AD #2261 – Sales Down 1st Time in 8 Years, More Tesla Model 3 Delays, Geely Buys Stake in Volvo Trucks
January 4th, 2018 at 11:42am
Runtime: 7:21
0:29 December Sales Down, But Only a Little
1:16 2017 Full Year Sales
2:03 Major, Full Line Manufacturer Sales
3:19 Model 3 Production Quota Pushed Back Again
4:00 Aurora Teams with VW & Hyundai
5:34 Kia Teases New Electric Concept
5:59 Geely Buys Stake in Volvo Trucks
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On today’s show… car sales decline for the first time in 8 years in the American market… Tesla continues to have manufacturing problems… and Geely brings more of the Volvo brand under its wing. All that and more coming right up on Autoline Daily.
This is Autoline Daily the show for enthusiasts of the automotive industry.
AMERICAN SALES DOWN 1ST TIME IN 8 YEARS
Yesterday automakers posted their sales for December and all of 2017 in the US market and for the first time since 2009 sales were down. But only by a little bit. One-point-five million people bought a new vehicle last month, a slip of one-and-a-half percent in December, representing a drop of 85,000 vehicles. The SAAR hit 17.7 million vehicles, a strong number, but down from 18 million a year earlier. Even so, you have to wonder how much the deep freeze and blizzards that hit much of the country in late December kept people out of dealership showrooms. And with the deep freeze stretching into January it will probably hurt car sales this month as well.
| U.S. Light Vehicle Sales December, 2017 |
|||
|---|---|---|---|
| Drop | Change | ||
| Total Market | 1,595,793 | -85,775 | -1.5% |
| U.S. Light Vehicle Sales December, 2017 |
||
|---|---|---|
| 2017 | 2016 | |
| SAAR | 17.76 Million | 18.05 Million |
2017 FULL YEAR SALES
For the full year, automakers sold 17.1 million light vehicles, which represents a drop of 330,000 vehicles from the year before, which translates into a 1.9% decline. But the real story here is how the passenger car segment continues to crater. Car sales dropped by 793,000 vehicles in 2017. In fact, over the last two years passenger car sales are down by a staggering 1.4 million units. Meanwhile the truck segment continues to grow strong, with sales up by 463,000 trucks.Trucks now account for over 65% of all purchases.
| 2017 U.S. Light Vehicle Sales | |||
|---|---|---|---|
| Total Market | 17,134,733 | -330,044 | -1.9% |
| Passenger Cars | 6,079,584 | -793,145 | |
| Light Trucks | 11,055,149 | +463,101 | |
MAJOR AUTOMAKER SALES
Amongst the major, full line manufacturers General Motors saw its sales fall 1.4% for the year. But since the overall market declined 1.9%, GM actually picked up some market share. So did Ford, which saw sales drop 1.2%. Toyota actually eked out a small gain, but FCA’s sales dropped by a significant 8.4%. FCA has a lot of new product coming out this year and should be able to turn that around. Honda also eked out a small gain, but Nissan is really closing the gap. It was up 1.9% and finished the year only 48,000 vehicles behind Honda. 2018 could be the year where Nissan finally outsells Honda in the American market.
| 2017 U.S. Light Vehicle Sales | ||
|---|---|---|
| General Motors | 3,000,147 | -1.4% |
| Ford | 2,512,881 | -1.2% |
| Toyota | 2,434,515 | +0.6% |
| FCA | 2,042,173 | -8.4% |
| Honda | 1,641,249 | +0.2% |
| Nissan | 1,593,464 | +1.9% |
Speaking of sales, Tesla could be doing a lot better if it could only build more Model 3s. And that’s coming up next.
TESLA PUSHES MODEL 3 PRODUCTION BACK AGAIN
Tesla is making more Model 3s, but it’s pushing back the date, yet again, on when it’s going to hit line speed with the electric vehicle. The company originally said it would make 5,000 Model 3’s a week by December of 2017. Then in November it pushed it back to the end of the first quarter this year and now says it won’t hit that production line speed until the end of the second quarter. It’s currently making about 1,000 Model 3’s a week, an improvement from November and says it could likely make around 2,500 a week by the end of the first quarter. News of the delay sent Tesla shares down 2%.
