Skip the May Pole. Grab a Banner Instead. (Really?)

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By Gary S. Vasilash

A country’s GDP—gross domestic product—is a measure of the value of goods and services produced for sale. A higher GDP is generally a reflection of comparatively higher economic health for a given country compared with others.

According to the United Nations, the top 10 countries measured on GDP per capita are:

  1. Luxemburg
  2. Ireland
  3. Norway
  4. Switzerland
  5. United States
  6. Demark
  7. Netherlands
  8. Sweden
  9. San Marino
  10. Belgium

What do all of these countries have in common?

They are not generally associated with wide-spread labor actions (a.k.a., massive strikes).

The U.S. Bureau of Labor Statistics has released information about union membership rage in the U.S.: 10%, or 14.4 million workers. That 10% is flat compared with 2022.

The BLS started tracking these numbers in 1983. Back then there were 17.7 million union workers. That represented 20.1% of the workforce.

And while many people (likely you, as you are reading something about the auto industry) might think that the auto industry is where there is the greatest number of represented workers, turns out that in the private sector the number-one industry for union workers is utilities, at 19.9%. Then the BLS buckets transportation and warehousing at 15.9%, followed by educational services (12.9%) and motion picture and sound recording (12.9%).

If people are interested in money first and foremost, then union membership is certainly a positive, as the median weekly earnings for a union worker in 2023 was $1,263 compared with $1,090 for a non-union worker.

Which brings us back to the list.

On Monday, speaking at the UAW national political conference in Washington, DC, UAW president Sean Fain said that he wants an organized strike, a general strike, a mass strike across the board, to occur on May 1, 2028.

“We want everybody walking out just like they do in other countries.”

If GDP is important, then one wonders about the wisdom of emulating the labor practices or activities of other countries where it isn’t particularly high.

People deserve good pay, benefits and working conditions. But somehow a scheduled across-the-board strike doesn’t seem to articulate the needs of a utility worker, which are probably different than those of a barista, which are coincidental at most with a university teaching assistant, which are undoubtedly not the same as someone working the line in a Chevy plant.

Buick: Wouldn’t You Rather Have One?

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By Gary S. Vasilash

If there is someone who is quintessentially American, that person has to be Dale Earnhart, Jr. It is hard to imagine how difficult it would be to live up to the legend that his father was, but Dale Jr. was able to make his own way into the annals that is NASCAR.

Like many former drivers, Earnhart owns car dealerships. One of them is Dale Earnhardt Jr. Buick GMC in Tallahassee, Florida.

Like many dealer websites, there is an array of vehicles for sale presented and an immediate pop-up that shows they are willing to engage pronto with prospective customers.

But there is something that is different than is the case on many dealer websites, which is a Q&A section.

And one of the questions that is presented and answered is:

“Is Buick American?”

And the answer begins:

“If you’re considering a new Buick vehicle as your next Thomasville, GA car or SUV, you may be wondering, is Buick American? The answer is yes.”

And it laudably goes on to acknowledge that the brand builds vehicles in places that aren’t within the U.S., like Bupyeong, South Korea (Encore GX), and Shanghai, China (Envision).

Yes, you read that right: the Buick Envision is built in China. Which is something to think about when the rhetorical question is raised: “Will Americans buy Chinese vehicles?,” as though this is some sort of question about the future. It isn’t. And the answer is yes.

The Buick Envista is also made in South Korea.

This leaves the Buick Enclave, which is made in the U.S., at the Lansing Delta Township plant in Michigan.

GM has been building vehicles in Lansing for a long time. Ransom E. Olds built a plant there in 1901. (Olds, unfortunately, ceased to exist in 2004.)

While some people wondered about the viability of Buick, here’s Duncan Aldred, vice president, Buick and GMC:

“As the fastest growing mainstream brand in the industry in the U.S.last year, 2024 promises more big things for Buick, spearheaded by the launch of the next-generation Enclave.”

Sketch of the 2025 Buick Enclave. No, it won’t have square wheels. (Image: Buick)

Last year Enclave sales, 39,411 units, were up 29.1% compared to 2022.

But Envision sales, 44,281 units, were up 71.2% and Encore GX, 64,149 units, were up 92.4%.

Which seems to indicate that at least so far as 2023 goes, they were busier in Bupyeong and Shanghai than they were in Lansing.

Perhaps the forthcoming version of the stylish Enclave will help boost things in Lansing.

And probably at Dale Jr.’s dealership in Florida, too.

Pininfarina’s Digital Approach to Documentation

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By Gary S. Vasilash

OEMs today are hoping like they’ve never hoped before that with all of the money that they’re not making on electric vehicles (yes, yes, there are the exceptions like Tesla and BYD) that they’ll be able to more than make up it for by selling services, digital services, not mechanical ones.

