Daily Digest Aug 20, 2024

BUSINESS

Daily Digest Aug 20, 2024

Price Pulse: August Sees a Slight Uptick in Wholesale Values

In the first half of August, wholesale used-vehicle prices experienced a slight rise, with a notable demand for three-year-old vehicles driving market activity. Despite year-over-year declines, the market shows signs of stabilization as various segments adjust to current economic conditions.

• Price Changes:

  • Wholesale used-vehicle prices increased by 0.5% in the first half of August.

  • Manheim Used Vehicle Value Index rose to 202.6, down 4.5% year-over-year.

  • Non-adjusted prices were up 1.6% from July but down 5.2% compared to August 2023.

  • MMR prices in the Three-Year-Old Index increased by 0.4%.

• Segment Performance:

  • Luxury segment: Prices declined 4.1% year-over-year.

  • Midsize cars: Prices fell 4.3% year-over-year.

  • SUVs: Prices dropped 5.0% year-over-year.

  • Pickups: Prices decreased 5.6% year-over-year.

  • Compact cars: Prices declined 6.2% year-over-year.

  • EVs: Values decreased by 7.2% year-over-year but increased by 4.4% from July.

  • Non-EVs: Values rose by 1.1% from July.

Market Supply and Consumer Sentiment

The market supply and consumer sentiment indicators offer a mixed outlook, with some improvement in buying conditions but continued concerns over pricing and economic factors.

• Wholesale Supply:

  • Wholesale supply dropped to 25 days as of mid-August, remaining flat year-over-year.

  • Supply decreased by two days from the end of July.

• Consumer Sentiment:

  • University of Michigan’s Consumer Sentiment Index increased by 2.1% to 67.8.

  • Vehicle buying conditions improved slightly but remain low.

  • Gas prices decreased by 1.4% month-to-date, averaging $3.43 per gallon.

Corporate Maneuvers: GM's Layoffs and Losses in Focus

General Motors is laying off over 1,000 salaried employees globally, including 600 at its Detroit tech campus, to streamline operations for speed and excellence.

Meanwhile, GM reported a $104 million loss in China for Q2, with CEO Mary Barra describing the market as a “race to the bottom” amid ongoing price wars. Despite the challenges, Barra expressed optimism about future growth in China, emphasizing aggressive cost reductions and strategic restructuring efforts.

Contract Conflicts: UAW's Ongoing Battle with Stellantis

UAW President Shawn Fain escalated his criticism of Stellantis CEO Carlos Tavares, accusing him of price gouging and failing to honor parts of the union’s labor contract. Fain specifically highlighted Stellantis's decision to halt the reopening of an Illinois assembly plant and blamed Tavares for declining sales and job cuts despite the company's increased profits.

This marks the latest chapter in the ongoing tension between Fain and Tavares following last year's contentious bargaining talks. Tavares, who has been on a cost-cutting mission, defended the company's actions as necessary for profitability.

I’d also like to file a complaint against Stellantis. Why are you the only automaker whose name is treated like a misspelled word by Grammarly? Do better…

New Developments: Lamborghini's Cautious EV Rollout, Ford's Mustang Expansion, and an Unusual Alliance

Lamborghini is nearing the release of its first full EV but is holding off due to market concerns, including high depreciation rates. Meanwhile, the new hybrid Lamborghini Temerario, boasting 907 horsepower, will debut next year as a thrilling alternative for buyers.

Ford is reportedly planning to expand the Mustang lineup to include a sedan and an off-road variant, showcased at a dealer conference. These additions, along with a new high-performance drop-top and specialized EcoBoost version, signal Ford’s strategy to double down on the iconic Mustang brand.

I kinda miss knowing what Mustang means. Like, at a time it meant “hella dope muscle car” but now it may mean electric mini-SUV. Someday it may include horses again. Who knows.

Chechen leader Ramzan Kadyrov showcased a Tesla Cybertruck mounted with a machine gun, claiming it was a gift from Elon Musk, who later denied any involvement. Kadyrov plans to send the vehicle to Russian forces in Ukraine, calling it "invulnerable" and praising its capabilities in a video.