Don't look now, but we're at the official start of fall. The change of season shouldn't slow down business, but persistent inflation and rising interest rates might (as this is being written, the Federal Reserve raised interest rates by 0.75%).
As we've pointed out previously, the used car side of the industry continues to normalize (or decline, depending on what you're looking at). In contrast, there's no sign that the path to an EV future is slowing down as GM and Hertz partner for 175,000 vehicles.
There's also some good news and bad news on U.S. traffic fatalities.
Market At A Glance
You can check our usual coverage of the CarGurus used car index here (hint: it's flat from last week). But, read on for what others have to say about this part of the market.
- Bosch Warns Auto Industry About Putting All Its Eggs In The Lithium-Ion Basket - CleanTechnica
- Record shipping costs add to supply chain woes - Auto News
- Tesla recalls nearly 1.1 million U.S. vehicles to update window reversing software - Reuters
- Toyota cuts July global production plan by 50,000 vehicles - Reuters
- As many as 45,000 Fords can't be sold due to missing parts - CNN Business
Manheim Used Car Index Drops
Turning to the folks at Cox’s Manheim, we learn that wholesale used car prices fell 2.3% (on an adjusted basis) for the first half of September compared to August. This change to 205.9 marks only a 0.6% increase from September 2021.
But, a look at specific used vehicle segments reveals interesting variations. On a year-over-year basis, wholesale values for pre-owned compact cars rose 7%, the highest of any market class. Why? Consumers are looking for more cost-efficient transportation due to high gas prices and inflation.
Luxury cars and SUVs suffered a similar fate (down 3.4% and 1.2%, respectively). There were gains, too, with vans rising 1.1%. In addition, pickups climbed 0.8%, and mid-sized cars rose 0.6%.
Used Vehicle Supply Stabilizes, But Is Tight With Some Brands
Looking at another element of the used car business, Cox Automotive reports that there were 2.46 million unsold units in the U.S. at the end of August (about the same as July)—that works out to 49 days' supply.
"Inventory volume at the end of August was 10% above year-ago levels, so we're seeing some improvement. In fact, we're tracking at a fairly normal pace for supply," remarks Cox's Chris Frey. He adds, "While used-vehicle sales in total so far this year are down 16% from 2021, the year is tracking in a normal trend line," said Frey. "The latest uptick in August suggests resilience in the used market."
But inventory gets a bit tighter with some Asian brands of used vehicles.
GM and Hertz Team Up for EVs
Calling it the largest EV expansion among fleet customers, General Motors and Hertz announced a plan this week to put 175,000 GM EVs in the hands of rental car customers. The five-year effort calls for a broad range of gasless Chevrolet, Buick, GMC, Cadillac, and BrightDrop vehicles to make their way to 500 Hertz locations in 38 states.
The GM-Hertz program will help increase EV encounters among the public but could place production pressure on General Motors, especially as it ramps up for an electric future. Hertz hopes to ride the EV wave as it seeks to convert 25% of its fleet to electric by the end of 2024. Under the agreement, the first vehicles to be delivered will be Chevrolet Bolt EVs and Bolt EUVs in the first quarter of 2023.
Neither company provided a dollar value for the deal, but last year Hertz and Tesla inked a $4.2 billion arrangement for 100,000 Model 3s.
The Downs and Ups of Traffic Fatalities
This week, the National Highway Traffic Safety Administration (NHTSA) reported a decline in U.S. traffic deaths for the second quarter of 2022. The NHTSA projection marks the first drop after seven quarters of increases. Motorists and passengers will take any good news they can get.
However, the data also shows numbers heading in the wrong direction. For the first half of 2022, the federal agency estimates 20,175 traffic-related fatalities, a 0.5% increase from the same period in 2021. Vehicles in the U.S. traveled 43.2 billion miles for the first six months of 2022, a 2.8% increase from last year.
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