are very popular. And they both make money selling them.

        • JayW says:

          The US Government / Politicians / Corporations are truly, incredibly, mind bogglingly out of touch in some very important areas.

          The EV Honda Fit had a 20 kwh battery and could go 180 miles on a charge with a 130 HP electric motor. And that’s with prior gen technology before GM’s Ultium batteries and Tesla’s 4680’s.

          Both of these companies could EASILY produce a similar sized EV sedan for $25K and make money. But NO! It’s about greed and making today’s consumer lambs pay whatever.

        • Augustus Frost says:

          GM sales in 1987 = $103B.

          GM sales in 2019 = $137B, before the pandemic. $122B in 2021.

          Ford sales in 1987 = $62B.

          Ford sales in 2019 = $160B.

          Both from CNBC.com and Fortune.com.

          So, Ford has done somewhat OK, but I’d still describe both companies as shrinking themselves to extinction, even as they attempted to do it for profitability.

          For GM, their collapse has truly been epic.

        • Wolf Richter says:

          These are global sales. GM sells more vehicles in China through its joint ventures than it sells in the US. GM is huge in China. But it did get rid of its European brands, including Opel.

        • Wes says:

          Mr. Richter, it just seems to be a paradox why Toyota(Kentucky), Honda(Ohio), Nissan(Tennessee), Hyundai(Georgia) and Kia(Georgia-Alabama) are able to sell sedans and make a profit while the US domestic manufacturers can’t. And, they are building them right here in the US. And, their US parts content is better than the domestic manufacturers.

          Go figure….

        • Wolf Richter says:

          Wes,

          Yes, that the US brands just handed the market to foreign brands will go down as one of the most idiotic decisions in automotive history, powered by Wall Street short-termism. They killed a lot of good models, such as the Fusion. Ford was getting ready to update/redesign the Fusion a few years ago and then decided to just kill it instead. Ford also killed the $14,000 Fiesta that would be sorely needed now. I cannot get this into my head for the life of me.

        • Danno says:

          Seems Japanese car makers think in the long run and actually think about and care about what customers want, then build to suit.

          While North American car makers know better what customers want…arroganance 101….hope we don’t bail them out AGAIN for their stupidy.

        • Augustus Frost says:

          Yes, understand it’s global but wasn’t familiar with GM’s China business.

          Only know they have been leaving markets globally (though maybe mainly in GFC) and that their US market share has collapsed.

        • SpencerG says:

          Wes,

          When I was at the University of Texas getting my MBA in the 1990s, the professors warned us about Ford. They called it “a car company run by the Finance Department.” That is one of the reasons that they are slower than the other car manufacturers at updating their models… getting an extra year or two out of a design is VERY profitable. It still doesn’t explain why they ditched ALL of their sedan models simultaneously… but it may provide an insight into their thinking.

          PS: For what it is worth, the professors thought Chrysler was good for MBAs interested in production management and design. I don’t recall them recommending GM for ANY business school graduates.

        • NBay says:

          So, after the gas crisis thousands of new Honda 600s were reloaded and dumped in the ocean off CA and WA. (I had one for a couple years) they were a blast to drive, (got my last traffic ticket in one, ’86) cheap to run, and easy to work on.

          During the GFC hundreds of brand new SF homes were bulldozed in Victorville.

          As Joe? said a few articles back, “….we practice a capricious form of Capitalism here….”…among other things. Go read it again, very concise and well written.

        • Marc D. says:

          I don’t have a problem with Ford’s business decision to drop the Fusion, Focus and Fiesta. They weren’t very profitable vehicles in this country.

          They actually still make and sell them abroad, in Europe, China, etc. So theoretically they could bring them back, although they’d be more expensive than they used to be, since they’d have to be imported.

      • Ken Honeycutt says:

        Just picked up my Hybrid Maverick last month after factory ordering it back in July. Great little truck. Gets almost 50 mpg in city driving and sometimes more if I hyper mile. Still own a 2010 Fusion Hybrid brought from the last high gas situation. Cheap gas never lasts.

  2. historicus says:

    The stock market will have a sharp impact on large item purchases….IMO.
    It will take a month or so for this to manifest, but it will….just about the same time revolving credit spikes, IMO.

    • joedideep says:

      so qx of month will be

      WILL JERRY CRUMBLE like sept 2019 or DO RIGHT THING and do QT??

    • Augustus Frost says:

      If rising gas prices don’t do it, the other change that is going to kill the sales volume of these overpriced vehicles is the end of cheap financing and loose credit standards.

      Credit standards are in particular at sub-basement levels, not just for cars either.

      No, it won’t come overnight but it’s coming.

      • Anthony A. says:

        Car dealer will do ANYTHING to get people with bad credit into a car.