AUTONOMOUS STARTUP TEAMS W/ VW & HYUNDAI
Here’s a new startup worth taking note of. Aurora is a company that focuses on artificial intelligence, deep learning and robotics and was founded by a group of guys with experience at Google, Tesla and as far back as the early days of the DARPA Challenge. And it just announced partnerships with Volkswagen and Hyundai. Aurora and VW have already been working to install the startup’s sensors, hardware and software into various vehicle platforms within the VW Group. The end goal is to create a new worldwide mobility service that would allow a customer to get a ride using an app or virtual assistant. For Hyundai, it will first incorporate Aurora’s technology into its new generation fuel-cell vehicle that debuts at CES and will test it in markets like China. The Korean automaker also plans to commercialise level 4 autonomous vehicles for smart cities by 2021.
Kia is talking about future electric cars and that’s coming up next.
KIA TEASES NEW ELECTRIC CONCEPT
Kia is teasing a new concept it will show off at CES. The currently nameless vehicle is powered by a battery electric powertrain. And it will showcase what Kia says is a “never-seen-before human machine interface” and a new motion graphic lighting system. Kia didn’t reveal much else but we’ll learn more next week when the car officially debuts.
GEELY BUYS STAKE IN VOLVO TRUCKS
Volvo Cars and Volvo Trucks split into two separate companies back in 1999 but now they’re being reunited. Chinese automaker Geely, which owns Volvo Cars, just acquired an
8.2 percent stake in Volvo Trucks worth around $3.3 billion. Geely bought the shares from Cevian Capital and it now makes Geely the largest shareholder in Volvo Trucks. But even though both Volvo companies are back under the same umbrella, Geely doesn’t have any plans to merge the two.
Don’t forget to join us today for the first Autoline After Hours of 2018. John and Gary will be back and our special guest is Rick Spina, the executive chief engineer of crossovers at General Motors. We’ll have the new Buick Enclave in the studio, and James Amend from WardsAuto will also be joining us. Here’s your opportunity to have a front row seat as we dive into the details of what it takes to develop a new vehicle.
And with that we come to the end of today’s report. Thanks for watching and please join us again tomorrow.
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Comments (15)
January 4th, 2018 at 12:28 pm
Tesla is sounding more like Elio with its production dates. At least they are producing something. If Elio builds a car their engine technology will be 5 years old.
January 4th, 2018 at 12:39 pm
Sean – what vehicles are “light trucks”? Does this include SUVs? or are SUVs in the passenger car numbers or are they a separate category?
January 4th, 2018 at 12:57 pm
The new Kia is the Niro EV clearly labled as a Niro in your rear view photo.
I drive a Niro hybrid in Canada
The plugin has just hit the market in N. America
and the EV is next
January 4th, 2018 at 1:07 pm
I wonder how much affect severe weather has on purchasing decisions? Are they partly to blame for the downturn in car sales over SUV/CUVs? Whether it’s a hurricane or a super polar snow storm what ever, I’m thinking I want to drive an AWD vehicle or a civic, cruse, fusion…
January 4th, 2018 at 1:37 pm
So will Tesla still be in business at the end of the second quarter to build the 5,000 a week Elon’s been promising? His cash burn is so high and if he starts building cars in volume, his cost per unit will go down but that just means he’ll lose less money on each car built. With $3.4 billion in cash on hand at the end of the 3rd quarter and he continues to burn over a billion $ each quarter, cash will be practically
non existent. Where is all the money going to come from to develop Semis, Roadsters, pickups, Model Ys, and the next generation Model S?.
On the passenger cars vs. light truck sales, with 1.4M fewer passenger cars being sold over the past 2 years, it’s no wonder crude is over $70 a barrel again.
