Bloomberg | Bloomberg | Getty ImagesAs dealerships look to sell off cars from the 2019 model year to bring in 2020's shiny new models, they're running into a problem. They still have cars from 2018 clogging up their lots.
A full 3.5% of all July's new car sales were 2018 model years, according to Tyson Jominy, vice president of automotive data and analytics consulting for J.D. Power. That means roughly 49,000 of the 1.4 million new cars sold in the U.S. in July were last year's models.
It's the highest percentage of older models of new cars since 2005 when J.D. Power first started collecting data. The percentage of new 2017 models that sold last July was 2.5%, he said Monday.
Having a lot of 2018 models on the lot isn't good for business. As Jominy points out, automakers are spending about $1,100 more per car in incentives to move 2018 cars of their lots than 2019 models, cutting into profits for automakers.
“Consumers know what expired produce looks like” Jominy said in an interview.
Jominy estimates that there may be another 30,000 cars from 2018 still waiting to be sold.
With so much 2018 inventory still on dealer lots, dealers are hesitant to stock new 2020 models, he said. For perspective, dealerships were able to move older models off their lots faster during the Great Recession than now, in July 2008 only .9% of all new car transactions were cars from 2007.
“This is the time of year to sell down model year 2019 cars and move to the 2020 models, but there are no 2020 models,” said Jominy.
He's right, six car segments haven't rolled out their 2020 vehicles at all, most notably large light duty pickups and muscle cars according to J.D. Power data. The Chevy Equinox and GMC Terrain SUV are the only 2020 compact utility vehicles on dealer lots now.
New car sales of 2018 models have been high all year, he said, which could be evidence of falling demand.
“We may need to see production cuts, the industry isn't getting any bigger and hard choices might have to be made,” he said.
Author: CNBC Online news
Jaguar Land Rover is working on 3D tech that will alert drivers to road hazards
The interior of a 2020 Jaguar XE sports sedan is seen during a Jaguar Land Rover Automotive PLC event in New York, U.S., on Tuesday, April 16, 2019.David Dlegado | Bloomberg | Getty ImagesEngineers at Jaguar Land Rover are developing 3D, “head up” technology that could project real-time safety alerts to drivers.
The car manufacturer is working with researchers from the University of Cambridge on the technology, it said in an announcement Tuesday.
The research is aiming to create an immersive display that would “closely match” real world experiences, which would in turn enable drivers to react to prompts and hazards in a more natural way.
If implemented, the display could provide drivers with information on lane departures, satellite navigation directions and road hazards.
“This program is at the forefront of development in the virtual reality space,” the University of Cambridge's Daping Chu said in a statement.
“We're looking at concepts and components which will set the scene for the connected, shared and autonomous cars of the future,” Chu, who is director of both the Centre for Photonic Devices and Sensors and the Centre for Advanced Photonics and Electronics, added.
As technology develops and vehicles become increasingly connected, manufacturers are working on a number of innovative systems to improve safety.
In March, for example, Volvo Cars announced it would be installing in-car cameras and sensors to check drivers for signs of intoxication and distraction.
The firm said the technology would be used to monitor drivers and, when needed, enable the car “to intervene if a clearly intoxicated or distracted driver does not respond to warning signals and is risking an accident involving serious injury or death.”
Actions the car could take include limiting speed to slowing down and then parking the car in a safe place. Installation of the technology will start in the early 2020s.
Uber shares slide after reporting disappointing quarterly results
VIDEO3:2503:25Uber reported a $5.2 billion loss—What five experts are watching nowTrading NationUber shares dropped as much as 12% in extended trading Thursday after the company delivered disappointing second-quarter results.
Shares remained down roughly 8% in premarket trading Friday.
It was a miss on both top and bottom lines for Uber. Net losses for the ride-hailing company soared to $5.24 billion, largely owing to stock based compensation.
