AD #2183 – Wealthy Buying Fewer New Cars, JLR Develops Future Steering Wheel, AM/FM Radio Faces Grim Future
September 5th, 2017 at 11:55am
Runtime: 7:54
- U.S. Sales Nosedive in August
- Hyundai Has Supplier Problems in China
- JLR’s Steering Wheel Mobility Assistant
- Daimler Testing Plug-In Fuel Cell
- Mercedes Teases New EQ Concept
- New Technology Could Kill Traditional Radio
- Corvette Inventory Spikes
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On today’s show… uh-oh, now even rich people are buying fewer new cars… Jaguar Land Rover creates the steering wheel of the future… and old cars have been protecting the radio broadcast business. All that and more coming right up on Autoline Daily.
This is Autoline Daily the show that covers all aspects of the global automotive industry.
U.S. SALES NOSEDIVE
Sales in the U.S. market took a nosedive last month. The SAAR fell to 16.0 million units. Car buyers bought 1.47 million vehicles, which is a pretty good number except that it’s a drop of 5.7% compared to a year ago. And some automakers really took it on the chin. Hyundai was down 27%, which is a huge dropoff in sales. Nissan, FCA, Porsche and Daimler also saw double digit drops. That’s a shock to see Porsche and Daimler fall that much. In fact, almost every single luxury brand saw sales drop. Here’s our Autoline Insight. We’ve definitely hit an inflection point in the market when you see wealthy people buying fewer new cars. This is something we’ll have to watch carefully to see if it develops into a trend. And yet, some automakers had a decent month. Mitsubishi saw a 7% increase in sales, while Volkswagen continues to get back on its feet. General Motors and Toyota posted gains, and the GM number is especially impressive, knowing the company is cutting back on fleet sales, so this shows it’s gaining retail customers. Toyota, meanwhile, is boosting fleet sales, especially with passenger cars. And here’s why. Sales of passenger cars fell close to 10% last month, while sales of trucks, CUVs, SUVs and vans grew by nearly 3%. No doubt the market was affected by Hurricane Harvey and the vehicles damaged by that storm will have to be replaced. But the overall trend is clear, the market is slowly slowing down.
| August, 2017 U.S. Sales | ||
|---|---|---|
| SAAR | 16.0 Million | |
| Total Sales | 1.47 Million | -5.7% |
| Top 5 Losers | ||
|---|---|---|
| Hyundai | 54,300 | -27.4% |
| Nissan | 108,300 | -16.3% |
| FCA | 174,800 | -13.9% |
| Porsche | 4,709 | -12.5% |
| Daimler | 29,200 | -11.9% |
| Top 5 Gainers | ||
|---|---|---|
| Mitsubishi | 8,100 | +7.2% |
| Volkswagen | 32,000 | +4.9% |
| GM | 275,390 | +3.4% |
| Toyota | 227,600 | +2.8% |
| Subaru | 63,200 | +0.9% |
| Cars vs. Trucks | ||
|---|---|---|
| Passenger Cars | 523,354 | -9.75% |
| Trucks | 951,676 | +2.73% |
I GOTS TA GET PAID
Hyundai is running into issues in China. The company suspended production at one of its factories because a supplier refused to provide parts because it was not getting paid. Reuters reports that Hyundai’s joint-venture partner BAIC is in charge of payments and is responsible for the delays. The relationship between the two companies is starting to fray. BAIC wants to source parts from cheaper Chinese firms, while Hyundai wants to maintain its South Korean supply chain. The joint-venture’s 3 other plants are still operating. But this isn’t the first time this has occurred. Just last month, Hyundai and BAIC had to suspend production at its plants because a different supplier wasn’t getting paid and refused to provide parts. And slumping sales is only making things worse. Sales of vehicles built at Hyundai’s Chinese plants were down 64% between April and June.
Jaguar is developing a hyper modern steering wheel and that’s coming up next.
JLR’S STEERING WHEEL MOBILITY ASSISTANT
Autonomy and ride-sharing could drastically reduce vehicle ownership and now Jaguar Land Rover is envisioning a future where consumers would only own a single part of a car. Sayer is a voice-activated artificial intelligence powered steering wheel developed by the automaker that would be used like a personal mobility assistant. Sayer will make appointments for a vehicle, make sure it shows up on time and will even set an alarm to wake you up. I think the idea is, when so many autonomous concepts want to take the steering wheel away, JLR wants to put it back in your hands.
DAIMLER TESTING PLUG-IN FUEL CELL
Fuel cells seem to be gaining traction as a possible replacement for piston-engined cars and now Daimler is getting ready to join the mix. It’s started testing a plug-in hybrid fuel cell based the the GLC SUV. Development started in 2015 with safety and airflow management, which has been followed by summer and winter road testing. Now Mercedes is getting ready for serial production and will show off a pre-production version of the GLC F-CELL at the Frankfurt Motor Show.