The plan is that people will forego Google Pay or Apple Pay and use the interface in the vehicle.

While this may not be as great a leap as thinking that people will forego Waze or iTunes, it is still a bit of a stretch.

Legendary design consultancy Pininfarina has decided to increase its potential revenues through the creation of “Pininfarina Classiche.”

This is something for those who have a classic car and are interested in obtaining as much provenance as they can.

The Pininfarina archive has been digitized and the company has been working with the Historical Studies department at the University of Turin.

The archive includes production and serial numbers for >700,000 cars that is supplemented by >20,000 related documents, sketches, photos, and related items.

Most of the information is related to vehicles produced between the 1950s and 1990s.

For now, those who own a:

  • Alfa Romeo Spider (Duetto) from 1966 to 1993
  • Fiat 124 Spider from 1966 to 1982
  • Pininfarina Spider Europa and Volumex from 1982 to 1985

can get in touch with Pininfarina Classiche about their specific vehicle.

As for what Pininfarina will get, the fees are:

  • €400.00 VAT included for cars produced before 1980
  • €300.00 VAT included for those from 1980 onwards

Although this will not be a continuing stream of revenue as the OEMs with the digital dreams expect, odds are that collectors are going to be far more willing and interesting to get the documentation from the company.

Ocean Issue

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By Gary S. Vasilash

Although there aren’t a heck of a lot of them out there (globally 4,700), so it is not something with big numbers. . .but if you happen to own one of them, that’s a big number in and of itself, the National Highway Traffic Safety Administration Office of Defects Investigation is looking into the braking performance of the Fisker Ocean electric crossover.

(Image: Fisker)

Reportedly there is a problem as described by NHTSA as a “partial loss of braking over low traction surfaces without alerting the driver”—and it would seem that the partial loss is more problematic than an alert—but this “result in a sudden increase in stopping distance”—which probably goes to the point of the partial loss.

According to Fisker, it issued and over-the-air update in December to help resolve the issue.

Apparently the complaints preceded this probable fix.

But it needs to be checked.

This should be particularly concerning to Ocean owners in places where there is snow and/or ice on the pavement (a.k.a., “low traction surfaces”).

Fisker’s official statement:

“Fisker is fully cooperating with NHTSA on this matter.”

Which goes without saying, except that companies are expected to say something.

GMC Going More Global

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By Gary S. Vasilash

GMC sells its vehicles in three non-U.S. markets at present:

  • Canada, where its sales were up 10% in 2023 and where it has a market share of 5.5%
  • The Middle East, where its sales were up 15% compared with 2022
  • Mexico, where its sales were up 14.4%
  • South Korea, where it launched the Sierra LD pickup in 2023

How, you might be wondering, did it do in the U.S. in 2023?

Its retail sales were up 6.5% compared with 2022 and its total sales were up 8.9%, for a total 563,677 units.

GMC Yukon AT4. Presumably a nice vehicle on a snowy day. (Image: GMC)

(Which vehicle in its lineup were up 279.9% in ’23 compared with ’22? The HUMMER EV. It delivered 3,244. That vehicle has the distinction of being—with the exceptions of the Chevy Blazer EV and Chevy Silverado EV, both of which launched near the end of ’23, so these exceptions are not really comparative, especially as the HUMMER went into production in November 2021—the lowest-selling vehicle of all GM products.)

Feeling bullish about the global demand for vehicles of a large dimension, GMC announced that it will be rolling out the Yukon full-size SUV in Australia, New Zealand and China, with the last-named getting the vehicles in 2024 and the first two in 2025.

GMC sold 82,271 Yukons in the U.S. last year, essentially flat in the context of the 82,304 sold in 2022. While flat isn’t as good as the 279.9% of the HUMMER EV, it is better than the -19.3% of the Canyon, -14.8% of the Savana, or 17% of the Terrain.

Hybridized CUVs Matter

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By Gary S. Vasilash

Here’s a fun fact: the Honda CR-V hybrid was the best-selling hybrid vehicle, bar none, in the U.S. market in 2023.

197,317 were delivered.

Honda CR-V Hybrid under its skin. (Image: Honda)

Meanwhile, over at Toyota, 161,125 RAV4 Hybrids were sold and an additional 26,073 RAV4 Primes, the plug-in hybrid, for a total of 187,198 hybrids.

GM has zero hybrids.

Ford has hybrid versions of the Escape, Maverick, Explorer, and F-150.

