AD #2868 – New Car Deals Drying Up; U.S. Market Share Winners & Losers; 2020 Lexus RX 450h Is All About Luxury

This is Autoline Daily, the show dedicated to enthusiasts of the global automotive industry.

LOW INVENTORY MEANS FEWER NEW CAR DEALS
If you’re in the market for a new car, you probably should have bought it a couple of months ago. In March and April, automakers in the American market were offering screaming deals to get customers into showrooms. Today, those deals are gone, and they’re not coming back anytime soon. It’s all got to do with inventory. Ward’s Intelligence reports that automakers have 2.6 million vehicles in inventory, or 59-days supply. That may sound like a lot, but at this time of year it’s far below where they want it to be. A year ago automakers had 3.9 million vehicles in inventory, or 1.3 million more. While they are running a lot of overtime to make up for lost production, inventory levels only increased by about 13,000 vehicles from May to June. And as long as supply is tight there aren’t going to be nearly as many screaming deals.

OHIO DEMANDS GM RETURN $60 MILLION TAX CREDIT
General Motors is running into trouble with authorities in Australia and Ohio. In the Ohio legislature, Republicans and Democrats are demanding that GM return $60 million in tax credits that were awarded to its assembly plant in Lordstown, Ohio, which it closed last year. GM got the credits on condition the plant would stay open until at least 2028. GM says the state should consider that market conditions forced the plant closure. Sales of the Chevrolet Cruze collapsed as the market shifted to SUVs and CUVs. The Cruze was made at the plant.

GM’S HOLDEN DEALERS WANT MORE MONEY
Meanwhile, in Australia, politicians and Holden dealers are hopping mad at General Motors. They accuse it of refusing to negotiate in good faith as GM winds down its operations in Australia. GM has 185 Holden dealers who are losing their franchise and offered to pay them $1,500 per car sold over a set period of time. Holden dealers say they should be paid $6,100 per car and want to go to binding arbitration, which GM doesn’t want to do. Stay tuned, this story is far from over.

NIKOLA WILL REUSE FUEL CELL WATER
As you likely know, water is a byproduct of hydrogen fuel cells, which usually just goes to waste. But Nikola is working on reusing that water. In a recent tweet, CEO Trevor Milton revealed that water created by its fuel cell vehicles will be reused as windshield wiper fluid. But more interestingly he said that some of it will be collected to use as drinking water for a built-in fountain. While there’s debate around how safe it is to drink fuel cell water, it would be quite the feature if they can pull it off. With so many electric trucks hitting the market, having a unique feature like this will really help it stand out.

U.S. MARKET SHARE WINNERS & LOSERS
Every car company has seen its sales plummet due to the coronavirus pandemic. But one easy way to track which automakers are doing better than others is to look at their market share. In the U.S. market last quarter, 6 automakers lost market share. And two of them lost a lot, Nissan and FCA. The other losers were Mitsubishi, General Motors, Toyota and BMW. There were two automakers who held onto the market share they already had, Ford and Audi. And 11 automakers picked up market share. Honda, Hyundai, Mazda, Kia, Daimler and Subaru picked up the most. They can be pleased that even though sales are off, more customers are coming to their stores than to their competitors. For those of you wondering, Tesla is further down the market share winners list at a gain of 0.1%.

KIA LAUNCHING VIRTUAL DEALER EXPERIENCE GLOBALLY
How do you sell cars in the middle of a pandemic. Here’s what Kia is doing. It’s launching an online platform that allows customers to virtually explore a dealership from the comfort of their homes. Called Live Stream Showroom, it initially launched in the Middle East and Africa, but the company plans to roll it out globally. The live video sessions include one-on-one consultations with sales reps to answer any questions, as well as on-demand demonstrations of new technology. Consumers increasingly want to do more of the car buying process online, so automakers need to do more things like this to help attract new buyers.

NEW S-CLASS FEATURES REVEALED VIA DIGITAL VIDEO SERIES
The all-new Mercedes-Benz S-Class will debut in September and to keep people’s interest until then, Mercedes is releasing a series of digital videos that will dive into the luxury car’s features. The series officially kicks off tomorrow, but Mercedes revealed a few interesting details. The camouflage prototype seen here is a plug-in hybrid version, which will have a range of up to about 100 kilometers or roughly 62 miles. The new S-Class will also have Artificial Intelligence and a Head Up Display with Augmented Reality. We’re only able to show these pictures, but we encourage you to follow the link in the transcript or description box to get a better idea of how it operates. It’s kind of cool. Lastly is a new, giant center display screen. And that’s what tomorrow’s video will dive into, the MBUX or user experience system in the new S-Class.

UAW TALKS REFORM
The UAW scandal has been highlighted by the revealing of deep seated corruption from some its top-most officials, including the now former President of the Union. And according to Wards Auto, the way those top officials are elected is one of the main areas where members and federal authorities would like to see reform. Union officers are currently elected via an administrative caucus, but both sides would like to see a more democratic selection process. Leadership could even be elected by votes directly from members and there’s also talk of an independent monitor to ensure any changes the UAW makes are actually meaningful. One reform the UAW has already made is the decision to sell a piece of property in Michigan that’s valued at more than $2 million and was supposed to have a house built on it for former president Dennis Williams. Williams has not been charged with any wrongdoing yet, but did have to pay back the Union $55,000 in unwarranted travel expenses.

Want to learn a lot more about the all new Ford F-150? Then be sure to join us for Autoline After Hours this Thursday when we have Hau Thai Tang, the head of all product development at the Ford Motor Company, joining us for the show. The F-Series is the crown jewel of Ford. If it were a stand alone company it would be bigger than McDonald’s, Nike, Coca-Cola or Starbucks. So join John and Gary for a front row seat on how the all new F-150 was developed.

LEXUS RX 450H IMPRESSIONS
We like telling you about the different test cars we have coming through the Autoline Garage, and we recently had a Lexus RX 450 hybrid. The model we drove, which is made in Canada, is priced at over $59,400 which included over $11,000 in options. But you get what you pay for. This all wheel drive CUV really imparts a feeling of heft and solidity from the moment you slide behind the wheel. And no wonder, it’s heavy, weighing over 4,900 pounds. The doors close with a solid chunk, sealing you off from the outside world as if you’re sitting in the middle of an anechoic chamber. And when you slip it into Drive, it just glides down the road, smoothly absorbing the bumps and heaves and all the pavement imperfections. Yes, it has paddle shifters. And yes you can select Sport Mode. But those are just there to fool some of the people all of the time. The RX 450 hybrid is not about performance. It’s all about cuddling you up in the lap of luxury.

That’s not to say it’s a slouch. It’s V6 engine and two electric motors crank out a combined 308 horsepower, so it accelerates well. Motor Trend estimates it will do 0-60 miles an hour in 7 seconds, which ought to satisfy any enthusiast. But this is not a car for enthusiasts. It’s for those who want to be pampered in a luxury CUV that also happens to be a hybrid so as to assuage their environmental guilt. Speaking of that, it’s rated at 30 miles to the gallon, which is exceptional for a vehicle of this size that weighs so much.

The RX is arguably the most important vehicle in the Lexus lineup, accounting for one out of every three sold in the US market. The hybrid accounts for about 18% of those sales and it really doesn’t face much competition. While there are plug-in hybrid versions of the Audi Q5, the BMW X5, the Mercedes GLC and the Porsche Cayenne, the Lexus RX 450h easily outsells them all put together.

And that wraps up today’s report, thanks for joining us.