Over-the-air software updates mean that car companies can send updates to your car's software from the internet, just like your phone gets updates. This helps improve the car without needing to go to a repair shop.
Autonomous driving means cars can drive themselves without needing a person to control them. This technology is getting better and is being added to more cars to help with safety and convenience.
The regulatory standpoint is about the rules and laws that the government makes for how cars should work, especially when it comes to new technologies that could affect safety.
The average used car price is how much people usually pay for a second-hand car. This price can go up or down depending on how many people want to buy used cars and what condition the cars are in.
Late model used cars are cars that are not brand new but are still fairly new, usually just a few years old. They often have better features and are in better condition than older cars.
This means that a lot of people who buy cars are choosing ones that are at least 9 years old. This shows that many people are looking for cheaper options.
Off-lease vehicles are cars that people rented for a few years and are now being sold. They can be a good deal because they are usually in good shape and not very old.
Used vehicle prices are how much you pay for a car that someone else has owned before. These prices can change based on how many cars are available and how many people want to buy them.
Dealer markup is when a car dealership charges more than the price suggested by the manufacturer. This often happens when there are fewer cars available and many people want to buy them.
The Honda Stream is a type of car that can carry a lot of people and stuff, making it great for families or trips. It’s known for being reliable and not using too much gas, which is why people like it. It’s a good option if you need a practical vehicle.
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To show the next-period chip crisis spreads to Japan. GM unveils a bold plan to bring eyes off driving to market in 2028, and Tesla's profit slip in the third quarter. Plus, experts talk over the vehicle affordability crisis and what's driving higher prices in the new and used markets.
Prices go up, they just they won't come down.
Let's run through all the news you need to know to keep up in the auto industry.
The ripple effects from the next-period dispute keep spreading, this time to Japan. The Japan Automobile Manufactures Association says the country's automakers are bracing for possible serious semiconductor shortages.
Jamis Chairman says a Dutch chipmaker has warned part suppliers it can't guarantee future deliveries, a move that could disrupt global production.
Next-period, based in the Netherlands, has been caught in a standoff between Dutch and Chinese authorities over trade restrictions. Toyota, Nissan, and Mitsubishi say they're monitoring the situation and working with suppliers.
Subaru says its plans are running normally. Honda says it hasn't suspended any factories so far, but it's watching closely for any ripple effects.
Tesla's profit dropped sharply in the third quarter, even as sales surged. Net income fell 37% to about $1.4 billion, while revenue jumped 12% to more than $28 billion.
That boost came as US buyers rushed to claim an expiring federal EV tax credit. Tesla delivered a record 497,000 vehicles in the period, still margin slipped to 18%, from nearly 20% a year ago.
The company blamed shifting trade, tariff, and fiscal policies for near-term uncertainty, but said it's focused on long-term growth.
And Ford is recalling more than 1.4 million vehicles in the US over a problem with rear-view cameras.
Nitsa says the defect can cause the camera image to appear distorted or disappear entirely.
It affects a wide range of models, they include certain c-max, escape, explorer, fusion, Mustang, and several Lincoln vehicles built between 2015 and 2020.
Ford says only about 1% of the recalled vehicles are expected to have the issue. As of October 1st, the automaker has linked the defect to five accidents but no injuries.
And those are today's headlines, you can find more details on all those stories at autonews.com. General Motors says its cars are about to get a lot smarter.
By 2028, it says drivers will be able to safely take their eyes off the road and even chat with a built-in AI for restaurant tips or maintenance help.
Lindsey Van Hully was at the announcement on Wednesday in New York. She spoke with her own Jake near about it from her home office near Lansing, Michigan.
Lindsey Van Hully, welcome back to Daily Drive.
Hi Jake, thanks for having me.
Alright, so walk us through what GM unveiled yesterday, what are the sort of the basics of this announcement?
Yeah, they had a lot of announcements yesterday. I was in New York for a technology strategy media day. They had reporters there to hear from executives and also see demonstrations of some of the technology that they're launching.
They are planning to have conversational AI using a Google Assistant as soon as next year inside vehicles before they actually work on their own custom AI assistant.
They are planning to bring eyes off actually driver assistance technology in 2028, starting with the Cadillac Escalade IQ, that's the electric version of the Escalade SUV.
Right now, their super cruise system is hands off. You can take your hands off the wheel, but it still requires you to keep your eyes on the road.