        My bum of a 50 year old stepson with no job, SSDI, and a long term disability insurance payment (he’s NOT disabled) managed to get into a NEW VW Jetta @ 15% interest payment on the loan. He used his $2,500 Stimmi check for the down payment. SSDI and LTDI payments qualified him for a loan!

        He says if he can’t make the monthly on the car, they can come and get it back. His girlfriend is helping him (how do these bums find women to fall for this?).

        Easy to repo a car…..loan company owns it then.

        • Augustus Frost says:

          True, but you just described a form of moral hazard.

          Buyer didn’t have to work for the money to pay and is still better off versus not buying.

          Others just default even if they are working. They either still need the car anyway, don’t care, or maybe still better off because the repo doesn’t happen right away.

          Broke anyway, so can’t get blood form a stone.

          This is what is eventually going to end. It’s been around for long enough where it now seems “normal” but when dealers can’t find a lender to take the risk and buyers can’t either, it will either be from an actual loan shark or at the dealer’s risk.

        • fajensen says:

          It just means that consumer goods have no value and they might just give them away.

  3. ChangeMachine says:

    I vaguely remember exactly this around… 2009, was it?

    Anyway, my Prius is up more than my stonks are, so that’s cool.

    • Djreef says:

      2006. I bought my Expedition from CarMax for $19,500 with only 21,000 miles in it. 280,000 miles later it still runs great. Best purchase I’ve ever made.

      • ChangeMachine says:

        I’m going to be annoying here…

        260,000 miles / 13mpg = 20,000 gallons * $3/gallon = $60,000 spent on gas.

        Just sayin. But hey, at least you haven’t been saddled with a ton of repairs!

      • Seen it all before, Bob says:

        I have a 2000 Ford Expedition purchased new for $35K as our family car. It has 200K miles. The car just won’t die.

        It has gone through 2 kids and has been run into multiple times.
        It has good bumpers with a few scratches from being run into.

        • Seen it all before, Bob says:

          As pointed out above, 13mpg is not great. However, it is the safest car I have ever owned. With the right tires, it has never been stuck in the snow. For fun, my kids used to take it out to pull all of the sedans out of the snowbanks on snowy days. The tips were worth it to them even after paying for gas.

          200K/13 * $3/gallon = $46K total./22 years = $2K/year with very few repair expenses.

          It is likely the cheapest car I have ever owned.

  4. Flea says:

    Bought a 2016 vow Passat ,traded in a a2015 Jetta paid 3 k$ difference .Asked manager if I got any oil changes .Straight out told me YOU GET NOTHING. After negotiating down from there 7,500$ first offer ,think I offended hom when I said he was retarted. Oh well

  5. JayW says:

    On a side note, everyone reading about the expected electrical grid outages this summer? Kinda glad we live in GA. Eventually, the long, delayed, WAY over cost Plant Vogle #3 & 4 nuclear reactors will come online. While everyone else is getting rid of them, GA is prepared for a nice upgrade to its base load capacity.

    Is anyone really paying attention to all the non-renewable power that’s going to be needed in the next 5-10 years to support all these electric cars GM, Ford, etc want to sell? I mean really. Do the environmentalist really think there’s going to be enough solar, wind, batteries, etc to handle the growing demand?

    Makes zero sense to be shutting down nuclear power plants at this time. In 5 years, we might even see moth balled coal plants make a come back.

    • Wolf Richter says:

      End all crypto mining in the US, problem solved.

      • Don says:

        It’s only a matter of time before crypto investor figure out that the emperor has no clothes.

      • Depth Charge says:

        Funny how it’s nothing but crickets on this. What a horrendous waste of natural resources.

      • Island Teal says:

        Does anyone truly know how much of the available electric power, by region/time,that crypto mining actually consumes?

      • Djreef says:

        Exactly. What an incredible waste of time, energy and resources. At $29,000 there’s no way it can be economical to mine at this point.

        • YuShan says:

          This self-adjusts, because the difficulty will automatically adjust down, so less power will be required per mined coin.

          However, I agree that the whole thing is stupid. Even if you want crypto, there are much better protocols that facilitate near instant transactions, are highly scalable and waste less energy than even classic fiat transactions.

          Things like BTC and ETH are relics of the past, but there are entrenched interests (i.e. oligarch whales) who want to keep the game going as long as possible to be able to offload (which requires new people to cough up $1.4T – which is near impossible).

          This is the Achilles heel of all unbacked crypto: it is not redeemable for anything real, so if the protocol is outdated, you still need a sucker to offload it to. There will always be a bag holder who eventually ends up with worthless coins.

          Contrast that with something that is backed by for example gold. If better protocols emerge in the future, you redeem for the gold and move to the new technology. Nobody loses in that case. There are no bag holders.

        • Harrold says:

          I think its the opposite, the difficulty to mine increases and the payout for decreases.

          Used to be you could mine with the GPU in your computer, then you needed a fast video card, now all mining is done with specialized ASIC chips.