Here's how the numbers stacked up otherwise versus analysts' expectations (according to consensus estimates compiled by Refinitiv):
Loss per share: $4.72, versus $3.12 expectedRevenue: $3.17 billion versus $3.36 billion expected “We think that 2019 will be our peak investment year and we think that 2020, 2021, you'll see losses come down. I think our break even is something that we can push the company to break even if we really wanted to frankly,” said CEO Dara Khosrowshahi in a conversation with CNBC's Deirdre Bosa. “No doubt in my mind that the business will eventually be a break even and profitable business.”
VIDEO21:1121:11Watch Uber CEO Dara Khosrowshahi's full interview following Q2 earnings missSquawk on the StreetExcluding stock-based compensation, Uber's losses were around $1.3 billion, roughly 30% worse than in the preceding quarter.
While Uber helped establish ride-hailing in markets all over the world, over the past decade, the company has been investing in and operating myriad “on-demand” businesses including food delivery, bike-sharing and a freight service that matches shippers with carriers who can haul their goods.
Uber's core ride-hailing business generated $12.19 billion in gross bookings during the second-quarter of 2019, beating analysts' estimate of $12.11 billion in gross bookings. But the newer, Uber Eats business generated $3.39 billion in gross bookings falling short of analysts' expectations of $3.51 billion in gross bookings.
Khosrowshahi said in the call with CNBC, “The Eats business is still a business that carries very significant growth going forward and that continues to attract a lot of capital. Not just in the US, but all over the world. With the eats business there's a lot of capital chasing a lot of growth and we're the leader on a global basis. So, I don't expect that business to be profitable in the next year or year after frankly.”
In recent weeks, Uber cut approximately 400 jobs from its marketing team.
The company boasted over 30 million riders in 2018. In July, the Uber platform reached over 100 million “Monthly Active Platform Consumers” for the first time, the company reported on Thursday.
Still, Uber has been working to keep riders, and drivers, loyal to its app with membership offerings and loyalty rewards, while battling formidable competitors including Lyft in North America, and Grab and Didi in Asia.
Uber previously recorded a $1 billion loss on $3.1 billion in revenue in its first report as a public company in May 2019.
Now, Uber must convince investors that, under CEO Dara Khosrowshahi's leadership, it is on a path to profitability with a realistic long-term plan for generating returns for investors. That's no easy feat since Uber, like other ride-hailing providers, has long subsidized its rides.
Uber priced its IPO shares at $45 in its market debut, and shares closed on Wednesday ahead of the second-quarter update at $39.15, trending higher after hours after its chief U.S. competitor, Lyft, reported lower than expected losses, higher than expected revenue, and gave a rosier outlook for the rest of 2019.
–Paayal Zaveri contributed to this report.
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This is breaking news. Please check back for updates.
VIDEO6:2906:29Uber is losing money — will it ever be profitable?Tech
Car-crazy Californians slow their purchases of new vehicles
Getty ImagesNew car sales in the largest U.S. auto market have slowed this year as more and more drivers opt for less-expensive used cars.
New vehicles sales in California dropped 5.6% in the first half of 2019, setting the state on track for full-year sales to fall short of 2 million vehicles for the first time since 2014, according to the California New Car Dealers Association.
“It is not a huge surprise that after years of increased sales, we are seeing the market level off, reflecting the broader economic and political climates,” Ted Nicholas, the association's chairman, said in a release Wednesday announcing sales for the first half of the year.
The drop in new vehicle sales in California is greater than the 1.5% decline seen in the U.S. from January through June. One reason could be that cars make up a bigger percentage of new model sales in California than around the rest the country. Sales of new cars, which include sedans and compacts, dropped by 10.8% during the first half of the year across the state while sales of new pickups, SUV's, crossover utility vehicles and other light trucks fell by 1.1%.
Californians, who have long been known for their love of cars and trucks, are still buying vehicles. But they are increasingly turning to the used market. Sales of preowned models in California climbed more than 5% in the first half of the year.
Sales of new electric and hybrid vehicles continue to climb in a state where green transportation is in demand. In fact, the trade group says EVs and hybrids made up 13% of all new models sold. In addition, the California car group now estimates sales of fully electric vehicles will top 100,000 this year.