So this would be a pretty big step up in what that technology can do.
They have a combination of LiDAR sensors, radar cameras, you know, trains on data from real world driving also runs simulations to be able to test those sorts of rare situations that don't happen on a regular basis.
And that's a part of the effort when they talked last year about ending the robot taxi business that crews had operated.
They had said instead they really wanted to focus on prioritizing advanced driver assistance technology really toward developing a personally autonomous vehicle because they've talked about that's their core business, running a robot taxi fleet is not really their core operation.
So they've brought in cruises team and the technology and paired it with the team that had been working on super cruise and really trying to kind of pair those two efforts to really enhance and improve what the the eyes off technology will do.
And really powering all of that they said is going to be a new electrical architecture and central computing platform also expected to arrive in 2028.
That's going to be significantly more powerful will allow for faster operating greater ability for over the year software updates very much a simpler platform than than what's in the vehicles today that's going to make that really easier for connectivity for entertainment and also just to be able to handle all of the additional AI workload that's expected to be coming with some of these new updates.
Certainly feels like a shot across the bow here from GM I'm curious what you see as their goals with something like this in terms of where places them in the market and also what are the risks involved here.
Yeah I mean I think how they see it is sort of a there's an opportunity to differentiate you know there are not automakers in the US that have technology currently you know available that really allows drivers to take their eyes off the wheel at highway speeds kind of the way that they're envisioning here.
And so you know to be able to do that you know GM has talked about really seen significant value in a system like that especially you know just how you value time you know they've talked about how you know if they can safely allow consumers to take their hands off the wheel.
Their eyes off the road do other things work you know whatever else that they might want to do there's convenience there and there's a lot of value they say in really giving consumers that time back.
There's still a lot of risks you know this is an untested system there are a lot of questions I think still about liability you know what happens if there's an incident when the system is engaged and how does that get handled lots of questions from a regulatory standpoint and you know just that overall question of trust you know will consumers trust it.
And in GM has said you know they're going to be very deliberate and incremental with how they scale this you know it's going to be on one vehicle at first you know highways before they would expand into like urban driving for instance.
And I think with how they've described it is you know we're going to do this safely and incrementally because if the trust isn't there then this just doesn't work that's really how they've described it.
So it will be interesting to learn more about it and kind of see how that's actually going to work and what that deployment ultimately turns out to be.
General Motors is keeping our own Lizzie Van Holy very busy this week Lindsay thank you for joining us again on daily drive.
Thanks Jake coming up experts weigh in on the vehicle affordability crisis and where it's likely headed in the coming years that's next on daily drive.
Automotive news shift podcast brings you the latest on automotive technology trends and transformation I'm Hannah Litz.
And I'm Molly Boygon we're the new co-host of shift and we're excited to bring you new conversations with experts and industry insiders like this one with Larry Dominique president of LD management consultant.
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Welcome back to daily drive, I'm Kellan Walker.
As tear of policies have started taking effect, auto prices have been rising.
Since bottoming out at $48,500 in February average new car prices have marched steadily upward surpassing $50,000 for the first time in April.
That's according to cloud theories average marketed price metric on Wednesday, our own Hannah Lutz and page hotter hosted an automotive news congress conversations live stream digging into what's driving those price hikes and where they're headed next.
The panel included Jennifer Newman, editor in chief at cars commerce.
Laura Parada, president of the New Jersey coalition of automotive retailers, Melinda Zebritsky, experience head of automotive financial insights and Shirley Jones, CFO of car pros automotive group.
Here's a piece of their conversation.
Are we nearing an affordability crash and what early warning signals should dealers watch out for before affordability crashes in their local markets.
Melinda, let's start with you.
Well, I think it's interesting when we talk about works like crash because you can go back, you know, handful of years ago and everyone asked me is $500 the limit on a new car monthly payment and we sword right through that.
Certainly, you know, the affordability issue continues to be out there and we continue to see consumers respond by moving into older and older vehicles, you know, trying to keep things that keep things more affordable, but I don't think we're in them.
I don't think we're really looking at a crash, but I think we're looking at consumers who previously might have been new car buyers who are now going to be moving into the used car market just simply because they can't afford to buy a new car.
And what does that mean for the traditional use car buyers, Jenny just told us how high the average use car price is.
Where do they go?
