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Saturday, January 22, 2022
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Out of the frying pan, and into the electric truck race

Ford F-150 Lightning

The years of "employee pricing for everyone" seem approximately three lifetimes ago at this point.

The discounts were extremely popular, but they also furthered the perception that the Detroit 3 only built cars and trucks people bought because they were cheap. Over and over, executives promised to introduce models that didn't need huge incentives, only to slap huge incentives on those same vehicles a few months later because they were piling up on dealership lots. It was a damaging, predictable cycle that decimated the companies' profits and contributed to the bankruptcies of General Motors and Chrysler once the economy crumbled.

That's all changed. The microchip shortage that starved many dealers of new-vehicle inventory is a big reason, but all three companies already had overhauled their product lineups and greatly reduced their reliance on discounting since being humbled during the Great Recession.

Ford Motor Co. has been rolling out one hot seller after another lately, and it has a crucial launch just around the corner: the F-150 Lightning. The electric pickup is in enormous demand — Ford has amassed nearly 200,000 reservations — and with retail trims ranging from about $55,000 to more than $90,000, the clamor is certainly not because it's a screaming deal.

Some dealerships, knowing they have another hit on their hands and limited allocation coming, are marking up the truck's sticker price by as much as $30,000, according to owner forums. That hasn't gone over well with Ford, which is warning of potential consequences for profiteering, as explained in a Page 1 story in this week's issue.

The Lightning isn't just going up against Chevrolet and Ram, which have electric pickups of their own due out in the next two years. Ford worries that negative experiences with its dealerships could push customers to the likes of Tesla and Rivian, which don't have franchised dealer networks. One dealer told reporter Michael Martinez that markups are "brand-destroying," while another laid out the carefully considered reasons he's asking customers to pay extra.

Having too much demand is undoubtedly a better problem to have than scrambling to unload piles of inventory at fire-sale prices, and it shows how far Ford has come since the early 2000s. But it's a problem nonetheless.

At least this isn't the kind of problem they'll have to mortgage the company to solve.

Nick Bunkley

Carlos Tavares

“What is clear is that electrification is a technology chosen by politicians, not by industry.”

- STELLANTIS CEO CARLOS TAVARES, WHO SAID EUROPE’S ELECTRIC VEHICLE PUSH COMES WITH ENVIRONMENTAL AND SOCIAL RISKS

From “Stellantis CEO says Europe's EV drive comes with environmental, social risks”

In Monday's Automotive News:

Chip shortage

Whither the chip shortage? We’re not out of the woods yet on chip shortage hassles, and any hope that early 2022 might bring relief could well be misplaced. We’re seeing new production cuts at Ford and Toyota, and the latest estimates have the problem lingering through the first half of the year. We explore it all and provide the outlook for 2022.

Honda autonomous vehicle

AV surprise: When you think of autonomous vehicles, what companies come to mind? Waymo and Cruise? Perhaps Ford’s and Volkswagen’s Argo AI? It turns out Honda stole an early lead in autonomous driving by offering the world’s first Level 3 system on public roads, even if it is available for customers in Japan only. We look at the system’s limitations and potential, the good, bad and ugly, based on a test drive in Tokyo.

Ford windfall

Ford’s Rivian gain: The automaker expects to book an $8.2 billion gain in the fourth quarter from its investment in startup Rivian. Ford carried a roughly 12 percent stake in Rivian when the electric vehicle maker went public in November after investing more than $800 million in the company. Ford reports earnings Feb. 3.

Toyota production

Toyota to miss annual output target: After holding strong for months, Toyota now expects to miss its global production target as the automaker capitulates to the double whammy of parts shortages and the pandemic. The automaker said it expects global output to come in under the 9 million vehicle target for its fiscal year ending March 31.

Top Five U.S. Lease Deals
MarketScan
What are the best deals nationally this week across the U.S.? Market Scan's Payment Value Index (PVI) analyzes the relationship between MSRP* and the monthly payment to determine which lease deal delivers the best "bang for the buck.” For more information, visit www.marketscan.com.
Pickup Truck
PVI Year Make Model Average MSRP* Average Best Payment
91.22 2022 TOYOTA TACOMA $36,323.33 $358.57
90.90 2022 TOYOTA TUNDRA 4WD $51,455.00 $531.27
90.48 2021 TOYOTA TACOMA $35,835.61 $375.03
90.06 2022 CHEVROLET SILVERADO 3500HD $48,349.55 $519.78
89.94 2022 TOYOTA TUNDRA 2WD $48,478.57 $535.80
Coupe
PVI Year Make Model Average MSRP* Average Best Payment
87.99 2021 DODGE CHALLENGER $52,552.24 $670.40
87.99 2021 ACURA NSX $159,495.00 $2,011.31
87.73 2021 INFINITI Q60 $52,058.33 $666.28
87.20 2022 INFINITI Q60 $52,108.33 $692.45
86.54 2022 BMW M4 $78,895.00 $1,096.20
Sedan
PVI Year Make Model Average MSRP* Average Best Payment
90.15 2021 INFINITI Q50 $47,975.00 $514.84
90.09 2022 HYUNDAI SONATA HYBRID $31,725.00 $343.49
89.89 2022 ACURA TLX $46,533.89 $518.51
89.72 2021 ACURA TLX $46,295.00 $522.50
89.32 2022 HYUNDAI SONATA $30,675.00 $352.88
* Average MSRP is the average of the MSRP of all the individual trim levels for each model, and includes all taxes, registration and average dealership fees. Based on 36-month lease, 12,000 miles per year, 720 credit score, customer cash = 5% of MSRP, Selling Price = MSRP

Source: Payment Value Index (PVI) ™, a trademark of Market Scan Information Systems, Inc.
Available through captive lender
Available through non-captive lender
Events:
Feb. 1: January U.S. light-vehicle sales reported
Feb. 10-11: Chicago Auto Show press days
March 10-13: NADA Show

Earnings:
Feb. 1: GM
Feb. 3: Ford
Feb. 11: Magna International
Feb. 16: Sonic Automotive

Jan. 23: SHIFT: Regina Clewlow on micromobility’s role in reshaping cities (Episode 132)

The CEO and co-founder of mobility data platform startup Populus discusses how city transportation departments manage mobility, the underappreciated value of curb space and the future of shared transportation.

Listen to the Podcast >

Jan. 20: DAILY DRIVE podcast: How did customer satisfaction in the car-buying process improve over pre-pandemic levels?

Automotive News Retail Reporter Lindsay VanHulle discusses a Cox survey that found better customer satisfaction in the overall car-buying process over pre-pandemic levels.

Listen to the Podcast >

Jan. 18: DAILY DRIVE podcast: A look at the U.S. economic outlook with GM Chief Economist Elaine Buckberg

Executive Editor Jamie Butters talks with Buckberg about the U.S. economic outlook in the first of a two-part interview.

Listen to the Podcast >

Jan. 26, 2010: Niche Dutch sports car maker Spyker buys Saab from General Motors for $400 million, with $74 million in cash, the rest in deferred shares.

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