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Lincoln focused on ‘experience’ as brand sales grow
The Lincoln brand has been changing its image, and it's working. With sales up 10% in 2016 and up 7.5% through March 2017, it seems the brand's strategy is paying off. Regarding the new Continental, AutoPacific's Dave Sullivan says, "The Continental is the first Lincoln in a very long time that doesn’t look like the Ford interior designer was loaned out to the Lincoln team."
Tesla’s market value tops Ford’s
Tesla’s stock-market value has surpassed Ford’s by about $3 billion, supplanting Ford even though it delivered fewer than 80,000 vehicles globally last year. AutoPacific's Dave Sullivan says, “It’s mind-boggling that a company that has the global breadth and depth that Ford has is suddenly valued at less than or equal to Tesla...It does not compute.” Analysts believe things may change as Tesla enters a more mainstream EV market with the Model 3 and pushes beyond luxury buyers. Sullivan says “By the end of this decade, there’s going to be some significant choice for consumers looking for an electric vehicle."
Ford's health plan: Slim down inventory
Ford CFO Bob Shanks warned analysts and investors, "don't be surprised" if Ford cuts production or temporarily idles assembly lines across North America in the coming months. The strategy, meant to avoid bloated inventory, will also eat into revenue. AutoPacific's Dave Sullivan says it's a dangerous plan. "Closing a plant down for a week or reducing a shift reduces the amount of vehicles made and therefore reduces revenue....That's what makes it dangerous; when you know your revenue is what you push out the door. If there is no demand, you can continue to push, and that's when bad things happen."
Rollbacks unlikely on fuel standards
Is President Trump's pledge to review U.S. fuel economy standards the first step in returning to unregulated, high-pollution gas guzzlers? Industry experts say no. While there may be some recalibration, most automakers compete globally, meaning they face strict emissions standards in other markets. There’s also California, whose statewide standards are stronger than the rules in the United States. Carmakers have made significant progress in making more-efficient vehicles. AutoPacific's Ed Kim says, "These technologies have appreciably made new vehicles better. I don’t think people are going to want to go backwards.”
Trump's Big Border Tax: Answers for Car Shoppers
President Trump has threatened escalations in tariffs on foreign-made goods if U.S. manufacturers, including automakers, don't bring more manufacturing stateside. About 60% percent of U.S. light-vehicle sales in 2016 came from cars and trucks built in the U.S. AutoPacific's Dave Sullivan says "[a] 35% tariff on anything — [even a] 10% tariff on an $11,990 car, takes away from a car, from having a new car that people can afford."
Hefty Truck, SUV Profits Fuel U.S. Auto Industry Investment, Jobs
Automakers are pushing new investment in U.S. production of trucks, crossover and SUVs to tap into the higher profit margins they yield. The reason: they make automakers a lot of money. AutoPacific's Dave Sullivan says automakers spend about the same amount to make a vehicle, whether it’s a crossover or truck or sedan. Additionally, says Sullivan, “We haven’t really hit the theoretical ceiling for what consumers are willing to pay for pickup trucks. So the margins just keep growing.”
2018 Camry: The more things change …
Toyota's Akio Toyoda introduced the 2018 Toyota Camry at the NAIAS in January, saying "We view this as an opportunity to reignite the midsize sedan market...why should SUVs get all the glory?" Calling the vehicle "sexy," and the sport model "very sexy," drew some laughs from the crowd. AutoPacific's Dave Sullivan said, "It is a very evolutionary change...a vehicle design for what Camry buyers know and love. They are definitely pushing the envelope in how far they can take the Camry without it looking like a wild child."
Ford Bronco, Jeep Wagoneer: Will Trump bring gas guzzlers back from the dead?
Automakers are reviving hefty sport-utility vehicles and trucks. The wave of new, or old, vehicles may reflect a perception that the Trump administration will curb fuel-economy standards, freeing automakers to sell more high-profit vehicles while undermining the environment by increasing carbon emissions and accelerating climate change. Analysts think they could be big moneymakers. AutoPacific's Dave Sullivan says, “Automakers are looking to cover every bit of 'white space' in the market with vehicles coming back, like Ranger and Bronco."
In race to get driverless cars on the road, Ford speeds ahead
Ford Motor Company recently revealed an ambitious strategy to make fully autonomous cars available for sale by 2021 - at first used for ride sharing and ride hailing, with sales to individual drivers an indeterminate number of years after that. AutoPacific's Ed Kim comments on the significance of this goal: “It is a great technological accomplishment to be able to offer such a level of autonomy in such a short amount of time.”
Kia's Latest Cadenza Brings Flair To A Shrinking Large Sedan Segment
AutoPacific estimates that large sedans will make up just 2.3% of the light vehicle market in 2016, selling just over 400,000 units. So what does Kia, which prides itself on being a dynamic and edgy brand, see in continuing to compete in this segment? AutoPacific's Ed Kim recently drove the all-new for 2017 Kia Cadenza. A vehicle he says, "stands out as a very well differentiated product" among its direct competitors and "is well deserving of an audience among the young-at-heart, if not actually young."