      • Augustus Frost says:

        Can’t do that, it creates economic “growth”.

    • Harvey Mushman says:

      My electricity went out yesterday at around 4pm. It didn’t come back on until today at 2pm. It was a bad line. The houses in my neighborhood were built in the late 70s. I’m in Southern California. I watched them pull the old cable out (we have underground power lines). So this was just an old infra-structure thing, nothing related to demand. I expect all the demand problems and blackouts in about 2 months. Southern California Edison shuts off the power when the winds kick up in July/August.

      • Janelle says:

        I’m surprised California doesn’t have more underground power lines, with all the trouble you guys have with wildfires. And why don’t they cut the trees and brush underneath the above ground lines? My sister lives in northern Minnesota, which is heavily forested. They have power lines crossing a corner of their 3 acre lot. They power company has a easement on that land. They can’t build or plant anything on it. They come every few years and cut anything growing underneath it. On our farmstead in central MN, the power company cut off part of a tree that was too close to the line. I’ve seen a picture of California with a low hanging power line with a dry scrubby tree growing underneath.

        • El Katz says:

          The topography of CA is slightly different than that of MN where you can drive a bucket truck or brush cutter down the easement. The canyons and mountains aren’t friendly to heavy equipment. They do use helicopters but….. that’s a tad expensive and requires calm winds.

        • 91B20 1stCav (AUS) says:

          Janelle-and, adding to El K’s ground-relief comment, we’re dealing with years of investor-owned power companies directing company revenues to dividends/upper management salaries&benefits with relatively little towards power grid weather resilience/maintenance.

          (BTW, much of the new construction in our fair state requires underground utilities, a VERY expensive component tacked on the selling price of that new development…).

    • unamused says:

      “Do the environmentalist really think there’s going to be enough solar, wind, batteries, etc to handle the growing demand?”

      You will never get the right answer if you ask the wrong questions.

    • Danno says:

      Funny, I’m in Cuba now and they are getting 6 hour a day power black outs…

      Isn’t Cuba a 3rd world country and also has baby formula but the USA doesn’t?

      Gee, wonder who is doing better at the moment? sarc/

      • seraslibre says:

        Danno – the baby formula sold in cuba is goat milk at best. And you can’t buy it at the store – you have to go to your neighbor’s house and extract it yourself.

        And regarding the rolling black-outs, this is much better than in prior years when they would only get power 6 hours a day.

    • Tom20 says:

      When the peasants are about to go without heat or ac….then the educated ones start pitching nuclear.
      Of course they say nothing about build times with the eco’s tying them up in the courts.

      • unamused says:

        “When the peasants are about to go without heat or ac….then the educated ones start pitching nuclear.”

        Chernobyl your Three Mile Island, Fukushima.

        Got to concentrate
        Don’t be distractive
        Turn me on tonight
        ‘Cause I’m radioactive

        When the peasants are about to go without heat or ac, it’s usually because the Texas power grid is failing again to enable yet another round of profiteering. Something the libertarians call ‘free markets’, i.e., freely plundered. Fortunately Texans are gullible and fall for it pretty reliably.

        Renewable energy is vastly more cost-effective than nuclear. Nobody ever got radiation poisoning from renewables, but then, everybody in the US has been exposed to something.

      • fajensen says:

        When the peasants are about to go without heat or ac….then the educated ones start pitching nuclear.

        Too clever by half, they are: Nuclear power will never scale to even a fraction of the 15 TW of electrical power the world uses today.

        If they could scale it, all the uranium would burned up in 80 years (assuming one could mine it all), but long before that, we run out of trace materials to build reactor vessels with. Which we can’t reuse because now they are transmuted and mixed with radioactive crap!

        Besides, with the current reliability records and going from about 500 to about 15000 reactors (assuming 10 GW each), one of them should cook off about every week (Thats actually somewhat green, they create nature reserves free of people).

        Those limitations are physics problems. Meaning that we need new physics to solve them.

    • fajensen says:

      Do the environmentalist really think there’s going to be enough solar, wind, batteries, etc to handle the growing demand?

      America, the worlds can’t do (and won’t do) country! Yes we do and yes there will be. These are all “money problems”, not “physics problems”.

      We would all be in real shit if it wasn’t for China commercialising solar cells, flow batteries, more or less, whatever “green” tech that MIT, Yale, and Stanford cooks up, and Americans then hate and claim “won’t work for reasons.”

      It’s concerning to see the country that more or less created the modern world developing frontal-lobe dementia, and proudly soiling itself with bullshit.

  6. So true says:

    What motorcycles are not hot?

    • andy says:

      Bicycles with motorcycle tires are hot now.

      • Anthony says:

        andy

        The electric bicycles, that all the delivery guys ride around on in my town, are seriously fast. Sometimes they actually use the pedals lol

        • c_heale says:

          Electric bike with a trailer is the future. Not cars. In my opinion.

