3 of 4 GM Brands Sales Decline

We’ve all seen the ups and downs of General Motors, but with an intensifying union strike and decline in sales, the future of GM remains a mystery.

Of the four brands owned by General Motors, sales continue to weaken for three of them. Sales for all GM brands plummeted 28 percent, with truck sales improving 5.9 percent according to the Automotive News Data Center. The company’s overall sales have decreased by 1.1 percent to 2.1 million through the month of September. 

The Chevrolet, Cadillac, and GMC brands all had a drop in sales, while the sales for Buick models increased by 4.8 percent thanks to its Encore and Envision models.

 

Here’s the breakdown (rough estimates according to Automotive News Data Center):

Buick: Up 4.8%

Cadillac: Down 4.8%

Chevrolet: Down 13%

GMC: Down 6.9%

According to Michelle Krebs, executive analyst for Autotrader, “The real story for the auto industry will be told in the coming weeks as Chevy and GMC dealers run low on pickup trucks to sell, with the UAW strike against General Motors leading the company to idle the plant in Mexico that makes the Silverado and Sierra, Dwindling inventory comes at a time of year when pickup truck sales are strong, and at a time when GM is in launch mode with its full array of new, full-size trucks. This will put the Chevrolet Silverado even further behind the popular Ram in sales. Most importantly, fewer pickup truck sales will impact Q3 and now Q4 profits at GM since pickup trucks account for the bulk of the income.”

In addition to the decline in overall sales for GM, their union strike has just entered its fourth week, and a union leader says that company negotiations have “taken a turn for the worse.” This union strike is bound to have a negative effect on the company and their financial standing.

According to CNN, General Motors announced that they will reduce their workforce by 15 percent including a quarter of the company executives. In addition, GM also announced that five of its production facilities will be shutting down. With GM’s major business overhaul, many workers are left looking for new jobs in the industry.

While GM is no stranger to hardships, it’s closing of 5 factories may indicate a grim future for the automotive company.

The Electric Surge

With Automotive companies investing heavily in the EV market, here are several vehicles you will be seeing in the near future: 

In 2020:

Aston Martin Rapide E: Making its auto show debut in Shanghai, the Rapide E features an 800-volt electrical system encased in carbon fiber and Kevlar, with 65-kWh capacity. Although the company has not announced the exact release date, the Rapide E is expected to go on sale in 2020.

BMW: Automaker BMW is wasting no time when it comes to producing electric vehicles. The automaker plans to produce a 3 series plug-in hybrid, improved X3 plug-in hybrid, and X5 plug-in hybrid all in 2020.

Ford Escape: Ford announced the fourth-generation Escape hybrid said to launch in spring 2020.

Ford Mach E: Move over Tesla, Ford is coming out with a brand-new Electric Vehicle that is said to be inspired by the Mustang. The Mach E is a crossover with a 300-mile range.

Jeep Wrangler: The classic, rugged Jeep Wrangler is notorious for being a bit of a gas guzzler- until now. Jeep recently announced a plug-in hybrid option Wrangler said to roll out in 2020.

Kia Soul: The notoriously boxy Kia Soul has been completely re-design and modernized for the 2020 lineup. While the soul EV has been around for quite some time, the new and improved version has a 64-kWh battery with 243 miles of range. Kia has committed to producing many more electric vehicles in the future.

Mercedes-Benz EQA: Mercedes-Benz is working tirelessly to deliver the best and brightest in luxury electric vehicles. Mercedes’ EQ sub-brand will feature an impressive lineup of electric cars including the EQA and EQC compact crossover.

Amazon Commits To 100,000 Rivian Delivery Vehicles by 2021

Online shopping giant Amazon is committing to 100,000 new electric delivery vehicles in 2021. 

Electric vehicle startup company Rivian just made the deal of a lifetime. Amazon executive Jeff Bezos said that it would order 100,000 vans from Rivian in an effort to be carbon neutral by the year 2040. Amazon’s goal is to have all of its Rivian vehicles up and running by 2024.

Rivian is an electric vehicle startup company founded in Plymouth, Michigan. Founded in 2009, Rivian has received billions of dollars of investments from companies like Cox Automotive, General Motors, and Ford Motor Co. Rivian plans to be the first company to produce a mass-market electric pickup, the R1T, which will hit the market by the end of 2020. The Amazon delivery vans will be produced at a former Mitsubishi factory in Normal, Illinois according to Rivian spokeswoman Amy Mast. Prior to the Rivian deal, Amazon had purchased 20,000 sprinter vans from Mercedes-Benz.

How will this deal affect Rivian? Because of Amazon’s stellar reputation and increasing popularity, the value of the company is projected to grow. According to Vice President of Auto Forecast Solutions, “It helps boost the image of the brand.” Some even expect Rivian to become a potential rival to Tesla, Inc.

