Q1 Sales Surprises

Yes, customers are back. But some of what they’re buying is surprising.

By Gary S. Vasilash

Although it was April Fool’s Day when the first quarter 2021 numbers for U.S. sales were announced by OEMs, the smiles were real in offices across the land as the SAAR (seasonally adjusted annual rate) rose to approximately 16.5-million units, or about a 12% sales increase compared to Q1 2020, which, of course, contained the first month of the pandemic in America.

2021 Toyota Prius Prime. There was a 70.6% sales increase for the model in Q1 2021. Who saw that coming? (Image: Toyota)

This wasn’t supposed to happen

Plenty of people who seem to have a particular affection for liking the use of fossil fuel and has therefore been gloating over the fact that Toyota Prius sales have been dropping must have gotten a surprise. Despite that fact gasoline prices have been low for the past several months and still under $3.00 per gallon ($2.85 in the U.S. as of now, according to the Energy Information Agency), Prius sales rose 22.4% in Q1, to 14,050 units. (For a not apples-to-apples comparison: Chevy sold 7,089 Camaros during Q1.)

What is more striking is that all Toyota hybrids had a combined 152% increase, to 125,318 units. (“Thank you, RAV4,” they must be saying down in Plano.)

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The Big Three?

Remember when that was General Motors, Ford and Chrysler?

GM is still big. Overall sales of 642,250 vehicles.

The other Two, however:

Ford, including Lincoln, had sales of 521,334.

FCA, including Chrysler, Jeep, Dodge, Fiat, Alfa Romeo, had sales of 469,651.

Toyota, including Lexus, 603,066. That’s a lot more than either Ford or FCA.

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This wasn’t supposed to happen, 2

Everyone knows that (1) sedans are nearly dead in the market and (2) economical vehicles are so 2010.

Nissan, including Infiniti, had a good first quarter, with overall sales of 285,553 vehicles, which is a 10.8% increase over Q1 2020.

But there are two absolute standout vehicles in the Nissan lineup:

  • Versa: 22,394 vehicles, or an 83.9% increase
  • Sentra: 37,238 vehicles, or a 55.9% increase

Admittedly, crossovers like the Kicks (24,421 units) and the Rogue (86,720) were big contributors, the fact that the Versa and the Sentra did so well ought to make some analysts reconsider that whole “Cars are on life support” position.

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This puts March 21 vs. March 20 in perspective

In March 2020 Hyundai delivered 35,118 vehicles.

In March 2021 Hyundai delivered 75,403 vehicles.

That is a 115% increase.

Still: Wear a mask.

On Peugeot’s New Logo

The first change for the French automaker since 2010

2021 is the year that automakers are changing logos, ostensibly to make them seem more relevant in a world of advancing technologies.

First there was Kia. It had its name spelled out with a font with awkwardly sized letter stems housed in an oval. It truly appeared as though it was something that would be affixed to a product in the Dollar Store rather than on some of the best-designed vehicles on the market. The new one is a digitally driven design with the sort of typographic flow that one would associate with advanced technology.

General Motors was not to be outdone (although arguably it was by Kia’s design), revealing a new badge that went from uppercase letters with a horizontal bar beneath them reversed out of a square blue background to two lowercase letters with the horizontal bar underlining over the “m” in a rounded square box (squircle?). While the previous badge was simply a statement of acryomic identity, the new version is meant to signify the electric future, as the shape of the “m” combined with the bar beneath it resembles an electric plug.

(Image: Peugeot)

Now Peugeot has made a change its logo. It is worth noting that Peugeot, which is 210 years old, first used a lion as part of its logo since 1847, so there is something to be said for consistency. (The original logo was used on steel products the company produced; it didn’t appear on a car until 1948, on a Peugeot 203.)

The new logo, designed by Peugeot Design Lab, a wholly owned operation within what is now part of Stellantis that designs everything from pepper mills to scooters, features a lion’s head within a badge form, with the name “Peugeot” in all caps, slightly curved to echo the curve at the top of the shield.

According to Matthias Hossann, Peugeot Design Director, “With over two centuries of history, Peugeot is a pioneer of mobility and a legendary brand for automobiles and bicycles. This emblem and this new brand identity are a link between our history and our vision for the future. This logo has been conceived, designed and developed in-house with the same stringent requirements that we apply to every detail of our vehicles: the quality of materials, the quality of execution and the quality of the finish.”