        • Wolf Richter says:

          They have human-drawn trailers in places like India. Problem solved.

        • Old school says:

          Scooter design whether electric or gas is very practical. Mine has four places for carrying items 1. front bag hook 2.floorboard, 3. under seat, 4. back rack. Pretty easy to carry 40 items from grocery store.

          Mine has unusual feature of passenger seat that folds up into back rest that exposes large rack perfect for carrying a soft cooler.

        • YuShan says:

          In The Netherland (bicycle crazy country), they are now selling more electric bikes than push bikes.

        • YuShan says:

          I wonder if the West is going to look more like south east Asia in the future, where you have enormous amounts of scooters on the road.

          Are cars going to be replaced by electric scooters? It would definitely reduce traffic jam and air pollution in town and would save people tons of money too.

        • Dan Romig says:

          Best Buy is now selling electric bicycles. (On 20 May, I picked up a bit of BBY for my portfolio @ $70.56 per share.)

        • Augustus Frost says:

          “Are cars going to be replaced by electric scooters? It would definitely reduce traffic jam and air pollution in town and would save people tons of money too.”

          I visited India once, mostly in Delhi. There were a lot of cab motorized vehicles and bicycles with the raised bench; can’t remember the name.

          But when we commuted to Gurgon (the location of my company’s office), I don’t remember anything but car and trucks on the highway.

          In the US, I could see this (somewhat) for “localized” driving but not sure how practical it’s going to be with the distances Americans typically drive.

          I don’t see public transportation becoming a much better option either. Somewhat better, but nothing like where it’s actually a viable substitute. Those who push for it most almost never experience the inconvenience. They either live in/near the core or don’t use it at all.

          Where I live (metro Atlanta), there is a MARTA rail station about a mile from me but it’s still faster or about the same to drive the eight miles to my office when I need to go in. The traffic totally sucks here too, about 75 to 90 minutes roundtrip the last time I drove to work.

      • KGC says:

        Totally expect laws to change to allow taxation and licensing (also a tax) on electric bicycles in the near future.

        • Dan Romig says:

          KGC,

          As of now in Minnesota, the law is that a person must be 15 years or older to ride an electric bicycle.

          No license or registration is needed, but the distinction is that the bike must have a motor of less than 1,000 watts. A basic conversion is: 1 horsepower(E) = 746 watts.

          DanBob bicycle runs at about 350 watts of steady-state power output for an hour or so. Total mass of engine & machine = 100 kg.

        • Gattopardo says:

          Dan, nice power output you have. Pity they didn’t have SRMs ‘back in the day’.

          1000w in the hands of an unlicensed youth is crazy. I’d say all should be licensed and treated as motorcycles….because that’s what they are. It annoys me greatly when kids have the speed of a world class track rider and the bike handling skills of a novice.

        • Dan Romig says:

          Gattopardo,

          Thank you for the SRM reference. My output is probably not quite what I guessed when I checked out the SRM info. Perhaps around 300 is more accurate.

          Back in the day, I would have loved to have that tool to measure my output! Race weight was 98 kg. Opening lap in the Kilometer T T was 18.9 seconds on a 250 meter track. (13.98 seconds is 40 mph). Now the riders are in bigger gears, and launch in under 18 seconds for the first lap. Bikes are better. They are better too.

          Father Time is my competition from here on out. I’m doing what I can to stay in front of him for as long as possible.

          Thanks & take care …

    • The Real Tony says:

      Where I live no insurance company would insure a motorcycle.

  7. Rohry says:

    Drove through the local (Charleston, SC) Honda dealership today. Less than 10 new cars on the lot (a few could have been “demos”), in 2019 they had 200-250.

    They had 30-40% of the used cars they had in 2019, and half were full size trucks.

    The Volvo dealership looked full (same owner as Honda), some models are made here in South Carolina.

    Lexus and Porsche had no discernable new car inventory.

    • Depth Charge says:

      I drove by a Honda dealership in a small town while traveling a few months ago and there were like 6 cars in the entire parking lot. It almost looked like it was out of business.

      • Djreef says:

        Honda seems to be having real issues with supply. Noticed the same a few months ago while getting the wife’s CRV’s oil changed here in Houston. The service guys there were working the upsells hard.

        • Cold in the Midwest says:

          Same here in Ohio. Last time I visited a local Honda dealership the lot was about 30% full. And some of that 30% were not Hondas – they were used trade-ins of other brands.

    • Marcus Aurelius says:

      I and my son can not wait till Full Size Trucks can’t sell and they “can’t give them away”.

      He wants a Hemi Ram. Good for him. Gas is cheaper today than 1920-1964.

      My local Gas Station sells gas for 24 cents a gallon. Yes, 24 cents a gallon.

      He only asks that I pay in Silver Dimes. I buy 10 gallons and I only have to pay $2.40.

