Shopping for a new car? Have you considered waiting until 2023? All that and more in The Morning Shift for April 18, 2022.
1st gear: Car companies can get away with it
Automakers have been desperate for years—decades—to keep prices down to remain competitive in the marketplace. But what if… all automakers increased their prices at the same time? What if they all started producing only their most expensive, highest-margin models? What would motivate them to lower prices again?
Anyway, here’s a message from the Wall Street Journal from auto industry pundits and insiders who say they just can’t find a way to bring prices down any time soon:
“This could be years” before dealer inventories recover, said Steve Center, operations manager for Kia’s US business. “You won’t see any incentives because we’re still going to sell whatever we can make.”
Automakers went into this year optimistic that chip shortages would begin to ease. But it continues to sporadically restrict vehicle production worldwide, along with other disruptions, from the war in Ukraine to Covid-19 restrictions in China.
[…]
Even as automakers try to create buzz with new showroom offerings, a prolonged period of low inventory levels continues to leave car buyers with few good alternatives and keeps prices high.
After soaring to record highs, the amount Americans have been paying for new vehicles has shown some signs of stabilization in recent months. In March, the median transaction price — or price paid outdoors — declined slightly for the third straight month to about $43,700, according to JD Power.
Still, it’s about 26% higher than before the pandemic, when the average transaction price reached $34,600 in late 2019, the research firm has reported.
As long as the car companies get away with high prices, I see no end.
2nd gear: BMW says it won’t cut jobs in the EV transition
A reminder that companies that blame things for job cuts are usually bullshit – they can prioritize preserving jobs if they wish. Here, BMW says it won’t blame the transition to battery-powered cars for job cuts, as the Financial Times reports:
BMW won’t cut a single workforce as it transitions from internal combustion engines to electric models, the chief executive has promised, even as economists predict tens of thousands of job losses across the industry.
“We will not have any job cuts as a result of the transformation,” said Oliver Zipse. “At the end of the day, possibly as early as this decade at our Munich plant, there will be all-electric production without anyone losing their job.”
His comments come as Europe’s auto sector and leading economists warn that plans to ban petrol and diesel cars will lead to mass unemployment.
In general, electric cars have fewer parts than internal combustion engine vehicles. In theory, electric vehicles also require less maintenance. Parts suppliers have been claiming that job cuts are coming and I don’t see why we can’t have promises of jobs during the transition period.
3rd gear: 2023 Kia Niro EV in 50 states
I drove the current Kia Niro EV last week and really enjoyed it in Southern California with warm weather and lots of chargers. I wonder what the car would look like in Topeka, Kansas? Or Lincoln, Nebraska? Or Minot, North Dakota? Naturally! Now the Niro EV is set to go on sale in all 50 states, according to Automotive News:
The second-generation 2023 Kia Niro electric crossover, one of three available electrified variants, will go on sale in all 50 states in the US this summer, the automaker said last week. The current generation of electric vehicles are only sold in certain states.
“Part of our electrification strategy is to sell electric cars everywhere, not just to comply with regulations and exempt states or standard California states,” said Steve Center, COO of Kia America. “People want electric cars across the country.”
4th gear: Ford down 19 percent in the first quarter in China
We reported that GM was down about 20 percent in the first quarter in China, so it’s perhaps unsurprising that Ford would decline by the same amount. From Automotive News China:
Ford Motor Co. and its joint ventures sold about 125,000 vehicles in China in the first quarter, down 19 percent from the same period last year.
Ford’s China unit blamed the ongoing shortage of semiconductor chips and the negative impact of renewed coronavirus outbreaks in the country.
Lincoln deliveries for the period rose 0.8 percent to 19,471, and Ford-branded passenger cars fell 17 percent to 46,719.
5th gear: The Chinese SUV Hongqi Super Luxe goes on sale in Israel
I’m delighted that China’s most dazzling car brand managed to build a Cadillac Lyriq ahead of Cadillac. You can see the thing on Car News China and cover the launch of the model in Israel:
Israel is not the first country Hongqi is exporting to. In September 2021, Hongqi held a ceremony to launch E-HS9 in the Norwegian market and announced its entry into the European market. Hongqi also exports to other countries such as Russia, Kuwait and the United Arab Emirates.
As part of Hongqi’s global strategy, European users will gradually familiarize themselves with the Hongqi brand through the E-HS9 model, starting from Northwest Europe. In the future, Hongqi plans to launch small and medium-sized SUV and sedan products to enrich its product range in the European market and customer needs.
Conversely: I always respect a plan that only…
Let’s see what happens if we blow up a really big bomb?
Neutral: How are you?
I’ve planted my tomatoes, aubergines and some herbs for this spring. Buds are popping on the trees outside my window.