Good morning! Welcome to The Morning Shift, your roundup of the auto news you crave, all in one place every weekday morning. Since none of you have the heart to do what is necessary—to serve the cause of true justice—read this instead.
1st Gear: Quantity Over Quality
By and large, renting a car when you’re traveling is awful. Rental cars are expensive and smell weird. But they are all we’ve got because otherwise we’d be stuck. Now Toyota, it seems, is now in the same boat as us.
Toyota has been hit particularly hard in the SUV craze of the United States, since its longtime flagship seller is the Camry, which is not an SUV. In order to help boost sales, the automaker will now increase fleet sales to rental car companies, reports Bloomberg:
Toyota will nearly match last year’s total sales to fleet customers, which means the company has some catching up to do. Deliveries to rental car companies and other fleets were down by about 20 percent during the first six months of the year, according to Jim Lentz, chief executive officer of Toyota’s North American operations.
“A lot of our fleet sales are backloaded into the second half,” Lentz said in a phone interview before the grand opening Thursday of Toyota’s new North American headquarters in Plano, Texas. “We’re confident we’re in good shape for the rest of the year.”
Traditionally, analysts and investors aren’t jazzed about fleet sales, since bulk discounts don’t make the company as much money as sales to individual people do, Bloomberg points out. But, like, beggars can’t be choosers?
It’s also fun to keep in mind that because the used-car market is already jam-packed with post-lease cars, this new, anticipated influx of rental cars will further lower the price a rental agency can hope to fetch from a used rental car.
2nd Gear: Yes, The Carpool Lanes Do Make A Difference
You’re in your car alone and stuck in traffic. You eye the carpool lane, which seems to be moving at the same speed as all the other lanes. You wonder if it’s actually necessary to have a carpool lane at all.
Turns out, it does. In fact, eliminating the carpool lanes would almost double commute times, according to a study conducted at the Massachusetts Institute of Technology and reported by Science Magazine. The impetus behind the study happened last year, when the government in Jakarta repealed a law that required the cars driving on the main roads of the business district during rush hour to carry at least three passengers.
Here’s what the study found:
To determine the impact on the city’s drivers, Benjamin Olken, an economist at the Massachusetts Institute of Technology in Cambridge, and colleagues queried Google Maps for real-time driving-speed data before and after the new policy went into effect. Following the policy lift, travel delays, defined as the time it takes to travel 1 kilometer, increased by 46% in the morning and almost 90% in the evening, the team reports today in Science.
But the most startling result is that phasing out the three-in-one policy led to worse traffic during times of the day and on roads where there had never been restrictions in place, Olken says. One possible explanation, he says, is that the three-in-one restriction led fewer people to drive into the city. “Maybe they carpooled, took public transit, or worked from home.”
Look, I get it: carpooling is kind of a pain in the ass. We all love the privacy we get in our own cars and, on top of that, working with someone else’s schedule is never as great as just worrying about your own. But if your morning commute is driving you absolutely insane, maybe carpooling is the way to go.
3rd Gear: More Supercars For Europe, Yay Europe
When New York City pisses me off to the point that I want to scream, I kick myself around some more by remembering that Europe is cooler in so many ways. A plethora of sidewalk cafes at which to spend a lazy afternoon. Cheaper coffee. And more rich people buying more supercars. I love that especially.
Companies like Aston Martin, Ferrari and Bentley are seeing continued European demand. Indeed, sales of the 488 alone rose 38 percent from last year, reports Automotive News. What a time to be alive!!!!
The sales surge is being fueled by the worldwide growth in the number of ultra-high net-worth buyers. “The total number of billionaires has doubled since 2010,” said Felipe Munoz, global analyst for JATO Dynamics. The rich are currently being fed by a steady flow of new models, more so than is usual in a segment where the high cost of developing replacement versions traditionally has meant life cycles are longer than in the rest of industry.