Well, that's where we're seeing them shipped into older and older vehicles, you know, there's really high demand for late model used cars right now because of the lack of leasing a handful of years ago.
You know, that feeds late model used availability and we increasingly see consumers shipped into older and older cars, you know, just so far this year, over 40% of consumers who bought cars were 9 plus model years old.
So I think it's just that evolution of consumers moving from new to late model used those consumers shifting into a mid year model and then he began to older.
Surely bringing you in from the dealership perspective, what are those customers looking for? Are you able do you have inventory that you're able to offer them to get to that low payment? How are you navigating those conversations?
You know, from the dealership perspective, we are navigating this new world that we're in with affordability vehicles.
We're listening to our customers, we're making sure that we give them transparency with pricing and yes, sometimes the the consumers are leaning back towards those vehicles that are older models, but we're putting them on a pathway of this is the vehicle you might be purchasing today.
Bring them back in a couple of years later, we're going to transition you from this vehicle to a newer model.
So we're giving them a platform to move from one year from older model to a more current year vehicles.
And Laura, I know that you work with lots of dealers in your state of New Jersey. What is their experience with this, you know, these affordability challenges across the board, across the used new EVs you're just speaking about before the call.
Thank you, Hannah. You know, it's it is challenging, absolutely. And you know, when there are incentives from the state that is helpful and you know, it was a challenge as well with the federal ED incentive just going away as $7,500 at the point of sale there.
I'm from the federal government that's challenging. And on top of that in New Jersey, we have a situation where we have an affordability crisis in the state, not just in the auto space, but our energy prices are skyrocketing.
Housing's completely unaffordable. There's article after article where consumers are trying to decide whether to pay for the groceries or pay their electricity bill.
And then you're like, and now we want to buy a new car for our family as well. So it's the ripple effect of challenges right now.
Are there certain price segments that are most at risk right now, especially as terrorists take effect is like the middle of the market, for example, most at risk or you see more risk in the upper or lower end, who wants to start on that one.
So yeah, I think I think absolutely the most at risk is the 30 K and under car, which is, which is kind of ironic as we're sitting here talking about affordability.
We're seeing that 30 K cars and under the market share is just 13% and that is down, especially if you look at 2019 before the pandemic, that market share was 38%.
So those vehicles that, you know, we're in a sweet spot for people looking for a budget vehicle who might be thinking about use, but perhaps want the extra warranties and the reassurance that comes with buying new.
They're really stuck because there's less to buy there, and of course part of the reason why is because of the tariffs that were seen with the current administration.
That is impacting the way that automakers are thinking about the mix that they're bringing to dealerships and a lot of these vehicles are made outside of the US and that is impacting what's actually being sold here.
You know what Hannah, can I interject there, what the dealerships are really looking for is for least returns and that's how we are able to feel that segment of vehicle inventory here at car pros.
Through retaining customers repeat customers that are coming back back into the dealerships, so we're able to take a least return that's in that segment of 35 to 40,000 dollars.
And then have that vehicle available for sale, we have our BMW stores, well in that segment, we have not seen a decline for those vehicles consumers who like to purchase luxury vehicles, but going back to the segment of that 35 to 40 dollar market value.
We're really relying on our retention of our customers coming back in, repeat customers trading in those vehicles for us to have vehicles front line and ready for our customers to purchase.
Yeah, and I can add on to that because it's when I look at what the most common least vehicles out there, you know it's it's some of those mid size smaller CUV SUVs it's it's rough for it's you know you still always have the camera in there, but it's also a lot of big trucks and lately it's a lot of EVs.
I mean, this year was kind of the trough of off lease, you know off lease vehicles because we're coming in off of 2022 next year we're going to pick up some additional but another million.
But also increasingly more of those vehicles coming off lease are going to be V's you know they're 20% of what's least so yeah, we're going to start having some more late model used vehicles next year, but the mix is going to be different.
Right and along with the new EV incentive the used federal incentive also went away so that doesn't help the used EV prices either following up with Melinda besides tariffs what other factors are increasing monthly payments.
Well, certainly the rate increases didn't help so rates coming down are certainly going to going to benefit.
But it's it's also again it's just purely the prices going up, you know every every new year comes out the new models are going to be priced a little bit above the previous year models.
Again on the used vehicle side it's still very tight inventory so used values continue to be high.