Much of the rise in EV sales in the Golden State is due largely to the popularity of the Tesla Model 3, which is built in Fremont, just outside of San Francisco. In the first half of this year, Californians bought 33,005 Model 3s. That means 1 in 4 Model 3s sold worldwide in the first half of this year was purchased in California.
Bugatti reveals its most powerful supercar yet: The $10 million Centodieci
VIDEO1:2001:20Bugatti unveils the Centodieci, its most powerful supercarThe Bottom LineBugatti debuted its most powerful supercar at Pebble Beach on Friday: a $10 million,1,600 horsepower throwback to the '90s that sprints from 0 to 62 mph in 2.4 seconds.
The French carmaker is making a splash at Monterey's annual auto week. The Centodieci is the company's latest coachbuilt super car commemorating Bugatti's 110th anniversary.
Unlike Bugatti's $18.7 million La Voiture Noire, which was built for grand touring, the Centodieci was built for speed. The company is making just 10 of the Centodiecis, which feature Bugatti's 8.0-liter W16 engine. The company added an extra air inlet to help cool the engine.
Bugatti CentodieciSource: BugattiIt pays tribute to the EB110, the company's famous supercar of the 1990s. The La Voiture Noire, which literally translates to the black car, and a white Centodieci are both on display at “The Quail: A Motorsports Gathering” car show in Monterey, California, on Friday.
“With the Centodieci we pay homage to the EB110 super sports car which was built in the 1990s and is very much a part of our tradition-steeped history,” Bugatti President Stephan Winkelmann said in a press release. The EB110 is the only Bugatti produced under former Italian owner Romano Artioli at a factory in Campogalliano, Italy, and not at the company's famous chateau in Molsheim, France.
The Centodieci races from zero to 62 mph in 2.4 seconds, to 124 mph in 6.1 seconds and to 186 mph in 13.1 seconds. Like its cousin the Chiron, Bugatti electronically limited the top speed of the car to 236 mph.
Bugatti CentodieciSource: BugattiIt's about 44 pounds lighter than the Chiron. Bugatti did that with a lot of carbon fiber. The car's windshield wipers and stabilizers both use the material, creating a power-to-weight ratio of just 2.5 pounds per horsepower. With more than 200 pounds of downforce, Bugatti said it corners like the Bugatti Divo — a car built for cornering.
The Centodieci's design echoes the EB110's with familiar styling cues like the five circular air intakes toward the back of the car. Bugatti also designed all-new LED headlights to further evoke the Italian wedge shape of the previous car.
“The challenge was not to allow oneself to be captivated too much by the design of the historic vehicle and work solely in retrospect, but instead to create a modern interpretation of the shape and technology of that time,” said Achim Anscheidt, head designer at Bugatti.
Bugatti CentodieciSource: BugattiThe car's white color is also no coincidence.
“With the communication paint finish in white, we're demonstrating a powerful contrast with the La Voiture Noire – the black car just presented in March: two completely opposing yet related forces, like yin and yang,” said Winkelmann.
Bugatti made only one La Voiture Noire, which already has a buyer even though the car won't be ready for at least 2½ years. It plans to build 10 Centodiecis, which will cost roughly $10 million after taxes.
Bugatti's output is generally very limited, with the company producing just 70 cars a year. It only plans to make 500 of its Chiron supercar, and more than 400 of those were already spoken for as of April, according to the company.
Bugatti CentodieciSource: Bugatti
Luxury automakers from Bugatti to Pagani to debut new cars at Pebble Beach
The Hennessey Venom F5 concept vehicle is displayed during the 2018 Pebble Beach Concours d'Elegance in Pebble Beach, California, U.S., on Sunday, Aug. 26, 2018.David Paul Morris | Bloomberg | Getty ImagesThousands of classic car fans are rolling onto California's Monterey Peninsula for what has become one of the year's most eagerly awaited automotive events.
Centered around Sunday's Pebble Beach Concours d'Elegance, it's a week-long series of car shows, auctions, parties and other events featuring some of the world's rarest and most expensive collector cars.