  8. stratus says:

    I was interested in buying a Prius. They are hard to find. I think the Corolla hybrid is close in EPA ratings. The Prius is made in Japan while the Camry and RAV4 are assembled in Kentucky. I think the Made in Japan models have better quality. I saw a non-hybrid Corolla with manual transmission offered. I would be interested to see if there will be a manual transmission hybrid offered. I imagine Toyota is prioritizing chips for their higher mark -up vehicles. Maybe when they have a couple months supply of SUVs sitting on lots the small cars will get priority for chips.

    • crazytown says:

      A hybrid replaces a transmission with 2 sets of electric motors and a planetary gearset to tie it all together. No such thing as a manual transmission hybrid since a hybrid doesn’t need a transmission at all. It’s pretty ingenious and and also quite simple, reliable, and smooth. It sure would be nice if Ford was still making the Fusion Hybrid. My 2015 will be driven as long as possible and then probably replaced with a Toyota.

      • ctcarver says:

        CT,

        The old Honda Insight hybrid had something like a 13 HP motor in place of the flywheel that also acted as the starter. These were made in 5 speed manual, and could get 60 MPG if you drove carefully on the highway.

        I had to replace a car in March. I ended up buying a 2019 VW Jetta. its a turbo 1.4L with direct injection and 6 speed manual. 10.5 to 1 compression on 87 octane gas. I have gotten 51 MPG on I5 going 72 MPH. I am pretty impressed, and the base model is MSRP ~$20k.

        • crazytown says:

          Yes, that Insight design is ancient. More akin to what many modern ICE cars do by turning off the engine at a stop. A lot of the MPG was due to low weight and aerodynamics. GM had its eAssist design that never really took off which replaced the alternator with a generator/motor.

          Wolf, yes I suppose it is a CVT but much more robust than the traditional CVT. Either way, there is no gear shifting going on.

        • VintageVNvet says:

          base model mid ’80s honda civic hatchback got well over 60 MPG,,, OVERALL,,, while tons of fun to drive with a manual and 1100 CC engine IIRC…
          seriously don’t know why ALL the various and sundry GUV MINT ”mandates” can continue to absolutely throttle the MPG of these very very economical types of vehicles.
          Cannot be because of ”safety” because of the, clear or should be clear if honest, information regarding driver incompetence causing most, if not the vast majority of ”accidents” in USA…
          Please Please Please,,, if anyone reading this is at all able to influence this, ALLOW the really and truly EFFICIENT vehicles back into USA,,, even if it takes a ”special” DL to be able to own and operate.
          Thank you!!!

      • Wolf Richter says:

        “since a hybrid doesn’t need a transmission at all.”

        That would be a classic hybrid such as a diesel-electric locomotive, where the diesel engine powers a generator which powers the traction motors that drive the wheels. This system has been around for many decades.

        But the engine in your Ford Fusion hybrid is mechanically connected to the wheels via a CVT (continuous variable transmission). But because it’s a CVT, it doesn’t “shift” like regular transmissions do. In addition, it has a small electric motor that is powered by a battery that is charged only through the regenerative braking system. There is no connection between the engine and the generator.

        • Dan Romig says:

          Yes, my 2013 Lexus RX450h has a 3.5 litre V6 and a CVT transmission.

          In the snow, and not crazy cold temperatures, with Blizzaks, it is perfect to drive in the city. Quick with AWD and instant torque, it pulls away from a stop very nicely. Good ground clearance too.

          Great mileage in slow city driving with the hybrid system doing its job.

      • fajensen says:

        One advantage of the hybrids is that it doesn’t stall.

        If one needs to suddenly accelerate, one just slams the right foot down and the electrical drive kicks in immediately and it doesn’t matter if one was in the right gear or not, the car will go.

        Uphill start is easy also.

    • IvanA says:

      Same as you I was looking for Prius last year, found none. I bought 2021 Corola Hachback, not hybrid, over 40 mpg, very consistent, I do not want hybrid anymore. My 3 Priuses were always having issues with batteries and complicated braking system, after 250K miles ;)

    • Nemo 300 BLK says:

      There’s a broker on the Lease Hackr forum in the marketplace subforum that frequently posts inbound Prius inventory. We bought a 2022 Tundra from him a few months ago. He moves about 100 Toyotas a month.

    • SpencerG says:

      My aunt had a Prius before she died. I used to pick her up in New Orleans and we would drive 600 miles to Dallas for family gatherings.

      Like all small cars it was a bit cramped and didn’t exactly offer a smooth ride (even on the interstates). Other than that it was OK. Gas mileage was great of course. She LOVED it.

  9. SoCalBeachDude says:

    I wouid suggest that the American car companies simply stop all of their production and simply close their doors and cease operations as all they make these days are inane, clumsy, gas-guzzling trucks that few have any interest in at all. Why wasn’t that totally obvious to them years ago? Why did they all stop making actual cars? What did they expect to happen, but for this sort of situation? Don’t they ever learn anything?

