Supply chain woes caused US auto sales to fall 8% last year
By Tom Krisher in Detroit
DETROIT (AP) — Shortages of computer chips and other parts continued to hobble the U.S. auto industry last year, contributing to vehicle sales dropping 8% from 2021 to their lowest level in more than a decade.
But there’s good news for consumers in the gloomy numbers: Vehicle supplies on dealer lots are growing, albeit slowly, and automakers expect at least a small easing in prices this year as inventories grow.
Automakers reported Wednesday that they sold 13.9 million cars, trucks, SUVs and vans last year as the parts shortage limited factory output amid high demand for new vehicles. It was the lowest sales number since 2011 when the economy was recovering from the Great Recession.
But sales were up slightly in the fourth quarter and inventories grew as parts supplies improved enough to increase production a little. Analysts are now expecting sales to grow by roughly 1 million to around 14.8 million this year as demand remains strong. But they’ll still be far short of the normal 17 million per year before the pandemic.
With many models still in short supply, though, the average new vehicle price rose 2.5% in December to a record of just over $46,000, according to J.D Power.
There are signs, however, that prices may be starting to ebb a little as inventories expand.
Toyota, for instance, finished the year with just under 24,000 vehicles on Toyota and Lexus brand dealer lots nationwide. That’s up from about 19,000 at the end of 2021, but still far short of the 300,000 during normal years before the pandemic.
The improvement, although small, is allowing consumers to haggle a little on some slower-selling vehicles such as sedans, and even some luxury vehicles. But they’re still getting top dollar for gas-electric hybrids and other more popular vehicles that are sold before they arrive on lots, said David Christ, general manager of the Toyota Division.
For most of last year, people who wanted new vehicles had to pay sticker price or above and take whatever models and colors dealers could get. But dealers have told Christ that changed a bit in the past two or three months for models that aren’t as popular. Plus, he said more people are interested in lower-cost vehicles because inflation and higher interest rates are taking a bite out of their budgets.
“They’re coming in and saying, ‘Hey, can I get a deal here?'” Christ said. “I do think that on some vehicles, not just in our brand, and across the industry, there has become a little more of a buyer’s market where the customer can negotiate.”
Whether that holds up all year remains to be seen. If demand stays strong and people are willing to pay sticker price, then dealers will get that, Christ said. But if demand wanes or supplies increase dramatically, discounts could rise and prices could drop a bit.
Jessica Caldwell, executive director of insights at Edmunds.com, said Toyota’s experience is likely to repeat itself through the industry with small price decreases on some models.
“There isn’t as much disposable income to be put into a vehicle,” she said. “We’ve seen prices high before, but we’ve never really seen higher prices with the (higher) interest rates.”
But electric vehicles and other hot sellers will remain expensive because people want to buy them now, she added.
Caldwell doesn’t see vehicle supplies or prices returning to pre-pandemic levels this year, and she’s not sure if we’ll ever get back to 2019 levels.
The computer chip shortage dates to the spring of 2020, when automakers were forced to shut down factories due to rapidly increasing COVID-19 cases. Chip makers shifted production to consumer electronics to feed a computer and gaming sales boom when people were stuck at home. When the auto plants restarted earlier than expected, chip makers weren’t making as many semiconductors for automobiles, which must be made to withstand vibration and huge temperature extremes.
Auto chip production has improved, but still isn’t back to pre-pandemic levels, so auto plants still aren’t back to their full output.
As a result, the 13.9 million vehicles that automakers sold last year was about 1.2 million below 2021 numbers, according to Motorintelligence.com.
General Motors, with full-year sales up 2.5%, retook its traditional spot as the nation’s top selling automaker. Toyota, which won the crown in 2021, saw its sales fall 9.6% last year. Ford reports sales on Thursday.
Sales at Stellantis, formerly Fiat Chrysler, dropped 13%, while Honda sales plummeted 32.9%. Hyundai posted just under a 1% increase to outsell Nissan, whose sales tumbled 25.4%. Kia sales fell 1.1% for the year, while Subaru was down 4.7%.
Electric vehicle sales hit more than 807,000 last year, up almost 65% from 2021.
Pickups and SUVs were 77.3% of sales while cars dropped to 22.7%.
Ford says EV unit losing billions, should be seen as startup
Ford’s Chief Executive Engineer Linda Zhang unveils the Ford F-150 Lightning on May 19, 2021, in Dearborn, Mich. Ford Motor Co. announced Thursday, March 23, 2023, that their electric vehicle business has lost $3 billion before taxes during the past two years and will lose a similar amount this year as the company invests heavily in the new technology. (AP Photo/Carlos Osorio, File)
By Tom Krisher in Detroit
DETROIT (AP) — Ford Motor Co.’s electric vehicle business has lost $3 billion before taxes during the past two years and will lose a similar amount this year as the company invests heavily in the new technology.
The figures were released Thursday as Ford rolled out a new way of reporting financial results. The new business structure separates electric vehicles, the profitable internal combustion and commercial vehicle operations into three operating units.
Company officials said the electric vehicle unit, called “Ford Model e,” will be profitable before taxes by late 2026 with an 8% pretax profit margin. But they wouldn’t say exactly when it’s expected to start making money.
Chief Financial Officer John Lawler said Model e should be viewed as a startup company within Ford.
“As everyone knows, EV startups lose money while they invest in capability, develop knowledge, build (sales) volume and gain (market) share,” he said.
