JD Power’s Tyson Jominy: Chasing peak sales is the wrong goal; USMCA preview
About this episode
JD Power’s Tyson Jominy joins the show to discuss why chasing peak sales volume is a costly mistake for automakers. He explains how the industry has found a highly profitable "Goldilocks" zone by maintaining production discipline and selling fewer vehicles than in 2016. Jominy also breaks down how Texas is poised to overtake California as the nation's largest auto market, driven by big-spending pickup truck buyers. Additionally, the show covers the upcoming USMCA trade review, Jeep's Chinese-partnered comeback strategy in Europe, and Volkswagen's massive looming job cuts in Germany.
JD Power’s Tyson Jominy makes the case that the auto industry is more profitable today selling fewer vehicles than it was at its peak and why the biggest threat is the temptation to forget that lesson. USMCA review talks officially get underway Wednesday. Plus, Jeep maps out a China-assisted comeback in Europe.
USMCA
"Today on the show, USMCA review talks are about to get officially underway, we'll talk about what's at stake."
An agreement between the US, Mexico, and Canada that decides how cars and car parts can be shipped across borders without paying extra taxes. It requires car companies to build most of their vehicles in North America if they want to sell them here cheaply.
The United States-Mexico-Canada Agreement is a free trade agreement between the three North American countries that replaced NAFTA. In the automotive sector, it enforces strict rules of origin, requiring a high percentage of a vehicle's components to be manufactured within the region to qualify for tariff-free status.
Jeep
"Jeep is plotting a comeback in Europe, and it's getting some help from China to pull it off."
A famous American car brand known for making tough, boxy SUVs like the Wrangler that are great for driving off-road and in the mud.
An iconic American automobile brand owned by Stellantis, globally famous for its rugged, off-road-focused SUVs and utility vehicles. The brand is currently restructuring its global lineup to balance traditional internal combustion engines with hybrid and electric powertrains.
Volkswagen
"And Volkswagen's Works Council says it was left out of the loop on a plan to cut up to 100,000 jobs in Germany."
One of the biggest car companies in the world, based in Germany, which makes everything from everyday hatchbacks to ultra-luxury sports cars.
A major German multinational automotive manufacturing corporation headquartered in Wolfsburg, Germany. It is one of the world's largest automakers, managing brands like Audi, Porsche, and Bentley alongside its core Volkswagen passenger car division.
Tyson Jominy
"Plus, JD Power's Tyson Jomini says the industry is making more money selling fewer cars, and argues that chasing the old sales peak would be a costly mistake."
An expert who studies car sales data to help the auto industry understand what cars people are buying, how much they are paying, and how many cars dealerships should keep in stock.
The Senior Vice President of Data and Analytics at J.D. Power. He is a prominent automotive industry analyst who regularly provides data-driven insights on vehicle pricing, dealer inventory, and consumer buying trends.
J.D. Power
"Plus, JD Power's Tyson Jomini says the industry is making more money selling fewer cars..."
A famous research company that surveys car owners to find out which vehicles are the most reliable, high-quality, and satisfying to own.
An American consumer research, data analytics, and software services firm. It is highly regarded in the automotive industry for its annual Initial Quality Study (IQS) and automotive performance, execution, and layout (APEAL) studies.
Stellantis
"The Stellantis brand had to gut its European lineup after stricter EU emissions rules made its gas-powered SUVs too expensive to keep selling there."
A giant global company that was formed when the makers of Chrysler/Jeep merged with the makers of Peugeot, bringing many famous car brands under one roof.
A multinational automotive manufacturing corporation formed in 2021 by the 50-50 merger of Italian-American conglomerate Fiat Chrysler Automobiles and the French PSA Group. It controls 14 iconic brands, including Jeep, Ram, Dodge, Peugeot, and Maserati.
Jeep Recon
"First up, the electric recon arrives in 2027, then a plug-in hybrid midsize co-developed with Chinese partner Dongfang."
An upcoming electric SUV from Jeep that looks like a futuristic Wrangler, complete with doors you can take off and a roof that folds back for open-air driving.