    • Happy1 says:

      Umm, F150 is the highest selling vehicle in the US for like 30 years running.

    • COWG says:

      “ I wouid suggest that the American car companies simply stop all of their production and simply close their doors and cease operations as all they make these days are inane, clumsy, gas-guzzling trucks that few have any interest in at all.”

      Kinda hard to gaze out the window and see the future when the view is blocked by plies of cash…

      • Apple says:

        That’s exactly what happened in 1972.

        US auto manufacturers have very short memories.

    • Gomp says:

      You live in your world. I’ll live in mine. I’ve always driven a truck and always will. It works for me. I like rural. Good luck with your urban in the near future. Btw. Lost a bit of respect in your last post.

      • Einhal says:

        What does rural versus urban living have to do with trucks? I prefer the country to the cities myself, but I also don’t drive a huge truck for no reason like 99% of pickup truck owners, who can’t remember the last time something has actually been in the bed or the last time they’ve towed something.

    • roddy6667 says:

      If there is no interest in gas-guzzling trucks, why is there a constant stream of them going by my home 24/7?

  10. Robert Gully says:

    Hybrids are the best for the environment according to many car manufacturers but the politicians have listened to the environmentalists and so we are stuck with EV’s

    • Wolf Richter says:

      Nonsense. You’re not stuck with EVs. Buy a hybrid if you want one. We have one. Works great. It’s big and it gets ca. 40 mpg in the city. But we’re buying gasoline at $6, and that gets old, even at 40 mpg. And performance is shitty, compared to an EV. EVs are awesome to drive, our hybrid isn’t, it’s just relaxing to drive.

      • crazytown says:

        Hey at least the Fusion Hybrid only takes 10 or 11 gallons to fill. Always fun to pull up to the pump and see the previous person putting 25 or 30 gallons in their car. Yikes.

        For various reasons, home charging wouldn’t be very convenient for me on an EV. I’m all aboard two trains – either high performance ICE or hybrid. GM and Ford still have performance cars covered (I would LOVE an Explorer ST), but for hybrids now you have to look elsewhere. At least Mary Barra’s visions/delusions have really boosted GM’s stock up to the stratosphere over the past 5 years. Oh wait, the stock is back to 2013 levels and they have less than $60b mkt cap.

        • NBay says:

          I’m still waiting for the creative low-riders to make a dancing tailgate….that 3-way folding stuff is just begging for it….good potential for some nasty sexual moves, too, if choreographed right.

  11. ace says:

    Bought a fixed tdi after dieselgate. Rippin little wagon.

    • Nemo 300 BLK says:

      I bought a new 2005 Passat TDI and it ran 17.9 in the 1/4 mile stock.
      I put a Rocketchip Stage 3 tune on it and it ran 16.4 in the 1/4.
      I then add Kerma TDI race injectors and got it running mid 15’s. Then, I had Rocketchip crank my boost up from 26 to 29 PSI. It ran 14.9 before I smoked the turbo. Even with my foot on the floor down the 1/4, it would get 17 mpg on the readout.

      I ran the VIN through Carfax last year and the car is still running in California.

  12. David Hall says:

    The new smaller economy cars have been selling out for sometime. The auto makers lacked chips, thus they concentrated on making larger high profit margin vehicles. I recently bought a Ford compact crossover SUV. As a retiree I do not drive much. I got an insurance discount as it has radar sensors, a backup camera, adaptive cruise control, lane centering, automatic braking, navigation screen, bluetooth, etc. I had a Chevy subcompact and liked the gas economy and ease of parking, but traded it for a vehicle with more leg and hip room after a hip injury. A friend used to ride the public transportation to work, then rented a car on the weekend when she wanted to go shopping.

  13. Flea says:

    The only reason there pushing EV is because u can’t shut or slow down a power plant at night ,so you work all day charge car all night = problem solved ,wish the idiots would tell the truth

    • saraskinas says:

      like.. how do you even come up with this?? power plants are generating electricity for a century now, EVs were introduced the last decade. how did they deal with excess power before? push TVs on the public? push the electricity off the edge of Earth? or were they heating the climate?

  14. Island Teal says:

    After reading the comments I will come back to the theory that many in the Electronic Industry share. It is that the “chip shortages” that are blamed for so many Supply Chain Shortages are a convenient contributor to the record profits enjoyed by many companies of recent that are able to charge MSRP+ or enacting ongoing price increases.

  15. otishertz says:

    Is it ok to say now that all these wild distortions in all markets are the product of the insane global pandemic money blizzard?

    • Anthony says:

      Yep, on top of the small amount your government and the Fed spent…the Brits spent 450 billion pounds. Europe and the ECB spent so much, that they have to keep interest rates at -0.25% or the whole lot just falls apart. The good news for the ECB(especially Spain and Italy) is that they always have Germany to bail them out…..