But what has become known as Pebble Beach car week has also become a major event for new car fans, as well. More than a dozen different luxury brands, including Acura, BMW, Bugatti, Mercedes-Benz and Pininfarina, will be on hand to show off their latest concept and production models, many of them making their world debuts.
Here's an A-to-Z look at some of the more significant introductions that already have been confirmed for Pebble Beach Car Week.
AcuraAcura Type S ConceptSource: AcuraAcura, the luxury arm of Honda, will offer the public debut of the Type S Concept at the Quail, a Motorsports Gathering, on Friday. The Type S badge has been used on a number of limited-run Acuras over the past two decades but will soon become a regular part of the line-up as a challenge to such performance sub-brands as BMW M and Mercedes-AMG. The Type S Concept is based on the next-generation Acura TLX sedan that will come to market next year.
BMWA Vision M Next concept vehicle is revealed during an event of German car producer BMW in Munich, southern Germany, on June 25, 2019.Chirstof Stache | AFP | Getty ImagesBMW is a frequent participant in the Pebble Beach Car Week events and will have a number of different models to show off this year. That includes the North American debut of the Garmisch Concept that won wild acclaim during a debut at the concourse in Villa d'Este, Italy earlier this year.
Also on hand: the Vision M Next Concept which blends a variety of different technologies that could reshape BMW's future product line-up, including battery power and autonomous driving capabilities. The automaker is keeping some secrets, however, hinting that a production version of an older concept – possibly a high-performance 8-Series Gran Coupe – will also debut in Pebble Beach.
BugattiSource: BugattiBugatti will bring the most expensive new car ever sold, the $18.7 million La Voiture Noire, to Pebble Beach. But the ultra-premium arm of the Volkswagen Group has been building suspense by teasing plans to “unveil the next great project for La Marque” at the Friday gathering at the Quail Lodge.
What's in store? Speculation has been rampant, covering everything from a new one-off of Bugatti's only current nameplate, the Chiron, to something entirely new. During an interview with Automobile magazine this month, the brand's CEO Stephan Winkelmann confirmed Bugatti has been working on an ultra-exotic utility vehicle that could top 200 mph and cost as much as $1 million.
De TomasoThe DeTomaso P72 seen at Goodwood Festival of Speed 2019 on July 4th in Chichester, England. The annual automotive event is hosted by Lord March at his Goodwood Estate.Martyn Lucy | Getty Images Sport | Getty ImagesDe Tomaso is a name that delights serious classic car collectors but has been all but forgotten by most luxury buyers. The revived brand is bringing its new P72 supercar to the Monterey Peninsula — along with the only existing version of the old P70 race car developed by namesake Alejandro de Tomaso and the late Carroll Shelby in 1965.
InfinitiA Nissan Motor Co. Infiniti brand QX80 Monograph concept sports utility vehicle (SUV) sits on display during the 2017 New York International Auto Show (NYIAS) in New York, U.S.Andrew Harrer | Bloomberg | Getty ImagesInfiniti comes to Pebble Beach celebrating its 30th anniversary with an array of Edition 30 models. These are specially trimmed-out versions of its most popular product lines, the Q50, Q60, QX50, QX60 and QX80. It also will bring several of its earliest models to the second-annual Japanese Automotive Invitational, one of the many ancillary events that take place during the extended classic car weekend.
KarmaKarma Revero on display at the In goop Health Summit at 3Labs on June 9, 2018 in Culver City, California.Matt Winkelmeyer | Getty ImagesKarma, currently sells the Revero, an updated version of the plug-in hybrid from the old Fisker Automotive it purchased out of bankruptcy.
The now Chinese-owned battery-car brand has promised to expand its single-car line-up over the next few years and will give a hint of what's coming at the Pebble Beach Concours in the form of both the GT and the SC1 concepts. Designed by Italy's Pininfarina, the latter, all-electric model “is a signpost to Karma's future,” according to Karma CEO Lance Zhou.