I hope one day I become rich enough to be “fed by a steady flow” of pho. That’s my dream. But wait, there’s more:
Many of the ultra-luxury sports car brands are also branching out into limited-edition vehicles, sometimes costing well over 1 million euros. Aston Martin, for example, is working on the Valkyrie with the Red Bull Formula One team. When it goes on sale mid-2019 the Valkyrie will cost 2.2 million pounds (2.5 million euros). Buyers partly see it as an investment opportunity. “This car will not depreciate,” Aston Martin Chief Financial Officer Mark Wilson said at the Geneva auto show in March.
The trick is not to get too greedy. Said Nash: “In this business you need to keep supply low.”
No shit, dude.
4th Gear: HEY MAYBE DIRECT SALES ARE THE WAY TO GO!!!!!!!!!!!!!!!!
It’s 2017. We’ve got cars that can drive themselves in very specific situations. They have built-in WiFi. They’ve got 360-degree cameras. They are GPS enabled. They learn your driving habits. Some will probably be able to wipe your ass soon (God I hope so). So, why is it that when we think of a dealership, the “lovely” and “helpful” places where you can purchase one of these wonderful machines, we imagine a pushy, sweaty, middle-aged car salesman named Ed?
Carmakers are realizing this disconnect and are trying a bunch of different things to make the carbuying experience more pleasant for people, according to The New York Times.
Here are some innovative ideas:
Aware that many buyers hate haggling, Lexus introduced a fixed-price program in May 2016, called Lexus Plus, in which the customer deals with only one person from beginning to end. Only 10 of its 238 dealers in the United States are involved so far; another three are preparing to enter.
“Buyers won’t have to wait 45 minutes to see a finance director,” said Jim Dunn, general manager for JM Lexus of Margate, Fla., the world’s highest-volume Lexus dealer, which will offer Lexus Plus. “It’s time to put your best price up front and live with that.”
OR, HOW ABOUT A DIRECT SALES MODEL.
Cadillac is testing a program whereby customers never buy any particular vehicle at all. Instead, they buy rights to a car and can change which one they want to drive using a mobile app.
OR, HOW ABOUT A DIRECT SALES MODEL (although Cadillac’s program doesn’t sound half bad.)
Alfa Romeo, trying to make a comeback in the United States, is arming its dealers’ sales teams with iPads to help them communicate on more equal terms with their customers, said Pieter Hogeveen, director of Alfa Romeo North America.
OR, HOW ABOUT A DIRECT SALES MODEL.
To reduce the time that people spend buying and servicing their vehicles, Lincoln is offering at-home test drives and service pickups and deliveries. Customers can even evaluate a vehicle over the weekend.
OR, HOW ABOUT A DIRECT SALES MODEL.
5th Gear: Clean All The Way Through
Right now, China is the world’s biggest car market. And electric vehicle sales there are booming, which is great, considering the air pollution there sucks.
Yet, all may not be as clean as it seems. Though the EVs themselves are clean, the production and exploitation of the cars could actually produce “more greenhouse gases and consumes more overall energy,” writes Bloomberg.
From the story:
The real challenge to reducing greenhouse gas emissions will be in developing nations — especially China, which is likely to dominate the global auto market for decades to come. Unfortunately, the structure of China’s industrial economy will make it difficult. One recent study by Chinese engineers estimated that electric vehicles generate about a 50 percent increase in both greenhouse gas emissions and total energy consumption over their life cycle. The manufacture of the lithium-ion battery alone accounts for 13 percent of the energy consumption and 20 percent of the emissions.
China’s energy infrastructure still relies largely on coal. Therefore, Chinese-made batteries and cars could still indirectly produce more pollution than in places with cleaner sources.
Reverse: RIP Kenny Irwin Jr.
Neutral: Rental Cars
We’ve seen with other automakers, especially the American Big Three, that relying on fleet sales and rental car services isn’t a good long-term solution. Can Toyota make this work?