Combined, it delivered 133,743 hybrids.*

Ford sold 140,986 Escapes in 2023. That’s with all powertrain options.

Fewer than the Honda and Toyota hybrids.

Chevy sold 212,701 Equinoxes—none of which are electrified, and not all that many more than the CR-V hybrid (15,384, non-trivial, but when you take into account that Honda sold 361,457 CR-Vs in 2023, well. . . ).

Clearly, compact CUV hybrids are appealing.

Surprising GM is ignoring the market and Ford probably needs to ramp up its output.

Dodge has a hybrid version of the Hornet available, a crossover that launched last Spring, so its efforts are still nacent in this space. It sold a total 9,314 Hornets in 2023, of which 3,591 were the hybrid version, so there’s evidently some traction.

(Jeep has the Wrangler 4xe plug-in and the Grand Cherokee 4xe plug-in, of which it sold 67,429 and 45,684, respectively. Neither, of course, is likely cross-shopped with a CR-V or RAV4, but still nice numbers.)

*Here’s a big number–the electrified Toyotas sold in 2023: 565,800. With the exceptions of 2,737 Mirai fuel cell electric vehicles and 9,329 bZ4X BEVs, all hybrids.

Cheap EVs & The Steak Mentality

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By Gary S. Vasilash

Admittedly the BYD Seagull (a.k.a., “Dolphin Mini” in Brazil and Latin America) is a small car—98.4-inch wheelbase, 148.8-inch length, 67.5-inch width, 60.6-inch height—there are two other characteristics worth knowing: (1) it is an electric vehicle with a range ranging from about 190 miles to 250 miles, depending on the battery used; (2) it has a starting price that’s approximately $11,000.

The BYD Seagull. Small. Cheap. Electric. Competitive? (Image: BYD)

Which leads to two other considerations:

  • Good thing Americans don’t like small cars
  • Good thing it isn’t available in the U.S. because while Americans may not like small cars, they do like low prices

And Kristin Dziczek, policy advisor, Federal Reserve Bank of Chicago, speaking at the 30th annual Automotive Insights Symposium, speaking on her own behalf, not the Fed’s, said that a car like the Seagull is something that worries her.

Dziczek said that BYD could conceivably sell the Seagull in the U.S. market for ~$15K, including the 27.5% tariff that the U.S. imposes on vehicles built in China, and still make money.

Given that the average transaction price for an EV in the U.S. in December was $50,786 according to Kelley Blue Book, given that $48,759 was the average transaction price for vehicles of all types last month, doesn’t well under $20,000 look appealing—even for a small EV?

Let’s say that a Chinese company builds a factory in Mexico. Isn’t it possible that, increased costs compared with China, it could take advantage of the USMCA and avoid the big tariff?

While there are some who argue that people want the amenities that are characteristic of vehicles with higher price points, some people prefer porterhouses over McDonald’s.

Seems as though the traditional domestic OEMs are interested in those who want steak.

Chevy, once the GM brand that was more economical, has a starting price for the Blazer EV at $56,715. . .just $1,875 less than the starting price for the Cadillac Lyriq EV.

Remember when the Chevy Silverado EV was announced and it was said that the starting price would be around $40,000? The actual MSRP is $74,800.

Affordability is a key concern for most people. Sure, there are those who buy far beyond their means for purposes of fashion.

But fashion is fickle.

And in the short and long run for many people, it is about what will get the job done at a price that meets their means.

While politics may impede the entry of Chinese vehicles in high numbers in the American market (the Buick Envision and the Polestar 2 are built in China and you can buy one at a dealer near you right now, but the sales for both are still somewhat small: for 2023 there were 44,281 Envisions sold and 10,350 Polestar 2s) it is going to likely happen at some point.

The question is how competitive the U.S. builders are going to be when that happens. Given that they’ve pretty much abandoned midsize and small cars (Toyota sold 290,649 Camrys last year and 232,370 Corollas, so it is not like there isn’t a market for those types of vehicles), there should be some serious concern.

Electric Big Rigs?

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By Gary S. Vasilash

Although it seems as though the only electric truck that is garnering outsized attention is the Tesla Cybertruck, big trucks-as in medium- and heavy-duty cargo haulers—have considerable upside.* (Of course anything starting from a low base can have a big upside.)

As is the case with light-duty vehicles (trucks and otherwise) research firm IDTechEx finds that innovations in battery tech and a build-out of more charging are essential for the growth of battery-electric trucks. (Its new report “Electric and Fuel Cell Trucks 2024-2044: Markets, Technologies, and Forecasts” also looks at fuel cells, but we’ll let that go.)

No surprise that a lot of electric heavy-duty trucks were sold in China between January and June 2023: 11,500 of them.

