Average price of new cars exceeds US $ 41,000 and hits record high – Transportation

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AVERAGE NEW CAR PRICE EXCEEDS US $ 41,000, REACHES RECORD

Buying a new car has never been more expensive than it is right now, according to the latest sales forecasts from JD Power and LMC Automotive. The average transaction price of new cars sold in July 2021 hit a record high of $ 41,044 (all amounts are in US dollars). This broke the previous record of $ 39,942 set the previous month.

A rare confluence of factors continues to drive up new and used car prices due to high demand and limited supply. “Too few vehicles in inventory means that the pace of sales in July is well below levels seen earlier this year,” said Thomas King, president of the data and analytics division at JD Power, in a statement. communicated. “Conversely, lack of inventory is driving vehicle prices to record levels as manufacturers and retailers continue to cut discounts. “

Cash backs, low APR financing, and other ways to entice customers to consider lingering sloppy designs on dealer lots are at an all-time low as dealers struggle to fill the lots. This is mainly due to the continuing shortage of tiny semiconductor chips used in various components of new cars. The pandemic has forced automakers to cancel orders amid recession concerns, and growing demand for electronics during door-to-door orders has redirected global supply away from cars.

Dealers currently have 30%, or 932,000 vehicles for sale now compared to July 2019, when there were 3.1 million new cars for sale. When new cars arrive in batches, they now come out within a month; Around this time last year, new cars sat on dealership lots for an average of 75 days before being purchased. This turnaround is another record. Incentives delivered to customers reached an all-time high of 4.8% of average MSRP. The average incentive is $ 2,065 off the sticker price, which is a decrease of $ 2,170 from a year ago, when dealerships and automakers were desperate to move vehicles from the lots so that the full extent of the pandemic was taking place. The imbalance between supply and demand will not be corrected anytime soon. Overall sales are expected to be around 15 million this year, up from 16.9 million in 2019, and 300,000 units compared to the annual forecast last month, meaning supply remains limited. “Inventory levels will not improve significantly in August and the pace of sales will be depressed as many buyers cannot find the vehicle they want,” King said. “However, buyers who find the vehicle of their choice will pay higher prices.”

Car dealers and manufacturers have everything to gain. “Manufacturers and retailers will realize extraordinary profits on every unit sold” to make up for the loss in volume, according to forecasts. Dealer profit per unit is expected to break another record at $ 4,260, the first time the metric has exceeded $ 4,000 for the month. Trucks and SUVs top the list, a broad classification that accounted for 76.5% of new car sales in July. Many of the more popular models come with dealer mark-ups known as “market tweaks” ranging from $ 10,000 MSRP on a 2021 Ford Mustang Mach-E to $ 25,000 on a 2021 Honda Civic Type R. Social media are full of puffy stickers, even for a 2021 Mitsubishi Mirage. That’s over 30% on a budget car that doesn’t cost more than $ 18,000.

Help may be on the way. Even if used car prices remain high, the situation is expected to calm down, with wholesale prices declining slightly in July for the first time since December 2020, according to JD Power. When it comes to buying a car, patience pays off; impatience pays more.

Source: The Automotive Connection

INDUSTRY CHIPS FAILURES CONTINUE

Chip Crisis Threatens To Cut Auto Production By 7.1 Million Cars

The global semiconductor shortage will cut global auto production by 7.1 million vehicles this year, and supply disruptions linked to the pandemic will hamper the industry until next year, IHS Markit said. The chip shortage will not stabilize until the second quarter of next year, with a recovery in the second half, IHS said in a report Thursday. The bleak outlook is further proof that the flea crisis is far from over. And the research firm’s forecast does not include the latest cuts from Toyota Motor Corp., which plans to briefly halt production at 14 factories next month and cut production by 40 percent.

Source: Bloomberg

Volkswagen’s bumpy restart

Volkswagen AG factories are set for a bumpy restart after the traditional summer break as the auto industry remains in the grip of a chip shortage that recently engulfed Toyota Motor Corp. VW’s Wolfsburg plant, the world’s largest employing some 60,000 people, will restart with a single shift next week from Monday to Friday, Europe’s largest automaker said. Audi, the biggest contributor to the group’s profits, will extend the summer vacation by one week at its two factories in Germany, because the supply of semiconductors remains “volatile and tight”.

