Hyundai and Kia are back to setting sales records, CarMax is buying Edmunds, the chip shortage is really bad news for Ford and the F-150, and Tesla. All that and more in The Morning Shift for April 1, 2021.
The two companies had their best March sales ever in the U.S., according to Automotive News.
Hyundai and Kia set monthly U.S. sales records in March, capping solid advances in first-quarter volume, signaling the market continues to gain traction one year after the pandemic upended the auto industry.
Volume rose 46 percent to 66,523 at Kia and 115 percent to 75,403 at Hyundai last month, behind strong crossover deliveries. For the quarter, volume rose 16 percent to a record 159,550 at Kia, and 28 percent at Hyundai.
Hyundai said it set a monthly record for retail volume — 72,740 units, up 153 percent — in March, with fleet volume off 58 percent during the month.
At Genesis, the new GV80 crossover continued to outpace the combined sales of the brand’s three sedans, leading to a 108 percent increase in first-quarter volume of 8,222. March sales rose 210 percent.
The Tucson was Hyundai’s best-selling car in March in the U.S., with 15,744 sold, while the best-selling Kia model last month was the ... Forte, with 10,459 sold.
More broadly, Auto News says that the annualized new car sales rate for March should be up to 16.5 million in the U.S., or not far off from the 17 million new cars that sold in the U.S. in 2019, the last “normal” year we had. The annualized new car sales rate in March 2020 was a fairly bleak 11.3 million.
According to Cox Automotive, current supplies at dealerships total 2.67 million cars and light trucks, down approximately 20,000 units from last week and the lowest point since mid-January. Stockpiles are 21 percent lower than this time last year. And days’ supply has dropped for four straight weeks and now stands at 67 days.
“The rate of sales is outpacing the industry’s replacement rate and will for the foreseeable future. We are looking at a lean situation in April,” Cox Automotive senior economist Charlie Chesbrough said this week. “The biggest problem will be pickup trucks. With limited availability, some customers may wait to purchase or buy something else.”
Toyota, Land Rover, GMC, Mercedes-Benz, Lexus, Chevrolet and Mini were among the brands with the lowest stockpiles, Cox Automotive said, while Buick, Infiniti, Mitsubishi, Jeep, VW and Dodge stockpiles were the highest in the industry.
Exciting times for all those Buick, Infiniti, and Mitsubishi buyers.
Tesla, of course, has a not insignificant business selling regulatory credits here in the U.S. to automakers that need help complying with emissions regulations. It sounds like it’s now expanding that part of its business to China.
The deal, the first of its kind to be reported between the two companies in China, highlights the scale of the task Volkswagen faces in transforming its huge petrol carmaking business into a leader in electric vehicles to rival Tesla.
China, the world’s biggest auto market where over 25 million vehicles were sold last year, runs a credit system that encourages automakers to work towards a cleaner future by, for example, improving fuel efficiency or making more electric cars.
Manufacturers are awarded green credits that can be offset against negative credits for producing more polluting vehicles. They can also buy green credits to ensure compliance with overall targets, though trade is usually between affiliated companies that share a major stakeholder.
To help meet increasingly tough targets, Volkswagen’s joint venture with state-owned Chinese automaker FAW, or FAW-Volkswagen, has agreed to buy credits from Tesla, the sources said, declining to be named as the talks were private.
Volkswagen declined to comment on the deal. It said in a statement it was “strategically targeting to be self-compliant” with rules in China, but that if required it would buy credits.
Tesla critics like to tag Tesla for relying on credit sales to prop up profits, but, in reality, credit sales are a relatively small percentage of Tesla’s revenue. It doesn’t seem like this deal will change that all that much.
The truck plant in Dearborn, Michigan, will shut for two weeks starting April 5, the automaker said Wednesday in an emailed statement. Ford will also cease production of the F-150 at its Kansas City plant next week. The company is canceling overtime shifts at both plants through June.
F-Series trucks are Ford’s biggest moneymakers and any lost production has a direct impact on the bottom line. The company is in the midst of rolling out a redesigned version of the F-150 and preparing to build a battery-powered model of the truck in Dearborn starting later this year.
Chief Executive Officer Jim Farley said last month that the chip shortage could cut Ford’s 2021 adjusted profit by $1 billion to $2.5 billion. The automaker said it would update that guidance when it reports first quarter results April 28.
There isn’t much more to say about the chip shortage at this point except that I’m sure there are con artists out there taking advantage of the moment as we speak.
That would be a little shy of half-a-million units, which is not that big all things considered given that it would be less than 10 percent of Stellantis’s global deliveries. Last year that figure was just under six million. Still, it’s a start.
The world’s fourth largest carmaker targets global sales of 400,000 high voltage vehicles this year from 139,000 in 2020 thanks to the launch of 11 additional models, John Elkann, who also serves as Stellantis chairman, said in a letter to Exor shareholders.
It plans to have fully-electric or hybrid versions of all of its vehicles available in Europe by 2025, broadly in line with plans of rivals such as Volkswagen and Renault-Nissan.
Edmunds is part of the galaxy of businesses in the car industry that make millions of dollars off of research and listings, not unlike J.D. Power. Automotive News reported Thursday that CarMax would be buying it in a $404 million deal. CarMax already owns a minority stake.
The transaction is expected to close in June and CarMax said it will pay with a combination of cash and stock. Edmunds will continue to operate independently from CarMax after the acquisition closes.
CarMax, the largest used-vehicle retailer in the U.S., said the full acquisition will let the two companies speed up their respective efforts toward delivering an “enhanced digital experience” to customers, with CarMax leveraging Edmunds’ content and technology, and Edmunds benefiting from CarMax’s national scale and infrastructure.
The two companies have since jointly developed an online instant offer for sellers of used autos, among other initiatives, the companies said. “The instant offer products on Edmunds.com and CarMax.com have put CarMax in the position to become the largest online buyer of used autos from consumers,” CarMax CEO Bill Nash said in a release.
I wonder how much the word “synergy” was batted around as CarMax and Edmunds executives negotiated.
Ray LaHood was the token Republican in former President Barack Obama’s first cabinet, back when we all still sort of believed that bipartisanship was an achievable goal. LaHood served as Secretary of Transportation, though almost a decade after his four-year tenure it’s hard to recall a single accomplishment of his in that role.
Anyway, on Wednesday The New York Times reported that he was in bad straits financially at the time, accepting $50,000 from “an associate of a Lebanese-Nigerian billionaire” and not disclosing it, as one does.
Mr. LaHood, a former Republican congressman from Illinois, paid a $40,000 fine, according to the announcement from the U.S. attorney’s office in Los Angeles. He also repaid the $50,000 he had received.
The office said that Mr. LaHood, who was “suffering financial difficulties” at the time, admitted to accepting a $50,000 check from an associate of the billionaire, Gilbert Chagoury. The memo of the check said “Loan,” the office said.
Mr. LaHood did not disclose the check on two government ethics forms because he “did not want to be associated with Chagoury,” and he later “made misleading statements” to F.B.I. agents, the office said.
Efforts to reach Mr. LaHood or a representative Wednesday evening were not immediately successful.
I don’t know how it works in other states but scheduling a vaccine appointment in New York is like old Ticketmaster. I’m not nearly quick enough on the draw.