Honda may have been hit harder by the ongoing supply chain crisis than its rivals if dealer stock is any indication, Mitsubishi is another automaker that’s lost out in the Inflation Reduction Act’s new EV credit system and two more brands are idling production lines in Europe. You’ll have to read on to find out which ones! All that and more in this Friday edition of The Morning Shift for September 16, 2022.
The National Automotive Dealer Association’s “Attitude Survey,” which takes the temperature of how dealers are feeling about the brands they work with, has found Honda slip from its No. 3 spot in 2021 to No. 6 in 2022. This may not seem like a huge deal, but the brand has long been a mainstay in the top five, and the reason for the slip is particularly noteworthy. From Automotive News :
According to Honda spokeswoman Jessica Fini, low product availability is the primary reason for the brand’s slide from the top five. Supply shortages and logistical challenges have left inventory at record lows with dealerships experiencing “incredibly high turn rates,” Fini said.
Bill Feinstein, president of Planet Honda in Tilton, N.H., and general manager of Planet Honda in Union, N.J., as well as chairman emeritus of the Honda National Dealer Advisory Board, agreed.
“The big issue is product availability,” Feinstein told Automotive News. “Honda dealers are used to having a much higher level of throughput than other dealers.”
While Honda is typically among the industry’s top two brands on throughput, or annual new-vehicle sales per dealership, “that’s obviously been impacted by product availability,” he said.
It’s left Honda in a particularly weak position, as it’s watched sales drop for 13 straight months, with days’ worth of vehicle supply at the end of August languishing in single digits. The Chairman Emeritus of the Honda National Dealer Advisory Board believes competitors — particularly Hyundai and Kia — have weathered the storm better, and are cutting into the Japanese automaker’s market share.
“There’s been some belief that Honda may have been more adversely impacted and slower to recover than some other [manufacturers],” Feinstein said. “We’ve all felt the pressure from the Koreans, who clearly have not had the same supply chain impacts that we’ve had.”
Hyundai Motor Group, which includes the Hyundai, Kia and Genesis brands, is showing signs of recovery. Hyundai and Kia capped five months of sales declines with double-digit gains in August. Randy Parker, CEO of Hyundai Motor America, said inventory is improving and he expects factory output to increase 30 to 35 percent in the second half of the year, which will help rebuild dealership stockpiles. Genesis set an August record with 5,102 vehicles sold on continued strong demand for crossovers.
Feinstein said he considers Honda’s shrinking market share to be a concern. “That’s disconcerting to retailers, because at the end of the day we’re all competitive and we’d like to win,” he said.
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As far as brands that trended upwards in NADA’s survey, the top five is occupied by Lexus, Toyota, BMW, Porsche and Subaru, in that order.
The new Outlander might not be the most compelling SUV ever or anything, but it’s certainly Mitsubishi’s best product in ages, and people are responding to it. The upcoming plug-in hybrid variant was on track to make the car even more competitive — until the federal government introduced legislation that eliminated the crossover’s $7,500 credit, because it’s not built here .
How are Mitsubishi and its dealers feeling about that? You can probably guess. From Automotive News :
Mitsubishi dealer Grant Petersen Jr. said the loss of the tax credit on the redesigned model is “concerning.”
In the near term, Mitsubishi will likely have to absorb some of that $7,500 and lower the compact crossover’s MSRP to keep it competitive, said Petersen, CEO of Bronco Motors Family of Dealerships, which operates Bronco Mitsubishi in suburban Boise in Idaho.
Mitsubishi Motors North America CEO Mark Chaffin acknowledged the loss and said the new EV incentive rules complicate product plans for the entire industry.
“There’s a lot more questions than answers right now,” Chaffin told Automotive News. “Like the rest of the OEMs, we’re waiting for further clarification and expecting to see the details that come out of the Department of Treasury later this year.”
Chaffin said the loss will not alter launch plans for the redesigned Outlander PHEV. But “mid-to-long-term, we’ll have to monitor market conditions and see where it goes,” he said.
Nor is Mitsubishi tweaking the Outlander PHEV’s pricing, which has not been disclosed.
“We remain confident that [losing the tax credit] won’t make a big difference in the sales success of this vehicle,” he said. “We think we’re going to have a hard time keeping up with the demand.”
Sure, Mitsubishi might have a hard time keeping up with demand out of the gate, but that won’t last forever. The idea that losing a $7,500 credit “won’t make a big difference” in the Outlander PHEV’s success or failure is frankly unbelievable from where I’m sitting, but what choice does Mitsubishi have but to buck up right now? The company has no automotive plants in the U.S. anymore, and it’d take ages to start one up again. Part of me wonders if the Inflation Reduction Act will prove the final nail in the coffin that will send Mitsubishi packing from North America for good.
It took just 12 hours, but all 2,200 examples of the last call for Chrysler’s brawny sedan have been spoken for, Motor Trend reports:
The car was revealed to the public Sept. 13, on the eve of the North American International Detroit Auto Show. The order books opened at www.reservation.chrysler.com and 12 hours later the car was sold out, says Chrysler brand CEO Chris Feuell. There is now a waiting list.
Interested buyers only had to choose a color, a dealer, and leave an undisclosed deposit to secure one of the cars priced at $56,595.
It was a good test of Chrysler’s new digital reservation process. The brand wants to make it easier to buy and own a new vehicle, Feuell says. The 300 may be going away after the 2023 model year, but Feuell says she would love to resurrect the name on a future product. With plans to take the Chrysler brand fully electric by 2028, with the first all-electric model due in 2025, that future product potentially resurrecting the 300 name will likely be an EV.
I miss the days when buying a highly-anticipated new car wasn’t dependent on feverishly refreshing a browser window like you’re trying to snap up a PS5. Then again, I really have no business complaining. I can’t afford a new car anyway.
General Motors will invest almost half a billion dollars into a facility dedicated to stamping steel and aluminum in Marion, Indiana. Courtesy of Reuters :
The investment will be used to purchase and install two new press lines, complete press and die upgrades, renovations and expand the facility space by about 6,000-square-foot.
The automaker said that work on the facility will begin later this year.
GM’s Marion Metal Center, which started in 1956, produces sheet metal parts for multiple GM assembly plants to support production of Chevrolet, Buick, GMC and Cadillac vehicles. The center currently employs more than 750 workers.
A company spokesperson told the Detroit Free Press that this influx of cash will prepare the Marion plant for the brand’s “all-electric future.” They didn’t explain how, but if I had to hazard a guess, I’d assume it’s because more parts will need to be manufactured domestically for those sweet, sweet subsidies.
Spanish plants belonging to the two automakers are being partially paused as of Friday due to a lack of silicon, Reuters reported:
Two Renault factories in Spain’s Castile and Leon region will come to a temporary halt, with one shutting down entirely on Saturday and the other cancelling shifts on several days this week and the next, a representative from the CCOO union said.
At Stellantis’ plant in Vigo, in northwestern Spain, the company has cancelled Saturday and Sunday night shifts.
“They stopped production for 15 days in February. The supply shortage could mean more shut-downs in any moment,” a Stellantis union representative told Reuters.
One the summer, some automakers began to see a light at the end of the semiconductor shortage tunnel . Different brands will make their way out at their own pace.
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The Star of Pleiades elicits warm feelings for many, but I struggle to fathom why anymore. I actually have no beef with the 2024 Crosstrek’s exterior, but Subaru’s interior design never evolved past 2010, and on paper I don’t see much distinguishing their products. You can get all-wheel drive in most anything today. Is it a perception of dependability that keeps the faithful coming back for more? Those who love your Subarus, tell me why.