Although Peugeot is in the process, like seemingly all automakers, electrifying everything, notably this new logo doesn’t stress that change through some sort of potentially hokey maneuver like making the lion’s mane consist of lightning bolts.

More relevant to the purpose of a logo—to be widely seen and identified with a brand—is that the design team specifically worked on developing the marque such that it is optimized for digital use.

After all, where do you see more logos than in digital spaces nowadays?

For the Want of a Chip

GM announces more downtime at assembly plants

The GM Fairfax Assembly & Stamping plant produces the Chevy Malibu and Cadillac XT4. CAMI produces the Chevy Equinox. At the San Luis Potosi plant it’s the Equinox, Chevy Trax and GMC Terrain.

Today all three of these plants, which have been on downtime shifts, have had their downtime extended.

At San Luis Potosi through the end of March. At the other two assembly plants: “to at least mid-April.”

Why?

The shortage of semiconductors.

GM is using its available chips for its “most popular and in-demand products”—like, not surprisingly, full-size trucks and SUVs.

This is completely understandable. Well, the selection of what to build is, at least.

GM has some of the best people in any industry when it comes to dealing with suppliers. While the pandemic certainly caused a shift in priorities not only when it came to vehicle purchases but also the demand for silicon-based products for those suddenly working and learning from home, it seems as though when it comes to traditional sourced components GM (and other OEMs) are masterful.

But it seems that when it come to silicon and having to compete with consumer electronics manufacturers it is an entirely new challenge.–gsv

Why 2021 May Be the Year EVs Really Started to Matter

No, this is not predicated on some prognostication wrapped in a Tweet by Elon Musk, nor by the potential that Syd Mead fans may actually get their Cybertruck before the end of 2021.

No, this is not predicated on Joe Biden’s plan recommendation to transform the government’ fleet of ~650,000 vehicles from gasoline and diesel to electric as part of the “Buy American” initiative.

Merchants Fleet has ordered 12,600 BrightDrop EV600s, an all-new, electric light commercial vehicle purpose-built for the delivery of goods and services over long ranges. (Image: GM)

No, this is not even predicated on GM CEO Mary Barra’s statement last week that the vehicle manufacturer intends to become completely (i.e., product and process) carbon-neutral by 2040, including an “aspiration” to eliminate tailpipe emissions by 2035.

No, this is because of three other data points that all came out on the same day this week, all of which indicate that electric vehicles are taking on some significant substance.

1

BrightDrop Gets Second Order

BrightDrop, the company that GM recently established for business deliveries that is predicated on EVs and logistics software, has obtained an order for 12,600 BrightDrop EV600s, from Merchants Fleet, a company that describes itself as “the nation’s fastest growing fleet management company.” Deliveries of the EV600, a light commercial vehicle with some 600 cubic feet of cargo capacity and a range of up to 250 miles, are to start in 2023. The first customer for the trucks is FedEx. The importance of cargo vehicles for EVs can’t be overstated. Not only has Amazon invested a few hundred million in Rivian, but it has ordered 100,000 electric trucks, with deliveries starting later this year.

2

Edmunds Declares “Pivotal Year”

“After years of speculation and empty promises, 2021 is actually shaping up to be a pivotal year for growth in the EV sector. We’re not only about to see a massive leap in the number of EVs available in the market; we’re also going to see a more diverse lineup of electric vehicles that better reflect current consumer preferences.” That’s Jessica Caldwell, Edmunds’ executive director of insights. While the projected growth of EV retail sales is still small—according to Edmunds, they were 1.9% in 2020 and are expected to reach just 2.5% of the market in 2021—the firm anticipates that the greater number of available products in 2021, 30 vehicles including 13 SUVs and six trucks, should start making a big difference.