By comparison, between Q1 and Q3 ’23 there were just over 6,000 electric trucks sold in the European Union, European Free Trade Association and United Kingdom, combined.

And in the EU, Germany and the Netherlands accounted for 65% of the 3,918 electric trucks sold during the first three quarters of ’23.

However, it is worth knowing that electric trucks represent a mere 1.5% of the EU market.

As for the U.S., IDTechEx forecasts that zero-emissions trucks could represent 13% of the medium- and heavy-duty truck sales by 2030.

Generally, estimates have light-duty EV sales being on the order of ~30% by 2030, so that 13% may say something about the durability, capability, usability, and economy of diesel engines.

However, zero-emissions they aren’t.

==

*Yes, there is the Tesla Semi. But it is, comparatively speaking, somewhat stealthy at this point.

Gas Effects

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By Gary S. Vasilash

During his “Forecast: 2024” webcast presentation, Jonathan Smoke, Cox Automotive chief economist, made a number of observations and predictions that ought to make potential vehicle purchasers happy.

Like the likelihood that the unemployment rate will stay at 4.0-4.1% throughout the year; that inflation will slowly decline; that interest rates will go in the right direction for those who need a loan.

Charlie Chesbrough, Cox senior economist, pointed out that new vehicle inventory in 2023 was up 51% compared with 2022, and one consequence is that incentives are rising, so it appears that there is going to be a shift from a seller’s market to a buyer’s market.

And speaking of buyer’s market and inventories: Stephanie Valdez Streaty, Cox director of Industry Insights, noted that at the end of 2023 the day’s supply of ICE vehicles on dealer lots was 69 days—but it was 113 days for electric vehicles. There is likely to be some dealing.

But there was one point that Smoke made that shows just how important vehicles and costs associated with them are to people.

As the graph below shows, as the price of gasoline goes down, the state of consumer sentiment rises.

Simply stated: Cheap gas makes people happy.

(Image: Cox Automotive)

EVs and Pricing Parity

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By Gary S. Vasilash

In December 2023 18 of the 35 brands that Kelley Blue Book analyzed had year-over-year price declines.

This is understandable, given that it was the end of the year, and there is a tendency for product manufacturers of all types, not just vehicles, to want to move out as much inventory at the end of a period as possible (e.g., the classic recommendation about buying a car at the end of the month when the dealer wants to move just one more to make a quota and consequently provides a better deal).

So there was Volvo, which reduced its price by 6.7% and Land Rover, with a 10.2% reduction.

It should be noted, however, that both of those brands have a very minimal (<1%) share of the U.S. market, so it is not like their combined numbers have much of a consequence on the overall average retail price for vehicles in 2023.

KBB calculated that in December the average transaction price (ATP) for vehicles was $48,759.

Notably, the ATP was $50,798 for electric vehicles.

Said Stephanie Valdez Streaty, director of Industry Insights at Cox Automotive, “2023 was a milestone year with 1,189,051 pure battery electric vehicles sold, accounting for 7.6% of all new-vehicle sales.”

So that is good for the EV producers.

What’s more, the point at which price parity between vehicles with combustion engines and those with electric motors is reached is something considered by industry to be the point at which there will be a huge rise in the number of EVs purchased.*

An ATP difference of $2,039 for an EV is almost that, and certainly just a few bucks per month on a lengthy load.

But going back to the companies that had price cuts in December, there’s the company that accounts for 55.1% of the EV market, Telsa. (Tesla has, per Cox Automotive, 4.2% of the entire vehicle market, which is more than Mercedes, Volvo, Jaguar-Land Rover, Rivian, and Lucid combined.)

According to KBB it cut its prices an average 25.1%.

Let’s see: a price reduction of that magnitude, the possibility of getting as much as a $7,500 tax credit for a Model X or Y—well, were Chevy capable of providing those kinds of benefits to customers Malibus would be flying off lots.

People read books about negotiation strategies in order to get a few percent taken off the price of the vehicle they want to buy, coming in ready to take on the dealer by being wise to its tactics, and there was Tesla, slashing prices, presto-change-o. And the Feds offering serious money, too.

Amazing!

No other OEM can afford to make—or take—the kind of cut that Tesla made.

At some point (let’s not forget about the presidential election in a few months) those tax cuts are going to go away. And Tesla may simply being to ratchet its prices back up.

What then?

Perhaps that parity may be fleeting.

==

*Of course, given the continued issue regarding infrastructure, which an increased number of EVs would only exacerbate. . . well, people who have to drive around looking for available, working chargers are not likely to want to repeat that experience when they look for a new vehicle.