The Intersection 4-10-22

What it takes to remake a car company in the EV age

buy-sell dealership frenzy

Mazda is undertaking a portfolio makeover, we tell you in this week’s issue, and it offers a glimpse into what people mean when they refer to industry upheaval.

What you see in our package of stories, starting on Page 1, is that it’s not like the old days. Mazda isn’t just designing a new crossover or two in hopes of scratching out another percentage point of market share. It is instead acknowledging that it’s behind in the race to electric cars. Mazda is small for an automaker, and fairly well down the list of U.S. brands. And like some other competitors around the world, it doesn’t have deep pockets to do all the R&D necessary to get ahead.

So it’s preparing an entirely new platform strategy that will let it create larger models, bigger engines, hybrids, EVs and even diesels. (Yes, diesels).

To make all those moving parts work requires a new U.S. production base, new efficiency methods in manufacturing and product development, a new high-volume U.S. model to help pay the bills while the transformation is underway, a closer working relationship with its part-owner, Toyota, new offerings in mild hybrid and plug-in hybrid powertrains, more efficient gasoline engines while the future technologies are in development, a brand image enhancement to make shoppers want to spend a little more to buy a Mazda, and last but not least, more investment by U.S. retailers to make their dealerships shine.

This is what it takes to reposition an auto company — any automaker — for the days ahead. Not just a new EV or two, but a holistic strategy that looks something like a 3-dimensional chess board.

“We are in a transitional period toward electrification,” Takeji Kojima, managing executive officer in charge of product strategy and R&D administration, tells us. “There are many challenges to overcome, and they will not be solved by a single solution.”

Lindsay Chappell   

Jim Rowen

In Monday’s Automotive News:

Toyota way forward

Rolling with the changes: Toyota Motor North America will aim to have 30 days of new vehicles on hand once automotive manufacturing returns to a more normal pace. That compares with its pre-pandemic target in the 40s. Bob Carter, Toyota’s North America sales chief, says the 30-day target “sounds like nirvana” compared to the 17 days’ worth of inventory on hand as of March. While low inventory levels have stifled U.S. new-vehicle sales in recent months, it has been a profit boon for automakers and dealers, and Carter says Toyota has learned to be more efficient.

Hummer options

You’ve got options: GMC sold 100 Hummer electric pickups from December through March, and the vehicle is “richer” than the brand expected according to GMC boss Duncan Aldred. What does that mean? Most customers are spending $2,000 to $4,000 on options and accessories, double the average accessory spend on the Sierra, itself much more expensive than other GMC nameplates. It’s a plus for dealers, who get a margin on options and accessories. Aldred and GMC dealers walk us through the program.

Weekend headlines

Nio idles output: Nio says COVID lockdown measures have forced one after another parts maker to suspend deliveries since March.

Magna, Lear look to new Detroit plants, minority JVs for growth: The suppliers are looking to capture more business from automakers increasingly conscious of their spending with minority-owned companies.

Chevy Bolt redux

Chevy Bolt relaunches after recall: Chevrolet debuted two ads to relaunch the 2022 Bolt EV and EUV after a recall related to battery fires shut down production of the electric vehicles for about seven months. The brand expects media spending for the Bolts to top all other nameplates except the Silverado pickup.

GM and Honda partnership

GM, Honda EV partnership plans: General Motors and Honda plan to co-develop a line of affordable electric vehicles, with a focus on compact crossovers, starting in 2027. The vehicles will be based on a new global electric architecture powered by GM’s Ultium battery technology.

Hertz and Polestar

Hertz snaps up Polestar EVs: Swedish electric automaker Polestar has inked a deal with rental giant Hertz to supply up to 65,000 battery-powered vehicles. The five-year global deal should represent more than $3 billion of potential revenue for the EV startup.

Top Five U.S. Lease Deals  
MarketScan
What are the best deals nationally this week across the U.S.? Market Scan’s Payment Value Index (PVI) analyzes the relationship between MSRP* and the monthly payment to determine which lease deal delivers the best “bang for the buck.” For more information, visit www.marketscan.com.
Electric Vehicles & Hybrids  
PVI Year Make Model Average MSRP*   Average Best Payment
91.92 2022 CHEVROLET BOLT EV $33,595.00   $312.22
91.89 2022 CHEVROLET BOLT EUV $36,245.00   $337.83
91.66 2021 CHEVROLET BOLT EV $38,567.00   $366.51
91.16 2022 KIA NIRO EV $43,495.00   $433.11
90.96 2022 HYUNDAI KONA EV $39,435.00   $399.15

 

Convertible  
PVI Year Make Model Average MSRP*   Average Best Payment
86.77 2022 CHEVROLET CORVETTE $72,195.00   $993.28
86.50 2021 CHEVROLET CAMARO $40,561.39   $573.78
86.50 2022 CHEVROLET CAMARO $40,825.62   $572.08
85.98 2022 MINI CONVERTIBLE $33,765.63   $483.26
85.85 2022 MAZDA MX-5 MIATA $31,815.00   $462.49

 

PVI Year Make Model Average MSRP*   Average Best Payment
87.83 2022 VOLVO V60 $68,395.00   $871.92
87.74 2022 MINI CLUBMAN $34,968.75   $449.29
87.67 2022 SUBARU OUTBACK $35,782.50   $460.98
87.13 2021 VOLVO V60 CROSS COUNTRY $46,445.00   $621.39
87.06 2021 VOLVO V60 $51,257.50   $678.69
* Average MSRP is the average of the MSRP of all the individual trim levels for each model, and includes all taxes, registration and average dealership fees. Based on 36-month lease, 12,000 miles per year, 720 credit score, customer cash = 5% of MSRP, Selling Price = MSRP

Source: Payment Value Index (PVI) ™, a trademark of Market Scan Information Systems, Inc.

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April 5 DAILY DRIVE: The LIFO problem

 

A discussion about how LIFO, a tax deferment strategy employed by many dealers that works as long as inventory levels are healthy, threatens to upend the retail sector and a possible congressional lifeline with Automotive News Washington Reporter Audrey LaForest.

Listen to the Podcast >
 

April 15, 1964: The first Ford Mustang sold to a retail customer was purchased by Chicago schoolteacher Gail Brown two days before the official on-sale date.

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