3

EY Sees “Massive Evolution” in Transport

“Electrifying transport is critical for Europe to meet its tough emissions targets and create a decarbonized future. Transitioning fleet first will pave the way and generate new commercial opportunities, including vehicle-to-grid and electric vehicle charging solutions among others. In order to achieve this, a fleet-centric approach is needed across both government and industry, which aims to remove barriers in areas including common standards and investment,” says Serge Colle, EY Global Power & Utilities Leader. While he is specifically talking about Europe, where the CO2 emissions standards are demanding and becoming more so, the focus on fleets (think things like EV600) is key because as EY research indicates: “the lessons learned from accelerating fleet electrification such as the development of sustainable business models that support charging infrastructure investment and integration of smart charging capability, will enable the wider secondary and passenger vehicle market to transition quicker.” First the fleet. Then the driveway.–gsv

Kia and the Meaning of “Motors”

Kia, up until January 15, was officially known as “Kia Motors.” At least the “Motors” part of Kia Corporation was.

Now the company is just “Kia.” Which is pretty much what everyone calls it, anyway.

According to the company, by dropping the “Motors” there is an indication that it is “breaking away from its traditional manufacturing-driven business model.” I would have thought that were the company named “Kia Manufacturing” that could be the case. Somehow I don’t figure how the elimination of “Motors” means that the company “will expand into new and emerging business areas by creating innovative mobility products and services to improve customers’ daily lives.”

For one thing, aren’t the vehicles that Kia manufactures things that “improve customers’ daily lives”? Odds are, when you need to make a Costco run you’re not going to want to call an Uber.

Second, aren’t those “innovative mobility products” things that are going to need to be. . .manufactured?

While announcing the name change Kia execs stressed that the company is “focused on popularizing battery electric vehicles (BEVs)” and that it will introduce seven BEVs by 2027, encompassing various types of configurations.

In addition, it will develop what it calls “Purpose-Built Vehicles” for corporate customers that will be based on “skateboard” platforms. That term has pretty much come to mean BEV.

In one sense, it is perhaps not a good move to remove “Motors” from the name. While a Camry or an F-150 has an “engine” under its hood, a Tesla or a Taycan has a “motor” under its hood.

So a BEV-centric company might want the word “motor” associated with it.

But then there’s the “Lincoln Motor Company,” a name that Ford brought back to its luxury division in 2012 to help bring to mind a classy Lincoln of yore, not electric vehicles as it has none at this point. “Electrified”—a.k.a., hybrids—yes, but purely motor-driven, no.

And while GM has changed its logo, it has hung on to its “Motors.”

General Motors Embraces E-Commerce

The Cadillac LYRIQ, which is to become available in the first half of 2022, certainly looks promising as an electric, luxury SUV, one that may help the brand, which, let’s face it, has been struggling in the market for the past few years—here’s something that is not well known: although Acura is generally considered to be having a tough time of it in the U.S. market, in 2020 it outsold Cadillac, 136,983 vehicles to 129,495 vehicles; Acura also outsold Cadillac in 2019.

The Cadillac CELESTIQ, an electric sedan that takes luxury to levels that Cadillac hasn’t had on offer for, arguably, ever, combining hand-crafted materials with technology, such as a four-quadrant glass roof that allows individual selection of the level of transparency, is another arrow in the quiver of a transforming brand. Although it is still a concept vehicle, it is unlikely that General Motors would draw as much attention to it as it has (it was part of Mary Barra’s CES 2021 keynote) were it—or something damn close to it—not going into production.

That said, even though General Motors is investing $27-billion in vehicle electrification and automation, the most important launch, revealed during Barra’s presentation, is of a vehicle that none of us will individually own:

The EV600, an all-electric, purpose-built light commercial vehicle.

The LYRIQ and the CELESTIQ may be sexy, but logistics is where it is at and will drive the proliferation of electric vehicles in a way that it will take the consumer market a long time to catch up to.

The GM EV600, a purpose-built electric delivery van. The company has even started a logistics support business, BrightDrop. (Image: GM)

The owners of fleets of commercial vehicles—like FedEx, which GM worked with on the development of the EV600 (and the EP1, an electric rectangle on wheels that has a capacity of 200 pounds and a top speed of 3 mph)—do the math when it comes to vehicle acquisition. If it is going to be to their financial advantage to get EVs, then they’re not going to worry about things like available infrastructure, because they’ll build their own. They’re not going to have range anxiety, because they know precisely where their trucks are going and when.

(And it probably doesn’t hurt that it provides a green sheen to their brands by going EV.)

