The Average Cost Of A New Car Jumped $10,000 In Five Years

Happy Wednesday! It’s December 20, 2023, and this is The Morning Shift — your daily roundup of the top automotive headlines from around the world, all in one place. Here are the important stories you need to know.

1st Gear: The Average New Car Now Costs $48,247

It’s the most wonderful time of the year, when automakers and dealers slap thousands of dollars on the hoods of cars just to get them out the door before the ball drops in Times Square. Yet, despite the incentives, the average new-car transaction price has still jumped over $10,000 in the past five years. From Reuters:

Over four consecutive years of year-end sales, automakers have offered minimal discounts to prospective customers as they looked to cash in on new vehicle demand, helping dealers clear inventory.

However, the average transaction price (ATP) for new vehicles in November 2023 fell 1.5% to $48,247 from a year ago, according to data from Kelley Blue Book. The ATP was $39,203 for the same period in 2019.

Additionally, inventory levels are currently at their highest since the early spring of 2021, leaving dealers and automakers scurrying to make way for new models, which are set to pour in by January.

Automakers have already started offering incentives and lowering transaction prices to get more buyers to snap up new vehicles.

“New-vehicle sales incentives were up 136% year over year in November, indicating the new-vehicle market is shifting to a buyer’s market, not a seller’s market,” Cox Automotive said in a report. Average incentives are currently hovering around the $2,500 mark.

Maybe those massive inventories have something to do with that ten-grand price increase. I’m no economist, but given that cars generally cost a lot and last a while, I’m willing to bet that new vehicles are a fairly elastic good. When prices get too high, folks can always just buy used.

2nd Gear: Almost Half Of Buick Dealers Are Throwing In The Towel On EVs

Have you ever been to a dealership that just seemed entirely uninterested in selling you a car? That’s apparently the mood of nearly half of all Buick dealers, who — when given the option to invest in selling new cars to new customers — instead elected to give up the franchise entirely. From Automotive News:

Nearly half of Buick’s U.S. dealerships left the brand this year after it offered buyouts for those who didn’t want to invest in selling electric vehicles.

The General Motors brand on Tuesday said it will end the year with about 1,000 dealerships nationwide, 47 percent fewer than at the start of 2023. Buick offered to buy out retailers who did not want to invest hundreds of thousands of dollars on tooling, equipment and training to prepare to sell and service EVs as the brand goes all-electric by the end of the decade.

We love forward-thinking moves, don’t we folks? As GM winds down its ICE offerings, these Buick dealers who didn’t make the investment will simply have to become used-car lots or service centers. They may be betting on the failure of EVs, but that’s a bet against an entire industry and its regulatory apparatus. Not a bet I’d make.

3rd Gear: Toyota Subsidiary Halts Sale Of All Models After Rigged Crash Tests

We may not get Daihatsu cars here in the U.S., but in other parts of the world they’re incredibly popular — tiny, cost-effective commuters built more for tight urban environments than wide-open American highways. They’re also, apparently, less safe for their occupants than previously advertised. From Reuters:

Toyota Motor’s Daihatsu unit will halt shipments of all of its vehicles, Japan’s biggest automaker said on Wednesday, after a safety scandal investigation found issues involving 64 models, including almost two dozen sold under Toyota’s brand.

An independent panel has been investigating Daihatsu after it said in April it had rigged side-collision safety tests carried out for 88,000 small cars, most of those sold as Toyotas.

…

The investigation found that the airbag control units used by Daihatsu in airbag tests for some models were different from the ones used in cars sold to the public, including Toyota’s Town Ace and Pixis Joy models and the Mazda Bongo.

Toyota said it was not aware of any accidents related to the issue. It said side-collision tests of two models may not be law compliant even as verifications confirmed that the airbag met passenger safety standards.

Japan’s transport ministry said it would carry out an on-site inspection at Daihatsu’s headquarters in Osaka on Thursday.

If Daihatsu willingly admitted to faking crash tests, how bad are things really at the company? It seems that’s what the investigators are now trying to determine.

4th Gear: Ford Had More Recalls In 2023 Than Any Other U.S. Automaker, Again

All automakers have recalls. Some have more than others. Here in the U.S., it seems none have more recalls — or bigger recalls — than the Blue Oval, year after year. Things seem to be stabilizing for Ford, given that it had fewer recalls this year than in 2022, but it’s still not a great feeling for overall quality. From Automotive News:

For the third year in a row, Ford Motor Co. had the most recalls of any U.S. automaker, partial NHTSA data shows.

Through Dec. 18, Ford issued 54 recalls affecting nearly 5.7 million vehicles in the U.S. this year. However, that’s down about 21 percent from the number of recalls it issued in 2022, when the automaker reported 68 recalls affecting more than 8.7 million vehicles.

In 2021, Ford issued 53 recalls affecting nearly 5.4 million vehicles. General Motors led with the highest volume of vehicles and equipment recalled, totaling nearly 8 million for that year, according to the data.

This story is also a great look into the scale of auto manufacturing in the United States. Tesla, the company that recently recalled every single vehicle carrying its flagship Autopilot tech, doesn’t even come close to the total recalls from Ford.

Reverse: Do You Know How Long It Takes A Working Man To Save $5,000?

Neutral: What’s Your Christmas Morning Method?

I was watching A Christmas Story yesterday, and it got me thinking about different approaches to Christmas morning. In my family, the rule was always “stocking presents only until all the parents are awake,” but Ralphie’s family seems to just let the kids run roughshod over all the gifts. If you celebrated Christmas growing up, what was your approach? If not, did you have a weird take on another holiday?

On The Radio: HEALTH – “DSM-V”

HEALTH :: DSM-V :: LYRIC VISUALIZER