An upcoming all-electric midsize SUV from Jeep, heavily inspired by the rugged, open-air design of the Wrangler. It features removable doors and a power-folding roof, aiming to combine EV technology with serious off-road capability.
Dongfeng
"First up, the electric recon arrives in 2027, then a plug-in hybrid midsize co-developed with Chinese partner Dongfang."
A large, state-owned Chinese car company that partners with international brands to help design and build vehicles.
Dongfeng Motor Corporation is a major Chinese state-owned automobile manufacturer. It is one of the 'Big Four' Chinese automakers and frequently partners with Western brands for joint ventures to build and sell cars in global markets.
Works Council
"And Volkswagen's Works Council is pushing back on a plan that could cut up to 100,000 jobs in Germany..."
A group of elected workers in German companies who have a legal right to help make decisions about job cuts, working hours, and how the company is run.
In German labor relations, a Works Council (Betriebsrat) is an elected body representing the workforce at a specific company. Under German law, they have significant co-determination rights, meaning management must consult and negotiate with them on structural changes, layoffs, and working conditions.
Oliver Blume
"That's a problem for CEO Oliver Bloom. Labor holds a supervisory board majority, giving it real power to block deeper cuts."
The top boss of the Volkswagen Group who has the difficult job of leading the company's shift to electric cars while dealing with powerful worker unions.
The CEO of Volkswagen Group and Chairman of the Executive Board of Porsche AG. He is responsible for steering the massive automotive conglomerate through its transition to electrification and managing complex labor relations in Germany.
Texas vs California Auto Market
"Yesterday on the show, we talked about Texas quietly closing in on California as the country's top auto market. Tyson Jomany at JD Power put out a report on the shift."
A comparison of how people buy cars in Texas versus California. Texas is catching up to California in total car sales and actually spends more money overall because Texans buy expensive, high-end pickup trucks.
A discussion analyzing the shifting sales dynamics between the two largest state economies in the US. While California has historically been the epicenter of car culture and EV adoption, Texas is rapidly closing the volume gap and already leads the nation in total consumer dollars spent on vehicles, largely driven by high-end pickup trucks.
hot rod
"Whether it's hot rods and rat rods or hybrids and electric vehicles, California has been leading in that for so long."
An old-school classic car that has been modified with a giant, loud engine to make it go as fast as possible in a straight line.
A classic American car modified with a larger, more powerful engine for linear speed and acceleration. Originating in Southern California in the 1930s, hot rods typically feature stripped-down bodywork and custom paint.
rat rod
"Whether it's hot rods and rat rods or hybrids and electric vehicles, California has been leading in that for so long."
A custom-built old car that is intentionally left looking rusty, unfinished, and pieced together from different parts for a cool, rebellious look.
A style of custom car that deliberately exaggerates an unfinished, rusted, or weathered appearance. Unlike highly polished hot rods, rat rods celebrate a DIY, budget-friendly aesthetic using mismatched vintage parts.
sedan
"So California remains sort of the last bastion of sedan sales in this country."
A standard four-door passenger car with a separate trunk in the back for luggage, as opposed to an SUV or a hatchback.
A traditional passenger car body style featuring a three-box configuration with separate compartments for the engine, passengers, and cargo (trunk). Sedans have four doors and a fixed roof.
Toyota RAV4
"You take Toyota right now, which is still launching the all-new RAV4, and there's very few of those throughout the country."
A very popular compact SUV made by Toyota that is known for being practical, reliable, and fuel-efficient.
A highly popular compact crossover SUV manufactured by Toyota, credited with pioneering the modern crossover segment. It is known for its practical layout, hybrid powertrain options, and strong resale value.
ICE
"because the industry is now switching back to ice, and we don't have that excess capacity on ice today, because we devoted so much of it to EVs."
An acronym for 'Internal Combustion Engine,' which is just a technical way of saying a traditional gas- or diesel-powered engine.
An acronym for Internal Combustion Engine. This refers to traditional vehicles powered by burning fossil fuels (gasoline or diesel) inside cylinders, as opposed to electric vehicles (EVs) powered by batteries.
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