MERCEDES TEASES NEW EQ CONCEPT
And while we’re on the subject of Mercedes and Frankfurt, the automaker is teasing a new EQ concept. EQ is the name Mercedes has given to its future line of electric vehicles. We don’t know much about the EV, but based on this teaser video we can see it will have some pretty radical lighting design.
Coming up next, broadcast radio is in trouble, and new cars will only make it worse.
NEW TECHNOLOGY KILLING TRADITIONAL RADIO
There’s a fascinating study from New York University that says AM/FM radio faces a grim future and a lot of it has to do with the technology coming into cars. It says that radio broadcasters have failed to connect with Generation Z, people born after 1995, who will account for 40% of all consumers by 2020. Teenagers and college students are turning away from radio and depending on YouTube, Spotify and Pandora to listen to new music. The study says that young people would have abandoned radio even sooner except for one thing: the average car today is more than 11 years old and they don’t have USB ports or internet connection. However, by the year 2020, 75% of all new cars will have digital connections. According to the BillBoard Hot 100 chart, streaming is now playing an important role in determining what music is played on the radio, rather than the other way around. The report says that AM/FM radio must adapt to a new digital world because, “If it doesn’t, radio risks becoming a thing of the past, like the wax cylinder or 78 RPM record – fondly remembered but no longer relevant to an audience that has moved on.”
CORVETTE INVENTORY SPIKES
General Motors is closing the Corvette assembly plant for three months. It shut on July 31st and Autoforecast Solutions says it won’t reopen until November. According to Wards Auto, there were over 15,600 Corvette’s in inventory at the end of July, which is 37% higher than the previous year. That represents 203 days of supply, up from 146 in June. We’ve talked about a shutdown to retool for a mid-engine ‘vette, but it’s a basic rule of law in the automotive industry. If people are not buying your cars, you have to stop making them.
And that wraps up today’s report. Thanks for watching and please join us again tomorrow.
Thanks to our partner for embedding Autoline Daily on its website: WardsAuto.com
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Comments (24)
September 5th, 2017 at 12:15 pm
The Corvette plant is shutting down for “inventory adjustment,” but also, is being modernized and rearranged.
http://www.corvetteblogger.com/2017/07/19/corvette-assembly-plants-three-month-shutdown-begin-july-28th/
September 5th, 2017 at 12:23 pm
Nice link Kit; while sales have slowed (and caught up with demand), those ’18′s and maybe a mid-engine slated to be produced, will indeed, need to keep prying eyes out. Renovation, re-tooling and production reduction seem to be the reason(s) for the shutdown.
September 5th, 2017 at 12:45 pm
Just wait ’til that Corvette SUV hits the market!
September 5th, 2017 at 1:43 pm
My understanding is that they were purposely building up the days supply in advance, knowing they would have to have an extended shutdown for retooling in the late Summer/Fall. The same applies to the Silverado and Sierra inventory numbers.
September 5th, 2017 at 1:48 pm
JLR’s mobility assistant? – Not even a good concept. It would be crazy to try to introduce a dedicated piece of hardware you’d have to lug around with you when all that functionality is ideal for your smartphone. I’m surprised they didn’t try to incorporate a dedicated navigation system into their steering wheel too. Lame.
September 5th, 2017 at 2:04 pm
4 That bad thing, is that ordered cars will be delayed for months. I don’t know about truck buyers, but many Corvette buyers, including myself, still do factory orders.
September 5th, 2017 at 3:06 pm
#6 I imagine the Corvette factory first stopped accepting any new orders, finished building all the cars they had custom orders for, and THEN shut the factory.
September 5th, 2017 at 3:20 pm
AM FM radio is killing itself. If you listen to a station for 4 hours and you will hear the same songs two times or more. The broadcast programming is just that a program there are very few live DJs left, most broadcasts are done by computer. So radio is slitting its own throat.
September 5th, 2017 at 3:21 pm
I thing deleting FM is a mistake. As the dad of two gen Y kids, I will comment that even though our vehicles have smart phone connectivity they still listen to the radio, especially on their short trips (most of the cases).
Also, done write me off, I still have a good 25 years in the workforce and I would not buy a car without fm radio.
September 5th, 2017 at 3:25 pm
Bob (#5), I completely agree. It seems JLR wants to be noticed and maybe detain some IP, but their idea doesn’t seem very practical.
I heard there’s a company making a ring (yes to wear in your finger) that would eliminate the need for car keys, that is a much better idea for ownership and car sharing too. I guess RFID could be used for that.
September 5th, 2017 at 3:26 pm
AM/FM radio.. What is AM radio?
Between the satellite “radio” and streaming music from an app or what is already downloaded to my car or phone who needs radio? Plus on long trips not having to use a seek button every hour or so and listen to commercials makes it an obsolete technology.
September 5th, 2017 at 4:56 pm
7 Nope. I know first hand. They took at least one order, July 17, that they didn’t build, and won’t until November or so.