To give an idea of just how much confidence is in Rivian, here’s a breakdown of how much has been invested into the company already:

  • Cox Automotive: $350 million
  • Ford: $500 million
  • Amazon: $700 million

Rivian plans on making its Amazon delivery vans with the custom exterior, interior, software and suspension according to a spokesperson for the company. By 2030, Amazon expects to have a full fleet of electric delivery vans on the road. Rivian has developed one “skateboard” design, on which all its vehicles are based. That includes a 180-kWh battery pack and, according to Rivian, good for 450 miles of range, even in a heavy, not-so-aerodynamic vehicle.

Once the full fleet of Rivian vehicles hit the road, Amazon will have roughly 130,000 vehicles delivering packages. Going fully electric will not only cut down on the company’s fuel costs but will alleviate some employees who are upset about how delivery vehicles are contributing to climate change.

All in all, the deal between Amazon and Rivian will surely have a positive impact on the environment. With 100,000 new electric vehicles, Amazon hopes to inspire other companies to make the switch. Because electric vehicles can easily be charged at night, electric fleet vehicles are becoming more and more popular with companies. Cutting on fuel costs and saving the environment, Amazon may be the first of many brands to go electric

Americans Are Biting Off More Than They Can Chew When It Comes to Auto Loans

The average loan term is over 60 months and $30,000… can people still afford to buy new cars?  

No, that shiny new car isn’t a necessity, but we want it- and some Americans are willing to go great lengths to get it. What new car owners see is the new car, immaculate interior, and the odometer at 5 miles. What many drivers do not see is that new-car loans are more expensive than they’ve ever been before. Aside from that, many are rolling their old loans into new loans, which is a recipe for financial disaster.

According to a report by The Wall Street Journal, only 18 percent of households in the United States can afford to pay cash for a new car. With so many people living beyond their means, it’s easy to get caught up in an unfavorable car loan. What’s difficult is having the willpower to buy a used car when many consumers want a new car.

According to Experian, the average new car loan was $32,119 during the second quarter of this year. For a used car, it was $20,156. Of those with loan payments, over seven million people are 90+ days behind on their payments. To make matters even worse, The Consumer Financial Protection Bureau estimates that 42 percent of all car loans made in the year 2017 were 72 months or longer, with the average loan length for new cars at 69 months.

With the country swimming in $1.2 billion of auto debt, it’s easy to get caught up in the mess. While some monthly payments may seem small, the overall price of many loans (including monthly taxes, fees, etc.) can become much higher when interest is added. According to the Wall Street Journal, average interest rates are at 10 percent for used cars and 6 percent for new cars. A third of all car owners now roll their debt into new loans, compared to only a quarter of car owners before the 2009 recession.

New AAA Study asks: How “Smart” is New Vehicle Technology?

With so many new safety features rolling out, AAA analyzed how effective these automobiles really are. 

According to the American Automobile Association (AAA), new vehicle safety features aren’t all they’re cracked up to be. Testing done by the association shows an inconsistency in the effectiveness of pedestrian-detection technology. AAA tested four popular sedans- the Honda Accord, Chevrolet Malibu, Toyota Camry, and Tesla Model 3. The vehicles were put through various scenarios meant to simulate dangerous pedestrian situations. 

Successful pedestrian detection relies on radar, cameras and various sensors to detect people in the vehicle’s way. Once the car alerts the driver, the driver must react quickly. If the driver does not react, the car will brake automatically. This prevents a potentially fatal accident from occurring

When testers drove the cars directly toward a dummy in the dark, not only did the cars fail to brake, but completely failed to detect the pedestrian. Even at 20 miles an hour, the cars had a difficult time passing the AAA test. During the testing, pedestrians were hit approximately 89 percent of the time. 

While Tesla declined to comment on the matter, Honda said its customers are aware of the car’s technological limitations and provides a warning for all drivers to always keep their eyes on the road (featured in every owner’s manual). GM said its technologies are beneficial to customers but do not replace the primary responsibility of the driver. Toyota said its pedestrian-detection technology has performed well in other tests performed by AAA.

According to the National Highway Traffic Safety Administration (NHTSA), nearly 6,000 pedestrians were killed in 2017 due to traffic accidents. Of those 6,000 accidents, many are pedestrian fatalities. According to AAA director of automotive engineering Greg Brannon, “Pedestrian fatalities are really becoming a crisis. While pedestrian-detection systems have the potential to save lives, drivers shouldn’t become overly reliant on them to prevent accidents.” 

The AAA study proves that technology is never a perfect science. AAA worries that the way automotive companies advertise these safety features can leave drivers with the impression that they’re safer than they really are. 

While new vehicle safety features are constantly improving, the best safety measure you can take is to always pay attention to the road. With pedestrian fatalities occurring at alarming rates, it is especially important to remain focused and never find yourself distracted while driving.