More and more people are falling behind with their car loans

Image for article titled More and more people are falling behind on their car loans

photo: Steve DaSilva

People default on their car loans, Toyota shuts down production lines and Audi sues NIO for copyright infringement. All that and more inside The morning shift for June 16, 2022.

1st gear: Certainly a good sign for the economy as a whole

Ford CFO John Lawler said on Wednesday The cost of manufacturing the Mustang Mach-E increasedand also that loan defaults are creeping up thanks to “economic pressure”. With Fed interest rates riseand the hashtag #StockMarketCrash always trending on Twitter, these defaults could be another sign of economic turmoil to come. Out of Automotive News:

John Lawler, chief financial officer of Ford Motor Co., said Wednesday that auto loan arrears are starting to rise in what he described as a “dynamic” economic environment.

“We’re looking for any data points we can find to read where consumers are and where they’re headed amid inflationary concerns and economic pressures,” Lawler said at the Deutsche Bank Global Auto Industry Conference. “We’re seeing some headwinds when it comes to late payments, perhaps as a leading indicator.”

Still, he said the rise isn’t cause for concern just yet, as default rates have been at historic lows for around the past year.

“It looks like we’re going back more toward the mean,” Lawler said.

Lower inventories, coupled with lower stimulus and higher average transaction prices would have the industry in a better position than in previous years should the economy enter a recession, he said.

“It’s a completely different environment heading into a potential recession than anything I’ve seen in the past,” Lawler said.

With a recession looming, there’s only one reliable way to ensure your money weathers the storm: Chevrolet Corvette NFTs. Note: Steve is not a qualified financial advisor. Please do not buy the Corvette NFT.

2nd gear: Toyota idles more production in Japan

Toyota was on one production cutting crack lately, and it seems there’s no end in sight. The company is shutting down another production line in Japan over the next few weeks. From Reuters:

Toyota Motor Corp (7203.T) announced on Thursday that it plans an additional suspension of domestic factory production in June and July due to semiconductor shortages and a COVID-19 outbreak at one of its suppliers.

It now said it will produce 750,000 vehicles worldwide for the month. It has not been announced how many vehicles are to be produced in July.

This time it cited staff disruptions at one supplier due to an outbreak of COVID-19 and a breakdown in production equipment at another supplier.

Poor Toyota seeing problems with both employees and equipment at its suppliers. That production target of 750,000 units is probably around a 15% less than before the pandemicalthough that is subject to change depending on which specific sub-brands are affected.

3rd gear: Audi sues NIO over car names

NIO offers two models called ES6 and ES8. Audi sells two cars called S6 and S8. According to the latter, these are too close for comfort. Out of Reuters:

Volkswagen (VOWG_p.DE) Audi has filed a lawsuit against Chinese electric vehicle maker Nio (9866.HK) in a court in Munich for alleged infringement of Audi’s trademark rights, German newspaper Handelsblatt reported on Thursday.

According to Audi, Nio’s decision to name two of its models the ES6 and ES8 violates Audi’s trademark for its own S6 and S8 model designations, Handelsblatt reported.

Nio, a premium brand that has so far generated most of its sales in China, entered the Norwegian market in May last year and plans to launch in Germany, the Netherlands, Sweden and Denmark before the end of the year.

The ES6 has for yearsand the ES8 even longerBut it seems Audi didn’t have a problem until NIO started moving a bit closer to Volkswagen’s home turf. That’s the problem with alphanumeric car names – there’s only a limited number of letters and numbers to choose from.

4th gear: Buyers of electric trucks put a deposit on everything

A new study has confirmed what the rest of us have always suspected: if you take deposit on your fancy new electric truck, people will throw their money away with little intention of actually buying the vehicle. Out of Automotive News:

Electric truck consumers are using refundable reservations to pre-order more than one electric vehicle and keep their options open, according to a new survey conducted by battery health analysts Recurrent.

The study, released Monday, surveyed more than 200 consumers who had at least one outstanding EV reservation between April and May, and found that buyers tended to overorder electric trucks because of concerns about whether the manufacturer would actually fulfill the purchase would. Eighty-nine percent of Tesla Cybertruck reservations overlapped with another truck pre-order, and 100 percent of customers with pre-orders for the Ford F-150 Lightning and Chevrolet Silverado EV also had another vehicle reserved, according to the results.

The study found that nearly 50 percent of consumers who reserved either the Tesla Cybertruck or another vehicle intended to redeem the pre-order.

electric cars don’t seem to be following the same trend, but EV truck buyers just seem to want an EV truck – regardless of who builds the thing. The market is truly a race to reach buyers and one in which Tesla keeps falling behind.

5th gear: Sony and Honda tie the EV knot

It’s wedding season, and while the rest of us are looking for flights and constantly forgetting to actually send in our RSVPs (I’m forgiveness(Lydia, I promise I’m coming), Honda and Sony have finally made those electrified steps down the aisle. The two companies form a joint venture called Sony Honda Mobility Inc. to combine the capabilities of both companies in a new automaker. Out of Automotive News:

TOKYO — Honda Motor Co. and Japanese electronics giant Sony Corp. have signed an agreement to form a “high added value” electric vehicle joint venture this year under the name Sony Honda Mobility Inc., which will deliver a “new generation” of mobility and services.”

The 50-50 company will be launched this year with a goal of starting selling electric vehicles and offering mobility services in 2025, the companies said. The deal is still subject to regulatory approval.

Yasuhide Mizuno, currently Senior Managing Officer at Honda, will become Chairman and CEO of the new company. Mizuno was formerly Honda’s chief officer for automotive operations before being tasked with leading the Honda-Sony JV Prep Office, a change that went into effect June 1.

Honda CEO Toshihiro Mibe has said the initial company is expected to be small, but that it is an important step in trying out new business models for an industry beset by change.

I’ve been trying to figure out if “Hony” or “Sonda” sound better, but I think Sony Honda Mobility is probably a stronger name than either. Still, I wish I could have listened in at the meeting where they decided which company name came first.

Back: It’s a Jeep Thing

On this day 77 years ago a Butterfly flapped its wings. Now I’m blinded by chrome shopping streets on the Autobahn. Thank you Willy

Neutral: What’s your recession plan?

Personally, I’ll mount some giant gas tanks in the hatch of an Integra and start raiding up and down the Gulf Coast, which I’ll henceforth rename Gastown, in a perfect amalgamation of The Fast and the Furious and crazy max. Did you know that the villain costumes for street fighter were assembled almost entirely from parts bought in bondage shops and sporting goods stores? Related question, does anyone have recommendations for bondage shops or sporting goods stores in New York City?

.

Leave a Comment