      • c_heale says:

        No imo. They never fixed any of the problems from 2008, just covered them up by printing money. Now it’s too late and we’re all going to get it good and hard.

    • Augustus Frost says:

      No, because there were plenty of distortions pre-pandemic.

      It’s not like the economy, financial system, or government budgets were remotely normal and/or sustainable.

  16. Mike R says:

    Toyota lot near us in well to do suburb has MAYBE 1/3rd of what it used to have on the lot. Used trucks and other vehicles, line the perimeter of the lot. The entire middle of the lot is empty. This is the worst time in the past decade to be buying a car. We bought 3 cars in 2019, pre-pandemic, and got great deals on every one. Well below MSRP on 1 new one, and very good pricing on 2 used. I used one was only barely used with around 500 miles on it. Came with CPO long term warranty. Better than new warranty. Every one of these vehicles could be sold right now, for more than we paid. When I purchased those cars, it was to keep them minimum 10 years. Little did I know back then, that Covid would strike a few months later, and make car buying suck worse than ever.

    • COWG says:

      My new Tacoma a month ago was bought below msrp… I got the low end version… by my standards, it wasn’t very low end at all,with all the stuff that came standard on it… enough tech to help me, but not so much it distracts me…

      Came with 10yr/100k powertrain warranty, 5 year free maintenance, 5 year roadside, paint and interior protection, has the very thin urethane film on the bug/rock target surfaces, full dark tint on all windows, 30 mpg v6…rwd..

      I’m extremely happy with it…

      Didn’t realize until after I bought it how much the Tacoma can be modded…

      There are guys out there who know this truck better than the people who built it, I think…

      I bought it entirely on line and was impressed at how smooth the experience was…

  17. Michael Engel says:

    1) Dealers inventory is separate from mfg inventory. If u combine them the picture might be different.
    2) There are no 50K Camry waiting in parking lots because of chip shortages.
    3) Ford, GM… can import midsize sedan from overseas plant, producing in deflated currencies, selling here in USD, making profit, –
    from S.America, Mexico, China, England, Germany, India…
    bring them home, stupid Ford.
    4) Wall street will reward Toyota if they bring Corollas, Lexus… from Japan with the rising USDJPY

  18. John H. says:

    This is off subject, but I hope to see some Richter commentary on the Nick Timaraos article in todays WSJournal concerning Fed losses. (Higher Rates Raise Risk of Future Fed Losses, 2/23/22)

    I know that “losses” on bonds held by Fed are not an existential issues for the Fed, but doesn’t it beg the question: where are the “reserves” at the Federal Reserve System?

    Now, back to the car-talk…

    • unamused says:

      ‘where are the “reserves” at the Federal Reserve System?’

      Those have been offshored, as ‘Global Banks Privately Prepare for ‘Dangerous Levels’ of Imminent Civil Unrest in Western Homelands’.

      The availability of new and used vehicles is also a problem. But not for me. The Bentley turns 70 in a couple of years but runs on hydrogen.

    • David W. Young says:

      John, very good observation to help dispel the notion that the Fed never loses in its financial market manipulations. The Fed is sitting on a lot of Treasuries and Mortgage Backed Securities that carry yields that their interest rate increasing policies in the months ahead are going to clobber as to market prices of same. Yields UP, prices of ZIRP & QE era debt instruments, DOWN.

      Now we are assuming in this analysis that the Fed is going to have to sell some of its boatload of Balance Sheet Debt prior to maturity, vs. the Run-Off approach that will take some 10 to 11 years to accomplish even a $4 Trillion reduction. And why will the Fed have to be more aggressive in its reduction of its ridiculously large balance sheet: The move to even 5% in short-term Fed Funds rates will do little to quell the inflationary beast eating all Americans’ lunch right now.

      So as the Bond Vigilantes have already shown in the 2021, 4th Quarter, and 2022, YTD debt markets, a slow drawing Fed will get mowed down at the Okay Yield Corral. The Fed is starting to look like a Tiger that needs dentures. Inflation erosion is going to reprice Debt Instruments at this juncture, not to mention a sea of defaults and bankruptcies going forward, and the Fed can piddle all it wants, but market and political pressures will be building as they dawdle regardless.

      • COWG says:

        Can’t the Fed remit any treasury back to the govt and have it “disappeared “…

        And wouldn’t that also reduce the money supply…

        I thought they could versus trying to sell and take a “loss”….

        I’m sure it’s more complicated than that but I don’t know…

        Although isn’t it along the same lines as the “ Trillion Dollar Coin”…

        • Augustus Frost says:

          Not going to happen. It would be a direct hit to the FRB’s capital since the offsetting liability remains.

