Sales Slump to Continue
After all the numbers came in for 2017, overall vehicle sales were down 1.8% over 2016, which marks the first decline in seven years and, unfortunately for car makers, there’s no real end in sight. That is, unless you’re a super car manufacturer. Aston Martin and McLaren both recorded their biggest ever sales years in 2017 because the rich are getting so incredibly stinking rich!
Anyway. During the recession, people held on to their cars longer because they couldn’t afford to replace them. This meant stiffer competition among automakers for the sales that were occurring, so they worked hard to make their cars more appealing, more reliable and safer. When the economy finally bounced back, people spent the next seven years getting rid of their old vehicles and upgrading to newer, better cars.The reports bear this out – cars these days are safer, more reliable and more satisfying than ever before, and so people are keeping them longer, leading to a sales decline.
Sure, you’ll still have incidents where people blow through red lights and total cars, thereby generating a certain amount of reluctant sales, but there are already 1.26 vehicles on the road for every one licensed driver, meaning we have a shit ton of unlicensed drivers out there, or people just have plenty of cars.
And that’s what the industry experts are thinking – we’ve reached peak car, where we’ll back off to a stable replacement level of sales each year. Plus, as interest rates rise, people aren’t going to want to take out loans for new cars either. So how will automakers cope with a shrinking pie from which to get slices? Will they keep innovating as they did during the recession to attract a larger share, or will they collectively start making their products less reliable so they go bad at a prescribed point, forcing owners to upgrade? This is what we’d call the iPhone sales tactic.
Leasing Surges
On the heels of the sales report, leasing looks like it’s going gangbusters. About 31 percent of all new vehicle sales are leases in the US, but if you look at plug-in hybrids, the number jumps to 55 percent of all sales. And then there’s pure electric vehicles. Eighty percent of all EV sales are leases, which is crazy. Almost all people want to essentially rent these cars for a few years and Bloomberg is reporting that a major cause of this is the overall sense among consumers that electric vehicles are going to get better than they are now, so they don’t want to be locked into obsolete technology. Plus, resale value of EVs is currently very, very poor so purchasing one outright just doesn’t really make any sense, apart from for those 20 percent of people who bought them outright. Enjoy your Leaf!
Fuel Costs Jumping
Of course, those EVs may start to look more attractive this year as the 2018 Fuel Price Outlook suggests that gas prices could peak at just less than $3 per gallon. GasBuddy predicts that the national average price will rise 19 cents to around $2.57 per gallon this year, which still is not THAT bad, especially when you look at the rest of the world. But combine that with the drop in fuel efficiency we saw among new car purchases last year and GasBuddy predicts the average household will spend $1,898 on fuel this year. That’s $133 more than last year, which is the cost of at least two nice taco dinners, and I cast shame upon the evil oil spectators behind this rise because nothing should stand between us and nice taco dinners!
California Banning ICEs
Meanwhile in California, the land of the future, a bill has been introduced to the state legislature that would ban the sale of new cars and trucks powered by gasoline or diesel fuels by the year 2040. If you’ve been tuning into the show for a while, you’ll know that 2040 is also a deadline set by Paris, London and a few other cities or countries, with some even having more aggressive targets for pollution reduction. They estimate that the measure, if it’s adopted, would cut greenhouse gas emissions by 80 percent from 1990 levels in just ten years. We’ll have to see how they end up voting, but I bet there are going to be some very busy lobbyists in Sacramento this week!
Mazda’s Creepin’ Tech
Mazda this week filed a patent for some technology that’s both innovative and incredibly creepy. It’s apparently all in an effort to thwart distracted or drowsy driving. Basically, there is a camera or series of cameras set up inside the car, pointed at the driver and the car’s computer uses the driver’s eyes and expression to determine if the driver is paying attention and engaged with the drive they’re going on. If it determines that the driver is busy checking texts or Facebook or dozing off, the car will apparently respond by doing anything from simple sounds and visual prompts to changing the navigation system to route the driver to a more fun-looking road to drive. If the driver looks like he or she is having fun and is entertained by the route, the computer will store that route for later reference. Basically, Mazda is going to find all the cool roads and fill them with CX-9s because drivers can’t put their stupid phones down anymore.
"Eyes on the road, buddy!" - Mazda
Nissan Gets in Your Head
And speaking of creepy, Nissan is taking it to the next level with their new Brain to Vehicle (B2V) system, which they will be showing off this coming week at the Consumer Electronics Show. Drivers are fitted with a skull cap that monitors brain wave activity and transmits signals to steering, acceleration and braking systems that can respond before the driver even moves his or her hands or feet. The driver still actually makes the car do things, but the car just anticipates what’s going to happen and can start things milliseconds sooner. Apparently this is meant to enhance the driving pleasure when it seems to me it’s just cheaper to make cars faster and more responsive than to dump time and research into brain wave monitoring. But hey, they’re making money like crazy selling Nissan Rogues to people so they can do what they want I guess.
Tesla Under-performs...Again
Meanwhile a Tesla earnings call this week managed to once again unveil the woeful under-performance of the company in meeting the goals its founder sets for it. Rather than churning out a few thousand Model 3s per week as predicted earlier this year, Tesla’s highest number yet was a little less than 800 and, let’s be honest, making almost 100 cars a day is still a super achievement and they’re ramping up effectively. The problem comes when the founder is all bluster about getting to 5,000 cars per week by the end of Q1 2018 which, by the way, has been pushed back to the end of the second quarter. Tesla’s stock took a hit after the announcement, which was, for once, not accompanied by some other shiny thing to distract investors from the problems going on. Tesla has a big year coming up with the launch of both their semi truck and the Model Y, but it’s critical they get their shit figured out quick, or buyers are going to start figuring out that hey, that Chevy Bolt is a pretty nice car and I can go buy one right now.