Source: Bloomberg

Latest Microchip Shortage Figures: Toyota Cuts Adding to the Roll

Production cuts announced by Toyota last week have resulted in a significant increase in the number of vehicles lost globally due to the resurgence of COVID-19 infections around the world and an unyielding microchip production capacity. According to AutoForecast Solutions’ most recent report, automakers have cut an additional 481,707 vehicles from planned production schedules due to chip shortages. Toyota was behind the top 10 plant cutbacks, with affected plants in North America, Japan and China.

Source: Automotive News

And now … Volvo

Volvo Cars, owned by Chinese company Geely Holding, will halt production at its Swedish plant in Torslanda, a suburb of Gothenburg, over the next week due to the shortage of semiconductor chips, he said. Monday. A global chip shortage over the past year has caused a significant delay in manufacturing activity and forced several automakers to cut production. “Due to the current material shortage situation, triggered by a combination of global semiconductor shortages and new outbreaks of Covid-19, Volvo Cars has decided to suspend production at Torslanda for the week of August 30 to 3 September, “Volvo Cars said in a mailed e-statement.

Source: Reuters

Bosch Says Auto Industry Semiconductor Supply Chains No Longer Work

German technology and engineering group Bosch, which is the world’s largest supplier of auto parts, believes the semiconductor supply chains in the automotive industry are no longer fit for purpose amid shortages world of chips is raging. Bosch board member Harald Kroeger told CNBC’s Annette Weisbach in an exclusive interview on Monday that supply chains have collapsed in the past year as demand for chips in everything from cars to PlayStation 5 and electric toothbrushes, has increased worldwide.

Source: CNBC

Taiwan tries to reassure

Taiwan is doing all it can to alleviate the global semiconductor shortage, Economy Minister Wang Mei-hua said on Tuesday after talks with the new de facto US ambassador in Taipei, an issue that has slowed some lines of business. automobile production. Last week, U.S. Democratic Senators from Michigan and Ohio called on the Taiwanese government to help alleviate the shortage, as the island is a major producer of semiconductors and is seen as a focal point. efforts to resolve the problem.

Source: Reuters

FORD’S LITTLE MAVERICK TRUCK ATTRACTED 100,000 RESERVATIONS

Ford Motor Co.’s new small truck, the Maverick, received a lot of interest early on, with hybrid pickup supplies exceeding 100,000 and demand coming from California markets which generally favor imports. Reservations are non-binding and do not require a deposit, but Ford is confident they will turn into orders as they did with a similar system put in place to generate interest in the electric Mustang Mach-E and the Bronco SUV relaunched. Ford is bidding entry-level import buyers with the Maverick, which starts at under $ 20,000 and gets 40 miles per gallon with the standard gasoline-electric hybrid version.

Source: Bloomberg

TOYOTA: MANDATORY UPDATES, FASTER PRODUCT CYCLES, GREENER CARS

Toyota’s top digitalization guru touts great advancements in the application of software and connectivity services, including faster product cycles and more fuel-efficient cars. Some of the achievements will hit markets this fall, when the second-generation Lexus NX arrives. The redesigned compact crossover boasts live update capability, while the hybrid version has a predictive efficiency feature that helps optimize battery usage.

Source: Automotive News

THE FLEET OF MERCHANTS TO EXTEND THE VEHICLE CHARGING INFRASTRUCTURE

The fleet space seeks to stay “up to date” with the most recent vehicles entering the industry. On Wednesday, Merchants Fleet announced a partnership with Enel X – the advanced energy services business arm of the Enel Group – to meet the infrastructure needs of the electric vehicle (EV) industry. As part of the partnership, Enel X will provide Intelligent Electric Vehicle Power Equipment (EVSE), installation and charging infrastructure to merchant fleet customers to support fleet electrification nationwide.

Source: automatic remarketing

FAIR FINS SUBSCRIPTION, RENTAL PROGRAM IN THE PIVOT TO MARKETPLACE MODEL

The used vehicle subscription service Fair has stopped signing new subscription and rental customers as the company considers a possible bankruptcy filing and prepares to convert its business to a third-party market. The Santa Monica, Calif., Based company plans to re-launch as a digital vehicle market in early 2022, with the first quarter as its target, CEO Brad Stewart told Automotive News.

Source: Automotive News

AOT AUTOMOBILE SALES IN THE UNITED STATES WILL DROP ACCORDING TO SUPPLY CONSTRAINTS

Retail auto sales in the United States are expected to fall in August, due to the global semiconductor shortage coupled with the rapid spread of the Delta variant of compressed coronavirus stock at dealerships, consultants JD Power said. and LMC Automotive. Retail sales of new vehicles are expected to fall 14.3% to 987,100 in August from a year earlier, they said in a report released Thursday.

Source: Reuters

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