LotusThe Lotus Evija electric hypercar, manufactured by Group Lotus Plc, a unit of Zhejiang Geely Holding Group Co Ltd., sits on display following its unveiling at the Royal Horticultural Halls in London, U.K., on Tuesday, July 16, 2019.Bloomberg | Bloomberg | Getty ImagesLotus was all but written off for dead a few years ago when its grand expansion plans collapsed. Sold to Geely, the Chinese company that also owns Volvo, it is making a grand entrance at Pebble Beach with the first of what it promises will be an assortment of new sports cars.
The Lotus Evija is an electric hypercar making 1,972 horsepower. That should be good for around 200 mph or, if you prefer, 250 miles per charge. Evija is expected to cost about $2 million.
McLarenThe McLaren GT seen at Goodwood Festival of Speed 2019 on July 4th in Chichester, England. The annual automotive event is hosted by Lord March at his Goodwood Estate. (Photo by Martyn Lucy/Getty Images)Martyn Lucy | Getty Images Sport | Getty ImagesMcLaren will bring to Pebble Beach both the new GT supercar set to go on sale for $210,000 late this year, as well as the McLaren GT by MSO, a heavily customized version of the 612-horsepower grand tourer.
Like several other exotics, the British marque is betting its affluent buyers are willing to reach even deeper into their pockets for bespoke one-offs that will pair unique design features — including custom colors — with performance.
PininfarinaFerrari's Pininfarina BattistaCompany handoutPininfarina is a name that will show up seemingly everywhere during Pebble Beach Car Week. The legendary Italian design house styled a number of classics at shows like the Concours d'Elegance, as well as new models like the Karma SC1 concept.
It's also bringing its own battery hypercar, the Battista, which made its debut at the Geneva Motor Show last March. This updated version now can deliver as much as 300 miles per charge, as well as a top speed of 217 mph and a 0-60 sprint of less than 2 seconds. The price tag? About $2.3 million.
PaganiPagani, the Italian-Argentine supercar company will use Pebble Beach as the stage to debut its own, all-new hypercar, the Huayra Roadster BC. Dubbed a “tribute to scientific research, beauty, and uniqueness,” by the automaker, it is powered by a 750-horsepower Mercedes-AMG V-12. For those who can't wait for the official intro, Pagani loaded a digital version of the Roadster into the CSR Racing 2 videogame. That will be a lot less expensive way to drive the hypercar, of which only 40 will be made – each carrying a $3.4 million price tag.
This is only a partial list of all the brands that will be on hand during the various events over the long week, in one form or another. Indeed, it will be the rare luxury marque that won't host a reception or place one of its concept vehicles on the lawn at the Lodge at Pebble Beach.
Collectors, meanwhile, will have an assortment of auctions to attend where some rare and unusual models will go across the block. Last year generated sales of nearly $120 million, according to McKeel Hagerty, CEO of Hagerty Insurance, which specializes in classic cars.
VIDEO2:0002:00The five hottest rides at this year's Pebble Beach Concours d'EleganceThe Bottom LineDisclosure: Paul Eisenstein is a freelancer for CNBC. His travel and accommodations to Pebble Beach were paid for by Bentley.
Chinese rideshare giant Didi Chuxing makes big move in driverless car race
A logo of ride-hailing giant Didi Chuxing displayed on a building in Hangzhou in China's eastern Zhejiang province.STR | AFP | Getty ImagesChinese ride-hailing giant Didi Chuxing ( “Didi”) has amassed more than 550 million users and 31 million drivers since taking to the streets of Beijing seven years ago. In the past three years, the global rideshare giant has devoted close attention to its autonomous driving unit. That unit became an independent company on Monday in a move designed to focus and designate more resources toward business development and product innovation.
The Uber-competitor established its autonomous driving team in 2016 and has since employed more than 200 people in China, as well as at its Mountain View, California research facility, where it has been working with various auto manufacturers like Volkswagen and Toyota Motors to test core innovative technologies.