Consider:

–Amazon, which owns a piece of it, is having Rivian build electric delivery vans that are to be on the road next year at a number of about 10,000, perhaps going to 100,000 by 2030.

–Ford has announced the 2022 E-Transit delivery van that is going to be available later this year, and emphasized the benefits of the electric propulsion system vs. its own internal combustion offerings (with the scheduled maintenance of the E-Transit being an estimated 40% less over eight years/100,000 miles).

–And there are start-ups like Arrival, which companies including Hyundai and UPS have invested in.

Sure, we pay attention to LYRIQs and CELESTIQs.

But consider this: in an industry that seems to be shedding operations, General Motors has established a new business, BrightDrop, that is dedicated to delivery, not only vehicles like the EV600 and EP1, but even logistical software services.

This is a non-trivial commitment—and likely to be a prosperous one, as Mary Barra and her colleagues know that commercial companies do the math and need a whole lot less persuading to go electric.–gsv

New Look for GM

This is General Motors’ logo since 2015:

(Images: GM)

This is GM’s logo since today:

While the kerning on the top logo looks a bit off (look at the top left of the “M” in relation to the “G”), it does have an appearance that one could argue is “classic” General Motors: A substantive, staid business that is solid (especially with the horizontal bar, which appears as though it could be made out of ultra-high-strength steel).

It looks as though it is saying: “This is a Fortune 500 company.”

The new logo is different.

It is friendlier. More casual.

Something that could be affixed to a trendy bag or arm patch on a technical jacket.

If the top logo is that of a company on the Dow Jones, the new logo is one that says, “I’m not out of place in the S&P”–the index that includes Apple, Microsoft, Amazon, Facebook. . .and Tesla.

Sharon Gauci, GM executive director of Global Industrial Design, said of the new design was carefully ideated and crafted: “At every step we wanted to be intentional and deliberate because this logo signifies creative and innovative thinking across the global General Motors family.”

One of the objectives of the new logo is to telegraph a message that GM, especially as it undertakes a massive electrification effort–30 electric vehicles globally by the end of 2025–and is a leader in autonomous driving tech, is an of-the-moment relevant company, not a classic, predictable manufacturer of shiny metal objects.

Of course, people buy vehicles, not logos (in 2005 GM started putting postage-stamp size GM logos on all of its vehicles, which is stopped doing in 2009), so the graphic design team has done their bit, now it is up to the rest of the organization to deliver.–gsv

GM Defense Makes Clever Sourcing Decisions

One of the interesting aspects of the Infantry Squad Vehicle (ISV), a nine-soldier all-terrain troop carrier that GM Defense will be providing to the U.S. Army as part of a $214.3-million contract received in June 2020, is that it is based on the 2020 Chevrolet Colorado ZR2.

Rather than engineering something from the ground up, GM decided that it would work to further capacitize the Colorado ZR2—which has outstanding off-road capabilities straight off the showroom floor–for military operations.

GM Defense ISV: based on the 2020 Chevy Colorado, which you can get in your local Chevy dealer. The Colorado ZR2, not the ISV. The U.S. Army is getting that. (Image: GM)

For example, even the most enthusiast off-road driver isn’t likely to have their Colorado sling loaded from a UH-60 Blackhawk helicopter or fitted inside a CH-47 Chinook helicopter.

Similarly, when looking for a place to build the ISV—the initial order calls for 649 trucks—rather than going completely greenfield, GM consulted its real estate holdings and identified a building it has in Concord, North Carolina.

Initially the building was to be a tech center, but then COVID-19 hit and GM put the idea on hold.

It has selected the building to house the 75,000-square-foot manufacturing operation to produce ISVs.

Another advantage of this site is that it is close to Hendrick Motorsports—yes, the one you may associate with NASCAR—which is providing the chrome-moly steel exoskeleton of the vehicle frame.

Again, using an existing supplier—albeit a somewhat non-conventional one when it comes to non-racing applications.

What’s more, the ISV makes use of 90% of commercial off-the-shelf parts, such as a 186-horsepower, 2.8L Duramax turbo-diesel engine, and six-speed automatic transmission.

This overall approach is commendable for its development speed, execution and, let’s face it, undoubted savings to the U.S. taxpayers.