January 4th, 2018 at 1:44 pm
Not to worry about bernie musk,he’ll find another white elephant to take deposits on. And the lemmings will be more than happy to give them their loot with deposits on vaporware.
January 4th, 2018 at 1:53 pm
I’m doing my part to buck the truck trend, buying two cars in the last two years.
#2 Most SUVs/CUVs are classified as “light trucks.” If I can find the official definition, I’ll post a link.
January 4th, 2018 at 1:57 pm
Continuing on the storms of late December, we just got nailed yesterday for a half foot of snow and cold temperatures for the rest of the week (I live in S.C.) so our car sales will probably take an at least one week hit for January. This same storm is riding up the east coast so will disrupt sales also on the order of about one week or maybe a little less (as north of N.C. they actually have snow removal equipment) though the storm is projected to be more severe at it rides the coast.
January 4th, 2018 at 2:00 pm
#2 The SUV’s used to fall under the truck classification (and I believe still do). Even minivans did at first. Thats changed over the years and what used to differentiate them was if they were uni-body or body on frame. Which means most CUVs would be considered passenger cars. I am also interested in how they differentiate them now.
January 4th, 2018 at 2:15 pm
@David Sprowl – In this case, light trucks includes utility vehicles.
January 4th, 2018 at 4:43 pm
From wikipedia:
Federal regulations define a light-duty truck to be any motor vehicle having a gross vehicle weight rating (curb weight plus payload) of no more than 8,500 pounds (3,855.5 kg) which is “(1) Designed primarily for purposes of transportation of property or is a derivation of such a vehicle, or (2) Designed primarily for transportation of persons and has a capacity of more than 12 persons, or (3) Available with special features enabling off-street or off-highway operation and use.”
I suspect the (3) is what makes most CUV’s “trucks” by this definition. The lift kit, and available 4WD are considered “special features enabling off-street or off-highway operation and use.”
January 4th, 2018 at 7:15 pm
How can the Chrysler Pacifica Hybrid be ranked high when there are several class action lawsuits forming over the minivan stalling in the middle of traffic and other auto engineering issues. Does FCA know how to design and deliver a quality product?
January 4th, 2018 at 7:53 pm
I had recommended in the past that GM should have incorporated the Volt powertrain into a Chevy Equinox and GMC Terrain to boost adaption of Hybrids and EV. The CUV segment of the automotive industry is Red Hot! This is a missed opportunity IMHO for GM. Their incorporation of “Stop / Start” technology is not selling vehicles.
This “Stop / Start” technology maybe the reason Nissan is seeing an increase in market share and the fact that Honda placed a under powered 1.5L Turbo in the upper trim levels of their best selling vehicle the CR-V. Honda needs to replace the 1.5L Turbo with the 2.0L Turbo found in the New Civic into the 2018 CR-V to further increase CR-V sells.
January 4th, 2018 at 7:59 pm
I am anxiously awaiting the debut of the 5 passenger Honda Pilot Sport! I hope it’s styling mimics the New Honda Ridgeline!!!
All Honda need to do is replace the truck bed with a enclosed cabin for the Pilot Sport.
This vehicle could give the Jeep Grand Cherokee a run for it’s money IMHO.
January 5th, 2018 at 8:11 am
12 In CR’s tests, the “underpowered” CR-V with the 1.5 turbot is quicker than most of its competition, like Forester, Escape, and Rogue, and it gets better gas mileage. Yeah, maybe they should offer the 2 liter used in the Civic type R, but do Honda crossover buyers want an engine that needs premium gas? Yeah, they could de-tune it for regular.
I think GM is making a big mistake in not allowing stop/start to be turned off in LaCrosse, and some other models. Some people just wouldn’t want to hear or feel it, and I wouldn’t want the extra wear and tear on the starter, for the small gain in mpg it would provide. Stop/start is fine with “mild hybrids” that use a belt driven starter-generator. You barely feel it, and there is no fly wheel gear engagement to wear out.