Burn Rover, Burn
On Sunday night last week, a parking garage in Liverpool, England, resembled the gates of hell as a raging inferno engulfed 1,400 vehicles. Fortunately, no one was injured and, surprisingly, the fire wasn’t started by an Italian super car. It was rather friendly fire, coming from a Land Rover, of course vehicles not known for their wiring or electronics excellence. The fire really is something incredible to see, as you can tell from the video above. The fuel in the cars just fed the fire until it was completely unconquerable by the local fire brigade, meaning they couldn’t stop it spreading to other cars. Sort of like an automotive herpes that, instead of itching, just creates a huge insurance hassle for thousands of people.
Squirrels Drive Local Man Nutty
A British Volkswagen Golf driver learned the hard way how squirrels are just rats with fluffy tails last month. Apparently he parked his car outside his girlfriend’s father’s home near London and then left with the girlfriend for a month to tour southeast Asia. During that time, several squirrels decided that hey, Volkswagen does make a pretty comfy car, and called the place home, storing acorns in every conceivable place throughout the vehicle they could access. The glove box, the engine bay, even the transmission was packed and the owner found it tough to shift when he returned home. The clean-up and disposal of hundreds of perfectly good acorns that would feed families of the little bastards throughout the winter cost the driver £230. Which is not a small sum, especially coming back from vacation.
Hot Dog, Cool Crime
In other food-related automotive antics, a driver in Texas got off with a warning this week when he was pulled over for a minor traffic violation. Apparently, prior to departing, he placed a hot dog on the rear bumper of his Chevy Silverado and taped a piece of paper with “Free hot dog” written on it above (hard to tell from the above photo, but easy to see how creepy it is) . He then proceeded to drive from Waco, Texas to Brownwood and back, a journey of more than 120 miles, before getting stopped. The hot dog and sign were still there. Now if you’re me, you think this is like the adult equivalent of free candy written on the side of a seedy van, but if you’re a Brown County sheriff's department officer, you just think he’s a funny dude and let him be on his way. Only a matter of time before witness reports roll in about bodies being found in the back of a white pickup with hot dog residue on the bumper.
Pampered Oregonians Pumping
You may or may not be aware, but New Jersey and Oregon both require full service gas stations, or at least they did. Oregon has started allowing rural stations to permit self serve. You know, the same kind of gas we have literally everywhere else in the country? Well apparently people are freaking out about it, don’t know how to pump their own gas and are afraid that they will either burn the whole place down or smell like gasoline the rest of the day. I get that if you grew up not doing it, you may not know how to pump gas, but I fail to believe that people have never watched an attendant do it for them, and I have absolutely zero sympathy for these pampered brats kicking and screaming to get the good old times back. This really seems like a Portlandia sketch in real life. But apparently that really just is the state of Oregon.
Turkmenistan Bad Luck Ban
They aren’t the only place suffering though. Do you love black cars? Do you live in Ashgabat, Turkmenistan? Well tough luck. Your car has just been banned because the president of the oppressive country has decided they are bad luck and they must be impounded or repainted at the owner’s expense. And I do mean expense because it’s a very poor country and the people there can absolutely not afford to repaint their cars just because their president is a nut job. Sorry Turkmen!
Banned in Turkmenistan.
New Cars
Is there a future for the Fusion?
First up in new car news is actually the cancellation of a new car, or at least new design. In a letter to suppliers this week, Ford announced that they are canceling the planned redesign of the Ford Fusion which was scheduled for a 2020 launch. While this doesn’t mean that the Fusion itself has been discontinued and doesn’t rule out a major change coming later, this does look pretty bad, given the trouble brands have had with selling mid-sized sedans this past year. Buyers just want SUVs, trucks and crossovers these days and while Fusion sales are going okay, particularly to fleets, Ford apparently doesn’t see the value in spending time and money in refreshing a car that has only been around four years and remains one of the best looking cars in its class. That or this is the evidence we need to show that Ford is all a part of a massive marijuana smuggling scheme from where the Fusions roll off the line in Mexico. Remember those stories? Twice Fusions have been found with the spare tire well packed to the brim with weed awaiting receipt by a distributor in the US only to be discovered by a so-called innocent car buyer. Sure, Ford. I’m on to you.
New Audis with New Looks
While Ford foregoes redesigns of its cars, Audi has decided that their utter lack of creativity for their own cars needs to be changed. If you’re like me, you’ve probably sat in traffic, admiring an Audi and thought “that’s a really nice looking S6. Or, uh, A8. No, A4? RS4? Shit.” That’s apparently pretty common. According to an interview with Autocar, CEO Rupert Stadler says the similarity between models was used to make Audis more recognizable to emerging markets, which they say has worked swimmingly and now they’re free to spend money and be creative again. Marc Lichte, Audi’s Chief Designer, was quoted as saying something along the lines of “Oh, thank god, Jesus in heaven I’m bored to death over here and only have rulers on this drafting table!” New designs should start rolling out in March or April of this year.
This originally aired in The AllWaysDrive Podcast on January 4, 2018. Subscribe now and never miss the latest new car news!
Authored by
Devlin Riggs