CBT automotive newscast: April 7, 2022

Inside Automotive:

High gas prices lead to greater EV awareness, used car payments near $500 – Jessica Caldwell | Edmunds
As gas prices continue to climb, more shoppers are turning their attention to EVs, according to Edmunds. Today on inside Automotive, we’re pleased to welcome back Jessica Caldwell, Executive Director of Industry Insights at Edmunds, who discusses EV considerations and Q1 auto sales performance. Watch the complete segment here.

Headlines:

More developments have been announced for the General Motors and Honda collaboration to create a line of affordable electric vehicles that will utilize GM’s “Ultium” battery technology. Specific model information and prices were not provided, but the two automakers said they are aiming to begin building millions of these vehicles by 2027. GM Executive Ken Morris said the vehicles would be priced just below Chevrolet’s electric Equinox, which is projected to start at $30,000. Honda’s upcoming prologue SUV and a luxury all-electric Acura SUV will also use GM’s battery technology.

U.S.-based electric vehicle manufacturer Rivian has released production figures for the first quarter of 2022, less than a month after announcing revised production targets for the year. Despite a sluggish ramp-up of electric vehicle production, Rivian indicated that it is on schedule to meet its output targets for 2022. Rivian announced that as of the end of Q1 2022, the company has built 2,553 electric vehicles (March 31), and delivered 1,227 of those EVs to consumers.

On a conference call last month, Porsche CEO Oliver Blume warned that the automaker’s deliveries could be severely impacted by supply chain disruptions, the conflict in Ukraine, and the recent loss of over 1,000 Porsche vehicles from the Felicity Ace cargo ship fire last month. On Tuesday, Bloomberg reported that Blume’s premonition was correct, as Porsche saw a 25% drop in deliveries year-over-year, with total deliveries landing at slightly over 13,000 for the first quarter. All Porsche models are reportedly being affected.

Reuters reported that thousands of auto employees in the Russian region of Kaluga are currently out of work as western sanctions continue to be imposed on Russia. Volkswagen and Volvo both have important manufacturing plants in the region that have been shuttered, and Stellantis and Mitsubishi may also have to shut down their joint-venture manufacturing plant in the region due to parts shortages.

News & Opinion:

Average down payment for new vehicles climbs over $6,000
According to Edmunds, the average down payment for new vehicles climbed to over $6,000 for the first time. And it’s becoming evident that this new economic landscape is causing potential car buyers to dig deeper into their pockets to finance new cars. Jessica Caldwell, executive director of insights at Edmunds, described a couple of the causes of this historical and economy-altering event, saying, “Shrunken inventory continues to wreak havoc on both the new and used vehicle markets, and shoppers who can actually get their hands on a vehicle are committing to never-before-seen average payments and loan terms.” What new terms do car buyers have to deal with, and how does this impact dealers? Read more

Filling customer experience gaps in the lease-end journey
In a recent BusinessWire release, Patrick Roosenberg, Director of Automotive Finance Intelligence at J.D. Power, said, “The days of the one-size-fits-all lease loyalty strategy are long gone. In this market, lenders, dealers, and OEMs need to understand their customers’ unique individual journeys and develop tailored, highly targeted outreach strategies creating the greatest opportunity to retain them.” As simple as a lease end seems, with the choice of trading it in for another lease, returning it and walking away, or buying the leased car, Patrick Roosenberg stresses that it’s much more complicated than that. Post-COVID, and in the blurred space between ICE and EV, everyone is on a different journey than what they had planned. Read More