The First Edition

Car market relatively unchanged while EVs struggle

Quinn Osha & David Goldberg
March 10, 2022

Good Morning,

Welcome to our new weekly newsletter bringing together automotive industry pricing trends, news, and advice. From retail pricing shifts to inventory squeezes to major OEM headlines, we keep you updated with the good stuff and then let you get on with your day. Is there a topic you’d like us to cover or have feedback on? Contact us with your input.

Before diving into the details, last week can be summed up as unremarkable on the pricing side of things. Car buyers were mainly satisfied with their dealer experiences, despite marketplace turmoil. At the same time, Russia’s invasion of Ukraine may add further stress to the global supply chain matters. On a less serious but still important note, EV makers Lucid Motors and Rivian stumbled with production issues and pricing (respectively).

Cheers!

Market at a Glance

According to CarGurus, February 2022 saw retail used car pricing stabilize. The average transaction of $30,551 was a 0.54% drop from January but a 1.13% increase over the previous 90 days.

However, one trend to keep an eye on is the uptick in the selling prices of second-hand vans (commercial and shuttle vehicles). With a $32,925 average transaction, these deals are 3.32% more expensive than January and 9.15% higher since November. Year-over-year, these vehicles are selling for an average price that’s almost 55% higher. In fact, work vans have had the highest YoY increase among all the vehicle types tracked by CarGurus.

What remains to be seen is if record-setting gas prices will influence the car market. Will SUV/large vehicle pricing drop as is it did during the last gas spike (in 2008)? Are car-shopping commuters more likely to now look for fuel-sippers?

Coming Soon...

In an edition coming soon we will begin integrating pricing data directly from our quoting backend. We're excited to be able to start showcasing the ever-illusive private party selling prices and trends to make sure your dealership is getting up-to-date trade in data. Stay Tuned.

Car Buyer Satisfaction: Survey Says…

Cox Automotive recently released its 12th annual Car Buyer Journey Study. Results reveal that consumers are adjusting to what’s going on in showrooms these days. “Dealers have done a great job adapting to what consumers wanted during the pandemic and have permanently evolved the car buying journey in a personalized way that results in very high satisfaction even when consumers are contending with historically low inventory and record-high prices,” comments Cox’s Vanessa Ton.

A Never-Ending Wild Ride For The Global Supply Chain

Russia’s invasion of Ukraine is roiling more than the petroleum markets. Neon gas is an essential element used in the manufacturing of semiconductors. And take a wild guess where a lot of it comes from? Of course, Russia. And, much of it gets processed in…Ukraine. But, wait, there’s more. Russia is also a key source of palladium, integral to catalytic converters. Take an antacid and read more details here.

A Bad Week For EV Makers

Tesla challenger Lucid Motors announced significant production cutbacks due to supply chain issues. But, it's not for what you think: the automaker is having a hard time sourcing glass and carpeting for its six-figure EVs. New production estimates will cap 2022 manufacturing at 14,000 units, far short of the 25,000 reservations it's sitting on.

Start-up darling Rivian, partially owned by Amazon and Ford, had its own mishap when the EV maker announced price increases up to 20%. Unlike most automakers (including Tesla) that traditionally apply price changes to new orders, Rivian decided to upcharge its 70,000 reservation holders. Faced with window stickers increased by $15,000 or more or a drop in equipment, hundreds (if not thousands) of Rivan buyers canceled their orders. Rivian quickly reversed course as CEO RJ Scaringe issued a mea culpa.