Model e, he said, is working on second- and even third-generation electric vehicles. It currently offers three EVs for sale in the U.S.: the Mustang Mach E SUV, the F-150 Lightning pickupand an electric Transit commercial van.
The new corporate reporting system, Lawler said, is designed to give investors more transparency than the old system of reporting results by geographic regions. The automaker calculated earnings for each of the three units during the past two calendar years.
Model e had pretax losses of $900 million in 2021 and $2.1 billion last year, and it is expected to lose $3 billion this year. In the past two years Ford has announced it would build four new battery factories and a new vehicle assembly plant as well as spending heavily to acquire raw materials to build electric vehicles.
By the end of this year, the company based in Dearborn, Michigan, expects to be building electric vehicles at a rate of 600,000 per year, reaching a rate of 2 million per year by the end of 2026.
Ford Blue, the unit that sells internal combustion and gas-electric hybrid vehicles, made just over $10 billion before taxes during the last two years. Ford Pro, the commercial vehicle unit, made $5.9 billion during those years, the company said.
For this year, Ford expects Ford Blue to post a $7 billion pretax profit, modestly better than last year. Ford Pro is expected to earn $6 billion before taxes, nearly double its earnings last year, Lawler said.
Ford was to present the new structure, announced last March, to analysts and investors on Thursday. Other business units include corporate, Ford Credit and Ford Next, a new business incubator. Shares of Ford rose 1.8% in Thursday morning trading ahead of the presentation.
Lawler said the company is changing the way it does business, not just doing an accounting exercise.
“After 120 years, we’ve essentially re-founded Ford,” he said. “We’re embracing technology and competitive disruption in our industry, fundamentally changing how we’re thinking, how we’re making decisions, and how we’re running the company.”
GM to stop making the Camaro but a successor may be in works
Justin Allgaier takes his Camaro through its paces as he drives in the NASCAR Xfinity Series auto race at Pocono Raceway, July 23, 2022, in Long Pond, Pa. The Chevrolet Camaro, for years the dream car of many teenage American males, is going out of production. General Motors, which sells the brawny muscle car, said Wednesday, March 22, 2023, that it will stop making the current generation early next year. (AP Photo/Matt Slocum)
DETROIT (AP) — The Chevrolet Camaro, for decades the dream car of many teenage American males, is going out of production.
General Motors, which sells the brawny muscle car, said Wednesday it will stop making the current generation early next year.
The future of the car, which is raced on NASCAR and other circuits, is a bit murky. GM says another generation may be in the works.
“While we are not announcing an immediate successor today, rest assured, this is not the end of Camaro’s story,” Scott Bell, vice president of Chevrolet, said in a statement.
The current sixth-generation Camaro, introduced in 2016, has done well on the racetrack, but sales have been tailing off in recent years. When the current generation Camaro came out in 2016, Chevrolet sold 72,705 of them. But by the end of 2021 that number fell almost 70% to 21,893. It rebounded a bit last year to 24,652.
GM said last of the 2024 model year of the cars will come off the assembly line in Lansing, Michigan, in January.
Spokesman Trevor Thompkins said he can’t say anything more about a future Camaro. “We’re not saying anything specific right now,” he said.
The company, he said, has an understanding with auto-racing sanctioning bodies that the sixth-generation car can continue racing. GM will have parts available and the Camaro body will stay on the race track, he said.
NASCAR said that because the Generation 6 Camaro was in production when GM originally got permission to race, it remains qualified to race in NASCAR Cup and NASCAR Xfinity Series races.
GM will offer a collector’s edition package of the 2024 Camaro RS and SS in North America, and a limited number of high-performance ZL-1 Camaros. The collector’s edition cars will have ties to the first-generation Camaro from the 1960s and its GM code name “Panther,” the company said without giving specifics.
GM’s move comes as traditional gas-powered muscle cars are starting to be phased out due to strict government fuel economy regulations, concerns about climate change and an accelerating shift toward electric vehicles.
Stellantis, will stop making gas versions of the Dodge Challenger and Charger and the Chrylser 300 big sedan by the end of this year. But the company has plans to roll out a battery-powered Charger performance car sometime in 2024.
Electric cars, with instant torque and a low center of gravity, often are faster and handle better than internal combustion vehicles.
Stellantis, formed in 2021 by combining Fiat Chrysler and France’s PSA Peugeot, earlier this week announced the last of its special edition muscle cars, the 1,025 horsepower Dodge Challenger SRT Demon 170. The company says the car can go from zero to 60 mph (97 kilometers per hour) in 1.66 seconds, making it the fastest production car on the market.
Stand for the ‘common person’ Pierre Poilievre tells faithful gathered in Ottawa
City of Red Deer puts out call to private owners interested in selling or leasing property for integrated homeless shelter
Pop Quiz: You Know You’re A Woke Punchline When…
These are the three things you should expect in the federal Liberals’ upcoming budget
Bruce Dowbiggin2 days ago
Hockey Tolerance Is A Two-Way Street, Not A One-Way Road
Business2 days ago
Unprecedented construction needed in B.C. to offset record immigration: Report
Justice2 days ago
Provincial police officer killed during attempted arrest northeast of Montreal
Business2 days ago
Bankman-Fried charged with paying $40M bribe to China
Business2 days ago
Federal budget 2023 includes $59.5 billion in new spending, looks to increase revenue
Crime2 days ago
What we know about the Covenant school shooting in Nashville
Alberta2 days ago
‘A miracle’: Advocate says help being planned for victims of Calgary house explosion
conflict2 days ago
Amnesty: West’s ‘double standards’ fuel Mideast repression