Last month, Didi Chuxing received $600 million in corporate financing from Toyota, which includes directly establishing a joint venture with GAC Toyota, a joint venture between Toyota and a Chinese car maker. The new funds come as Didi continues heavy expansion in several new overseas markets, where it hopes to challenge Uber and other ride-hailing giants like India's Ola, Brazil's Easy Taxi and Singapore's Grab — a three-time CNBC Disruptor 50 company.
Didi Chuxing is also a notable Disruptor 50 company, breaking the top 10 at No. 4 in 2018 and No. 2 in 2019.
“Autonomous driving will greatly enhance the safety and efficiency of travel,” said Didi Chairman and CEO Cheng Wei in a release. “In the future, people's transportation needs … will be met by the combination of seamless autonomous driving technology and human driving services that are indispensable for their quality and warmth.”
To fund the new driverless car company, Didi is in new talks with SoftBank, according to a report from The Information. The Japanese tech and telecom giant has previously made multiple, large investments in the ride-hailing company. Based on the most recent funding round, Didi Chuxing has raised $22.74 billion and is valued at $57.6 billion.
In 2016, the same year that Didi's autonomous driving unit was established, SoftBank played an influential role in Uber's decision to sell its China business to Didi, notably pushing the U.S. ride-hailing giant out of the region and exposing Didi to their customer base outside of China for the first time.
Investors want clearer profit pathAsad Hussain, a PitchBook analyst and an expert in mobility, ride-sharing and autonomous vehicles, sees the company's decision as part of a broader trend consistent with the challenges that self-driving technology presents.
“Spinning out autonomous divisions enables these companies to raise outside capital and offers investors a more targeted bet on self-driving relative to investing in the parent entity,” he said. “We think this is a logical move for Didi and other ride-sharing companies facing pressure from investors to streamline costs and show a clear path to profitability.”
Didi went through a major round of layoffs earlier this year, according to multiple reports, as it continues to lose money, like its competitors. Uber recently announced 400 job cuts in its marketing team.
Waymo, Alphabet's autonomous vehicle unit, also announced that it would raise outside capital for the first time this past March, positioning itself to cut costs and limit downside risks.
Didi's Chief Technology Officer (CTO) will head the new autonomous driving company as CEO. In an email to CNBC, a communications representative for Didi said that the company does not currently have plans for an IPO.
Uber and Lyft, the U.S. rideshare leaders with heavy investments in driverless vehicles, have fared poorly after highly anticipated IPOs earlier this year as investors doubt how quickly they can become profitable.
VIDEO2:4902:49There will be consolidation in the driverless car industry: Pony.aiSquawk Box AsiaIn a recent survey, auto and tech industry experts predicted it will be at least 12 years before fully autonomous vehicles are being sold to private buyers. While Tesla CEO Elon Musk says 1 million Teslas capable of being robotaxis will be on the road by the end of next year, industry experts say robotaxis will not be ready for widespread public use until 2025.
Last week, General Motors subsidiary Cruise, postponed a planned launch of an autonomous ride-share service as it continues developing, validating and making sure its self-driving cars are ready.
“What's most important when we do launch this service is that we do it the right way,” Cruise CEO Dan Ammann said.
Automakers trim production as market weakens – but hope to avoid wholesale cuts of a decade ago
James O'Neal attaches a fender in the body shop at GM's Chevrolet Silverado and GMC Sierra pickup truck plant in Fort Wayne, Indiana, July 25, 2018.John Gress | ReutersGeneral Motors will trim production of the Chevrolet Equinox SUV at two North American car plants, a move that follows cuts announced by Ford, Honda and other manufacturers.
Automakers are facing what is only the second down market since the end of the Great Recession and the record sales that followed. How far down demand will go this time is a matter of debate, with analysts and planners warning that could depend on how the Trump administration handles disputes with China and other trade partners.
Industry officials, including General Motors CEO Mary Barra, say they learned critical lessons during the last recession and hope to be more proactive this time around, adjusting production early to stay in line with market demand while avoiding the sort of budget-busting incentives that devastated industry balance sheets a decade ago.