I listen to radio a lot, mostly NPR, on both AM and FM, whichever station is coming in better. I also listen to Bob and Tom sometimes, on an Indianapolis FM station. I sometimes listen to music on radio, but also listen to my own music from an iPod or memory stick, or CD’s.
I could get the radio stations I listen to via streaming, but the radio is much more convenient. Also, though I have unlimited data on my phone, if everyone used phone data as a replacement for radio, the systems would be so overwhelmed, that the streaming would probably work for no one.
September 5th, 2017 at 5:11 pm
Corvettes not selling – could it be price? Wealthy not buying new – same as above, wealthy didn’t get that way wasting money especially the when depreciation is considered. CD players are already a thing of the past in new cars much like cassettes were.
September 5th, 2017 at 5:13 pm
I listen to AM/FM radio for the news and talk programs, not just music. So, there is still important reasons to keep AM/FM radios in cars.
September 5th, 2017 at 5:53 pm
13 The current Corvette is in its 5th model year so, not suprisingly, sales are slowing down. Yeah, Corvettes aren’t cheap, but they are a bargain compared to the competition. I see a lot of SUV’s and pickup trucks that cost more than basic Corvette.
My 2017 Prius has a CD player, but many new cars don’t.
September 5th, 2017 at 8:09 pm
The “ClearChannel” and similar broadcast networks slit their own throats by saving money on programming and eliminating local content. They have become nothing more than propaganda and/or monopolistic, brain-dead programming.
Once upon a time, I could change stations and every one was unique with local content. But today, 1/3d are religious stations shouting their version of John 3:16. Worse, atleast two or more stations are playing the same ClearChannel cr*p.
If you can’t tell where a radio station is based upon its content, it has no value. As for Pandora, a content monopoly by any other name is just as boring.
You can’t attract smart people by boring them to death.
Bob Wilson, Huntsville AL
September 5th, 2017 at 8:22 pm
I subscribe to Sirius. I hate to have to ‘bargain’ with them every six months for a fair rate but I’m pretty much happy with the content; mostly Classic Vinyl and Classic Rewind (for me).
September 5th, 2017 at 8:58 pm
I’ve heard so much bad about Sirius/XM, regarding obnoxious high pressure crap if you want to cancel, that I have never renewed after the initial 3 months expires. If you could sign up for 3 or 6 months, which would just shut off when it expires, I might consider it.
September 6th, 2017 at 3:14 am
We accepted a trial of Sirius XM for six-months at a very good price. We had two major trips planned during the period, so it was a welcome buy, but I won’t pay for a full price renewal at the end of this trial period. We still listen more to local FM stations when we’re in our home area, because we want to hear the local news and weather.
September 6th, 2017 at 8:25 am
You folks that say you still listen to AM/FM radio are all like me probably over the age of 30. You probably owned a cassette player Walkman or at least a portable CD player at one time. But I can see what Sean was saying that the new generation of kids don’t go to the store to buy music. They sure as hell don’t record anything off the radio and could care less about NPR or talk radio. I remember thinking a record collection of 20 or 30 albums was allot. My kids have devices with over 1500 songs on them. So I can see how radio will fade away in the coming years.
They will never experience the joy of finally hearing their favorite song being played after waiting for hours because they can get it instantly and listen to it whenever they want.
September 6th, 2017 at 8:45 am
Lambo, I agree that radio is pretty much obsolete for music, but not for news, sports, local events info, etc. At some point, celluler streaming might almost completely replace radio for those things too, but that is years away, IMHO.
I probably won’t be around to see it, but radio will probably see a nostalgia boom in the future, like vinyl records are seeing now.
September 6th, 2017 at 10:00 am
I know what your saying Kit. On my last trip from Dallas back to Ohio I was traveling through Oklahoma when the clouds got dark and circular. No warning whatsoever from satellite radio because its not local. But we were streaming from our phones which started to alarm with tornado warnings. So we switched on the radio at that point. So I think you’ll see even more development in making the local stuff available through streaming apps or based on your phones GPS. Once the stuff you can only currently find on the radio becomes more available thru other means than a radio will be as common as an 8 track player.
September 6th, 2017 at 1:56 pm
Oh my, the good ole days of radios and 8 track. I can remember planning my evenings in high school around going to the tallest hill around to hear WOAI AM out of San Antonio play Stairway To Heaven nightly at 10 PM……Bought the latest innovation of an underdash FM/8track in anticipation of receiving something besides the 1 classical station broadcasting and the local CBS TV affiliate on FM.
September 7th, 2017 at 11:31 am
#11 What is AM radio?
That’s where I get my McElroy fix in the early mornings!
AM works great for news and spoken word stuff, traffic and weather on the 8s.
“The “ClearChannel” and similar broadcast networks slit their own throats by saving money on programming and eliminating local content.”
ITA with this. The MBAs saved all sorts of money when they eliminated local content. But as they say in the auto industry, you can’t cost cut your way into profit.