More and more people are falling behind on their auto loans
People are falling behind on car loans, Toyota is slowing production lines, and Audi is suing NIO for copyright infringement. All this and more in The morning shift for June 16, 2022.
1st Gear: This surely bodes well for the economy as a whole
Ford Chief Financial Officer John Lawler said Wednesday Mustang Mach-E manufacturing costs were risingand also that delinquencies on loans are increasing due to “economic pressures”. With Fed interest rates upand the hashtag #StockMarketCrash always trending on Twitter, these defaults could be yet another sign of economic turmoil to come. Of Automotive News:
Ford Motor Co. Chief Financial Officer John Lawler said Wednesday that auto loan delinquencies were beginning to rise in what he called a “dynamic” economic environment.
“We’re looking for every data point we can to know where the consumer is and where they’re headed, given inflation issues and economic pressures,” Lawler said at the Deutsche Bank Global Auto Industry Conference. “We’re seeing headwinds around delinquencies as perhaps a leading indicator.”
Still, he said the rise was not yet of concern, as crime rates have been at historic lows for about last year.
“It looks like we’re going more towards the average,” Lawler said.
Falling inventory, coupled with weaker incentives and higher average transaction prices, puts the industry in a better position than in previous years if the economy slips into a recession, he said.
“It’s a completely different environment heading into what could be a potential recession than anything I’ve seen in the past,” Lawler said.
With a recession on the horizon, there’s only one reliable way to make sure your money weathers the storm: Chevrolet Corvette NFT. Note: Steve is not a qualified financial adviser. Please do not purchase the Corvette NFT.
2nd gear: Toyota further slows production in Japan
Toyota has been on a production cutting tear lately, and there seems to be no end in sight. The company is suspending yet another production line in Japan for the next few weeks. From Reuters:
Toyota Motor Corp (7203.T) said on Thursday it plans to further suspend production at the domestic assembly line in June and July due to semiconductor shortages and an outbreak of COVID-19 at the factory. one of its suppliers.
It has now announced that it will produce 750,000 vehicles worldwide for the month. It did not reveal the number of vehicles it aims to produce for July.
This time, he cited staff disruptions at one supplier due to a COVID-19 outbreak and faulty production equipment at another supplier.
Poor Toyota, seeing problems with both workforces and equipment from its suppliers. This production target of 750,000 units is probably around one 15% reduction from pre-pandemic levelsalthough this may change depending on the particular sub-brands involved.
3rd Gear: Audi sues NIO over car names
NIO offers two models called ES6 and ES8. Audi sells two cars called S6 and S8. According to the latter, these are too close for comfort. Of Reuters:
Volkswagen’s Audi (VOWG_p.DE) has filed a lawsuit in a Munich court against Chinese electric vehicle maker Nio (9866.HK) for alleged infringement of Audi’s trademark rights, German newspaper Handelsblatt reported on Thursday. .
According to Audi, Nio’s decision to name two of its ES6 and ES8 models infringes Audi’s trademark for its own S6 and S8 model designations, the Handelsblatt reported.
Nio, a premium brand which has so far made most of its sales in China, entered the Norwegian market in May last year and plans to launch in Germany, the Netherlands, Sweden and in Denmark before the end of the year.
The ES6 has For yearsand the ES8 even longer, but it looks like Audi didn’t have a problem until NIO started to get a little closer to Volkswagen’s territory. That’s the problem with alphanumeric car names – there are only so many letters and numbers to choose from.
4th Gear: Electric Truck Buyers Put Down Deposits on Everything
A new study has confirmed what the rest of us have always suspected: if you take refundable deposits for your fancy new electric truck, people will throw away their money without necessarily intending to actually buy the vehicle. Of Automotive News:
Electric truck consumers are using refundable reservations to pre-order more than one EV and keep their options open, according to a new survey by battery health analytics firm Recurrent.
The study, released on Monday, surveyed more than 200 consumers who had at least one pending EV reservation between April and May and found that shoppers tended to overorder electric trucks due to concerns about whether the manufacturer would actually honor the purchase. According to the results, 89% of Tesla Cybertruck reservations overlapped with another truck pre-order, and 100% of Ford F-150 Lightning and Chevrolet Silverado EV pre-orders also reserved another vehicle.
The study found that nearly 50% of consumers who reserved the Tesla Cybertruck or another vehicle intended to repurchase the preorder.
Electric cars don’t seem to follow the same trend, but e-truck buyers just seem to want an e-truck no matter who built the thing. The market is a real race to reach buyers, and a race in which Tesla is falling further and further behind.
5th gear: Sony and Honda make the connection to electric vehicles
It’s wedding season, and while the rest of us are looking for flights and continually forgetting to RSVP (I’m sorry, Lydia, I promise I’m coming), Honda and Sony have finally taken those electrified steps into the driveway. The two companies are forming a joint venture called Sony Honda Mobility Inc., to combine the capabilities of both companies into one new automaker. Of Automotive News:
TOKYO – Honda Motor Co. and Japanese electronics giant Sony Corp. have signed an agreement to create a “high value” electric vehicle joint venture this year under the name Sony Honda Mobility Inc. that will provide a “next generation of mobility and services.
The 50-50 company will be established this year with the aim of starting electric vehicle sales and providing mobility services in 2025, the companies said. The deal is still subject to regulatory approval.
Yasuhide Mizuno, currently managing director at Honda, will serve as chairman and CEO of the new company. Mizuno previously served as Honda’s general manager of automotive operations before being assigned to lead the Honda-Sony JV readiness office, a change that took effect June 1.
Honda CEO Toshihiro Mibe said the initial venture is expected to be small, but this is an important step in testing new business models for an industry beleaguered by change.
I had been trying to figure out if “Hony” or “Sonda” sounded better, but I think Sony Honda Mobility is probably a stronger name than either. Still, I wish I could listen to the meeting where they chose the company name first.
Backhand: It’s a Jeep Thing
On this date, 77 years ago, a the butterfly flapped its wings. Now I’m blinded on the freeway by chrome crawlers. Thanks Willys.
Neutral: What’s your recession plan?
Personally, I’ll fit huge gas tanks into the hatch of an Integra and start raiding along the Gulf Coast, which I’ll now rename Gastown, in a perfect mix of The fast and the furious and madmax. Did you know the villain costumes for road warrior were almost entirely assembled from parts purchased from bondage shops and sporting goods stores? Related question, does anyone have any bondage store or sporting goods store recommendations in New York?