GM's latest cutback primarily targets the Equinox but also impacts two other SUVs, the GMC Terrain and Chevrolet Trax, and heightens concerns that the increasingly crowded list of new utility vehicles coming to market will create additional headaches for the industry.
GM plans to drop one of the three crews working at its San Luis Potosi plant in Mexico, spokesman Dan Flores confirmed in a telephone interview with CNBC. The factory produces the Equinox, GMC Terrain and Chevrolet Trax SUVs, all of which will see production cut. In addition, a factory in Ingersoll, Ontario that solely produces the Equinox will be idled for one week during late September.
The automaker is “focused on profitable sales and (we) want to do things that make good business sense. We're committed to running the business in a responsible manner,” Flores said. That echoes comments CEO Barra has made on several occasions that GM won't repeat a key mistake made in the run-up to the Great Recession. Rather than trimming production to meet demand, it relied on increasingly hefty incentives that ultimately ran up its losses and contributed to its eventual bankruptcy.
Ford echoed that approach in a statement, citing “long-standing practice of matching production with consumer demand” for its decision to curb operations at its Oakville, Ontario plant next month. The factory produces four SUVs — the Ford Flex, Ford Edge, Lincoln MKT and Lincoln Nautilus models. About 200 workers will be idled, and Ford cautioned further cuts could follow.
Honda, meanwhile, confirmed this week it has reduced production of its Accord and Civic models at its Marysville, Ohio plant. Nissan trimmed output in Canton, Mississippi, as well as its operations in Mexico in recent months, while also offering voluntary buyouts to an unspecified number of U.S. employees.
The second-largest Japanese automaker last month announced plans to cut production worldwide by 10% over the next three years, while eliminating 12,500 jobs. CEO Hiroto Saikawa told reporters during a news conference that “our situation right now is extremely severe.” A U.S. spokesman said Nissan has already made the necessary adjustments in the U.S., but several analysts said further cutbacks could be needed, pointing to the 8.3% decline in its sales for the first seven months of 2019.
Across the industry, the biggest cuts have focused on the passenger car side of the market. GM, for one, announced last November plans to close three North American assembly plants, while dropping an array of sedans including the Chevrolet Cruze and Impala, as well as the Cadillac CT6. The automaker's plant in Lordstown, Ohio has already been shuttered but one in Detroit is now scheduled to operate through at least early 2019.
The United Auto Workers Union has said the fate of the two U.S. plants will be a critical topic during contract talks with GM that began last month. During meetings on Capitol Hill last December, CEO Barra said the automaker has no plans to reverse its decision, however, and has already lined up a tentative buyer for the Lordstown factory.
What concerns industry observers is that there are signs demand for SUVs may be leveling off in some market segments, something signaled by recent cuts such as those of the four Ford utility vehicles.
Complicating matters, “While people are talking about fabulous SUV sales, the market is getting saturated with them and inventories are building while incentives are growing,” said Michelle Krebs, executive analyst with Autotrader.com.
Industry planners have been aggressively trying to manage inventories of unsold cars as sales have slowed this year. The numbers are now climbing up the high side of normal, ending July at a U.S. market average of around 67 days of stock, Krebs noted, up three days from May. The norm is closer to 60 days supply.
Traditionally, they've relied on incentives to hold down inventories and the numbers are rising. The average giveback in July was $3,911 per vehicle, according to research by Cox Automotive, a 4% year-over-year climb. On some pickups, meanwhile, the numbers have reached $10,000 or more.
But “this is an industry that remembers quite vividly what happened a decade ago,” said Stephanie Brinley, principal analyst with IHS Markit. Leading into the Great Recession, they kept ratcheting up the givebacks “to keep their plants running and production up. But they found there was a point where that eroded profitability to a point that couldn't be sustained.”
The challenge now, said Brinley, is to be “proactive,” and use production cuts to keep sales and inventories in balance, rather than waiting to be “reactive.”
Several industry executives, talking on background, said a key concern is what ongoing trade disputes could mean for the U.S. economy and, in particular, the auto market — a concern highlighted by the sharp downturn on Wall Street after the latest moves by the Trump administration and China.
