High car prices will stay high in 2022

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Looking for a new car? Have you thought about waiting until 2023? All this and more in The morning shift for April 18, 2022.

1st gear: car manufacturers can get away with it

Automakers spend years — decades – desperately trying to keep prices low to stay competitive in the market. But if…every car manufacturer raised their prices at the same time? What if they all started producing only their most expensive models with the highest profit margins? What would induce them to lower prices?

Anyway, here’s a Wall Street Journal report from auto industry pundits and insiders who say they just can’t find a way to bring prices down anytime soon:

“It could take years” before dealer inventories recover, said Steve Center, chief operating officer for KIAis an American company. “You won’t see any incentives, because we’re always going to sell whatever we can make.”

Automakers entered the year with optimism that the chip shortage would gradually ease. But it continues sporadically limit vehicle production around the world, as well as other disruptions, from the war in Ukraine to the Covid-19 restrictions in China.


Even with automakers trying to generate buzz about new showroom deals, an extended period of low inventory continues to leave car buyers with few good alternatives and keep prices high.

After hitting record highs, the amount Americans paid for new vehicles has shown signs of stabilizing in recent months. In March, the average transaction price – or the price paid at the door – fell slightly for the third month in a row, to around $43,700, according to JD Power.

Still, it’s about 26% higher than before the pandemic, when the average trade price hit $34,600 in late 2019, the research firm reported.

As long as automakers can continue to get away with high prices, I don’t see this ending.

2nd Gear: BMW says it won’t cut jobs in EV transition

A reminder that companies blaming things for job cuts are usually bullshit – they can prioritize keeping jobs if they want to. Here’s BMW saying it won’t blame any job cuts on its transition to battery-powered cars, like the FinancialTimes reports:

BMW will not cut a single employee as it transitions from combustion engines to electric models, its chief executive has promised, even as economists predict tens of thousands of job losses across the industry.

“We won’t have any job losses due to transformation,” said Oliver Zipse. “At the end of the day, perhaps already in this decade in our factory in Munich, there will be fully electric production without anyone losing their job.”

His comments come as Europe’s car sector, along with leading economists, warn that plans to ban petrol and diesel cars will lead to mass unemployment.

Generally, electric cars have fewer parts than ICE vehicles. Theoretically, electric vehicles also require less maintenance. Parts suppliers have claimed job cuts are coming, and I don’t see why we can’t have job promises during the transition.

3rd Gear: 2023 Kia Niro EV in 50 States

I drove the current Kia Niro EV the other week and really enjoyed it in Southern California, with warm weather and plenty of chargers. Am I wondering what the car would look like in Topeka, Kansas? Or Lincoln, Nebraska? Or Minot, North Dakota? Sure! Now, the Niro EV will go on sale in all 50 states, as Automotive News reports:

The second-generation 2023 Kia Niro electric crossover, one of three electrified variants available, will go on sale in the United States this summer in all 50 states, the automaker announced last week. The current-generation electric vehicle is only sold in select states.

“Part of our electrification strategy is to sell electric cars everywhere, not just to comply with regulations and exempt states, or standard California states,” said Steve Center, COO of Kia America. “People want electric cars all over the country.”

4th gear: Ford down 19% In China Q1

We reported that GM was down about 20% in the first quarter in China, so it’s perhaps unsurprising that Ford was down the same amount. Since Automotive News China:

Ford Motor Co.. and its joint ventures sold about 125,000 vehicles in China in the first quarter, down 19% from the same period last year.

Ford’s China unit blamed the decline on persistence semiconductor shortage of chips and the negative impact of the resurgence of coronavirus outbreaks in the country.

Lincoln deliveries edged up 0.8% to 19,471 during the period and Ford-branded passenger vehicles fell 17% to 46,719.

5th gear: Chinese Hongqi Super Luxe SUV goes on sale in Israel

I’m thrilled that China’s glitziest car brand managed to build a Cadillac Lyriq before Cadillac. You can see the thing on Automotive News Chinareporting on the Israeli launch of the model:

Israel is not the first country to which Hongqi exports. In September 2021, Hongqi held a ceremony for the launch of the E-HS9 in the Norwegian market and announced its entry into the European market. Hongqi also exports to other countries such as Russia, Kuwait and the United Arab Emirates.

In Hongqi’s overall strategy, European users will gradually familiarize themselves with the Hongqi brand through the E-HS9 model, starting with Northwestern Europe. In the future, Hongqi plans to launch small and medium-sized SUVs and sedans to enrich its product line in the European market and customer demands.

Reverse: I always stick to a plan that is right…

Let’s see what happens if we detonate a really big bomb?

Neutral: How are you?

I planted my tomatoes, eggplants and some herbs for this spring. Buds burst on the trees outside my window.