And when I tend to notice in the data is once prices go up whether it's demand or whether it's tariffs they don't come down even if tariffs go away we're not going to see those prices come down.
You know on the new side when we had the dealer markups the very very high increases a handful of years ago inventory recovered prices didn't come down so that certainly doesn't help.
I think the one thing that does help though is on the lender side we have lenders who are increasingly looking at moving into longer term loans some lenders that wouldn't go beyond a 72 are starting to look at 84.
We do have some specialty lenders out there who specialize in 95 96 100 month loans, which is kind of unfathomable to think of but you know term certainly helps but like I said prices go up they just they won't come down.
We have a good question from the audience this is from Matthew it's directed to Jenny to start.
Is there any data on which generation of buyers is driving higher purchase prices or are higher prices happening really across the board no matter the age of the buyer.
That's a great question I you know I think we're seeing higher purchase prices across the board as Melinda was mentioning the tightness and the use car market is impacting it's it's it's all connected new and user connected so as new goes up use goes up right we're seeing.
Less a little bit less inventory and some of these segments I think what one area that's interesting and we were talking about the 30 K price bucket one area that we are seeing a little bit of growth is 30 K to under 50 K we're seeing automakers be really thoughtful about the way that they're approaching some of their trims and the pricing there.
And so for shoppers who are have a little bit of flexibility with their budget they may be able to find some relief by looking at lower trim levels in that bracket so that that could be an area for shoppers of all ages to to spend a little more time doing some research.
I was just looking at purchases by generation and I think the answer really is not necessarily generations driving the prices I think it's what's out there drives what the generations do.
As far as whether they buy new whether they buy used and looking at new cars we still have you know gen X is still the largest buying population but the growth is in millennials and what I tend to see is you know there is that correlation between age and credit.
You know that you're more entry level consumers your you know your gen X rather you know it's new to market they're growing they start off you know lower credit less availability to be able to go move into a new car they tend to start with used.
And then as they age they're able to move into more of the new market and then of those younger generations I'm increasingly seeing them shipped into leasing and that's what drives those lower price points and those lower payments.
So I think it's more of what is out there in the marketplace drives what the different generations do.
Can I add to that?
I'm the leasing friend when you think about Gen Z and even millennials and the ways that they have developed a shoppers and consumers you know what we've noticed at cars.com is that they view vehicles they start to view vehicles more as a technology.
So they are they are these are generations that have been raised sort of with the iPhone or their cell phones and they are used to this technology being updated frequently.
And so it's not a surprise to hear Melinda say that they're leaning into leasing because they are sort of precondition to think about needing their technology to be up to date and newer so you know it's there's a trend there's a correlation there as well.
Melinda Zebritsky is head of automotive financial insights at Experian Jennifer Newman is editor in chief at cars commerce Shirley Jones is CFO of car pros automotive group and Laura Parata is president of the New Jersey coalition of automotive retailers.
They spoke with our own Hannah Lutz and page hotter on our Congress conversations live stream on Wednesday.
You can find their full conversation on our LinkedIn Facebook and YouTube pages.
That's daily drive for today. I'm Kellan Walker. Thanks to automotive news executive producer Jake near as well as on Ron Lindsey van Hully, Hans Grimel, Lawrence Siliff, Riley Hodder and David Phillips for their reporting for today's podcast.
You can get the latest news on vehicle prices supply chain disruptions and everything happening in the auto industry at auto news.com.
Come back tomorrow for a conversation with Alex Snyder and Tom Harsha of vehicle life about how dealership service departments can create loyalty with customers.
These customers with over a hundred thousand miles on their car they might be seeing six and seven hundred dollar bills every time they come in.
So that is having an effect on loyalty. It is driving people to go to their independence.
We'd love to hear from you. Let us know what you think of the show on the topics we covered today.
Send us an email at dailydriveatautonews.com or leave us a voice mail at 313-444-2774.
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Thank you.
About this episode
Japan's automakers are preparing for a semiconductor shortage as the next-period chip crisis unfolds, impacting global production. GM reveals plans for advanced driver assistance technology that allows drivers to take their eyes off the road by 2028, while Tesla faces a profit decline despite record vehicle deliveries. The episode also delves into the escalating vehicle affordability crisis, with experts discussing rising prices in both new and used markets and the shift of consumers towards older vehicles due to financial constraints.