There are other factors that could cause trouble. New car prices have reached record levels, at an average of around $33,000 for July, reported J.D. Power and Associates. Coming in $1,400 more than a year ago, that threatens to drive some potential buyers out of the market, Power said, at a time when there's a bubble of “nearly new” off-lease vehicles now flooding the market. Meanwhile, automotive interest rates have spiked to around 6%, according to data from tracking service Edmunds.
Barring an economic meltdown, analysts like David Andrea, a principal at Plante Moran, don't see more complete plant shutdowns in the works.
“Manufacturers are showing increased discipline going into the softening of the market,” he said, “but you'll see a lot more of these temporary reductions to keep inventories and incentives in check.”
Honda drivers can now get Amazon parcels delivered to the trunk of their car
HondaHonda drivers in the U.S. who use the auto firm's “cloud-based connected car system” can now get their Amazon parcels delivered to the trunk of their car.
In a statement earlier this week, Honda said that drivers with a subscription to the HondaLink Remote Services system and a compatible vehicle would be able to use the Key by Amazon app to select an “in-car” delivery option.
On the day of delivery, users of the service must park within two blocks of a selected delivery address. When it's confirmed that the car is in range of the address, a delivery driver will use its GPS location to determine the exact position.
The driver will then scan the package before sending a request for the vehicle to be unlocked so it can be dropped off. The vehicle is then re-locked and the customer is sent a notification to confirm the delivery was made and that their vehicle is secured. Customers need an Amazon Prime subscription to use the service, which is currently available in a select number of cities and surrounding areas.
Honda is the latest car company to utilize the system. Others include GMC and Volvo. The cars have to be 2015 models or newer and need connected service systems.
More broadly, innovation is transforming the way goods and services are delivered. Earlier this month, U.K. supermarket Waitrose announced it would be expanding the trial of its “While You're Away” delivery service.
Yale smart-lock technology gives Waitrose delivery drivers access to a customer's home. The customer sets a temporary access code for their lock, which is sent to Waitrose through a secure app.
This code is in turn sent to a driver's device for the time slot the customer has booked their delivery for and deleted when the delivery is made.
The driver packs refrigerated and frozen goods away and leaves other items on the kitchen counter, or wherever the customer has asked them to be left. A chest-cam worn by the driver records the delivery, with customers able to view the video upon request.
VW subsidiary to help with pilot of robotic charging stations for self-driving vehicles
Electrify AmericaElectrify America, a subsidiary of Volkswagen Group of America, will work with fleet charging firm Stable Auto to roll out robotic fast charging systems for self-driving electric vehicles (EVs).
In an announcement toward the end of last week, Electrify America said the pilot would be based in San Francisco, with the charging site slated to open at the beginning of 2020.
The goal of the trial is to charge autonomous electric vehicles without requiring “human intervention”. A “robotic solution” will be connected to a 150-kilowatt, direct current fast charger. Electrify America will supply chargers for the project.
The idea is that the site will enable electric vehicle fleets to charge up with “no operators present.” Vehicles will drive into a parking space and one of Stable Auto's robots will be used to “automate the connection between the vehicle and the charger.”
Electrify America's director for infrastructure planning and business development, Wayne Killen, said in a statement that autonomous vehicles would “play an important role in the future of driving, particularly with fleets, and tailored charging options for self-driving EVs will be critical to develop that effort.”
While there is excitement in some quarters regarding the potential of autonomous vehicles, work remains to be done.
In February 2019, the CEO of Arm Holdings told CNBC that it would be “a while” before self-driving cars became mainstream.
“It is a phenomenally hard problem to anticipate what a car could do under absolutely any set of circumstances,” Simon Segars, who was speaking to CNBC's Karen Tso at Mobile World Congress in Barcelona, Spain, added.
“I think you're going to start to see early services, in quite a constrained way, quite soon over the next couple of years,” he added, explaining that there was “some way to come” before the technology was “completely mainstream.”