        • John H. says:

          AF and COWG-

          Something is amiss when the “banker’s bank” has a capital to assets ratio of 0.45%. According to the 5/19/22 FR H.4.1:
          – Federal Res. Banks Total Assets: $8.945 Trillion
          – Capital: $41 Billion
          So capital as percent of assets = 0.45%…..Less than 1/2 of 1%

          I don’t seem to understand the intricacies of modern central banking (modern since 2008, as described in Timiraos’ article cited above), but I’m not convinced that anyone else does either.

          If there were ever an institution that was on the SIFI list, the Fed seems to be it.

        • Wolf Richter says:

          John H.

          The Fed’s capital is limited by Congress, and if its capital exceeds the statutory limit, the Fed has to remit the excess to the Treasury Dept., which it did in January for 2021:

          https://wolfstreet.com/2022/01/15/the-fed-released-its-preliminary-financial-statement-for-2021/

        • John H. says:

          Does the Fed’s capital account have a lower limit, below which it cannot fall?

          Or conversely, is there no size limit (statutory or otherwise) to the Fed’s balance sheet assets?

          I know that the though it’s a “banker’s bank” that it is not treated like other commercial banks. But it surely is subject to some controls that limit its growth and leverage, isn’t it?

  19. Libdis says:

    Domestic full-size pickup trucks: Ram 1500, Chevrolet Silverado and Silverado HD

    This is less about the price of gas and more about the absolute junk they build.

    Check the Tundra/F150. Those are the trucks that real people doing real work buy.

    People buy Rams and Chevy’s because they are cheaper. They are cheaper for a reason and they are usually just Payment Princesses.

  20. joe2 says:

    Not surprising. Markets and manufacturers yanked around by wishy-washy out-of-touch-with-reality politicians who live in a fantasy land of their own imagination. Consider consequences? Ha!
    It’s fun to live in La La Land for a short drunken lark, but ignore reality long time at your own risk.

    • unamused says:

      “Markets and manufacturers yanked around by wishy-washy out-of-touch-with-reality politicians who live in a fantasy land”

      You have it backwards. The US is run by corporations, and politicians represent their interests. There are many examples. Only half ever govern in the interests of actual people, at most, and those are expected to be repressed next year.

      • NBay says:

        Yeah, we are being set up for another round of “law and order”, allowing more austerity. But don’t worry we are all still free to be hungry and outside anywhere we want, just not within eyesight of those who haven’t been completely freed yet.
        I’ve drawn my own red line at going back to Bible School…..I served my time there already.

    • Wolf Richter says:

      That bonce was LOOOONG overdue, given the massive and relentless selloff. Read all our comments where we made fun of the PPT getting drunk at the bar instead of buying stocks, that’s how bad it had gotten.

  21. David W. Young says:

    I will bet a Hamster and a bag of peanuts that Ford will reintroduce an redesigned Fusion by the 2024 model year. Sometimes these guys in Detroit have to be hit over the noggin with Market Realities, but millions of dollars have already been spent on a re-designed Fusion (even an ICE version getting 26 mpg City/Mixed driving will be snapped up by price and cost to operate consumers). High gasoline and diesel prices are not going away anytime soon, even as demand softens in the quarters ahead.

    Just produce a FWD machine and kill the idle engine kill feature that kills both engines and batteries over time. And drop some of the electronic Fun and Games that add mightily to cost (and repair bills!) and provide very arguable benefits during each mile of driving. A 4-banger EcoBoost engine is okay as long as the direct fuel injection system and turbo-chargers are improved from prior versions.

  22. Tony says:

    I don’t like SUV’s. My last 2 cars were a BMW 5-Series and then a Mercedes E350 (sold with 170K miles). My newest car I bought last year is a Camry Hybrid. What a great sedan! 40-45 mpg, and built solid. Best decision I ever made. The service costs alone on the German cars was insane.

  23. Dave Kunkel says:

    Tesla seems to be doing OK.

    In the first quarter of 2022 in California Tesla sold 21,812 model Y’s and 21,506 model 3’s. The next best selling car was the Toyota RAV4 with 15,990 cars sold.

  24. tyty says:

    China ppl still mad at Japan from last war.

    • sam says:

      Correctmondo.
      Japan will never say “Sorry” as the Chinese know the Japanese position will always be “not sorry”. Ymmv.

  25. Taxman100 says:

    Go woke, go broke.

    Corporate America is all about being woke. Rather than offer the best products and services to their customers, they would rather scold them for not thinking in a manner they deem correct.

    I was always a “Buy American” kind of guy, but in the last decade, I’ve realized in many ways companies headquartered in the United States act less “American” than companies like Honda, Toyota, etc. They offer substandard products and expect Uncle Sam to carry their water when they screw up. Ford is the least bad, but GM is a total globalist cabal train wreck.

    I’ve still got my 20-year-old Grand Marquis, along with my 22-year-old Honda Accord. I might order a Maverick hybrid and wait the 9 months to get it,.

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