Trade News

MUNICH — While Mercedes-Benz has focused on electrifying its flagship cars and SUVs, the German luxury marque is now turning its gunsights on the other end of the product portfolio.

On Sunday at the Munich auto show, Mercedes revealed the Concept CLA Class, a four-door coupe that previews a new "electric-first" platform, underpinning future compact and midsize electric vehicles.

The concept features a drivetrain derived from the Vision EQXX concept, which Mercedes said can drive from New York to Cincinnati on a single charge and is as aerodynamic as a football.

Mercedes and German rival BMW are preparing software-driven vehicle architectures for a new next-generation of EVs to claw back market share from a surging Tesla.

The Austin, Texas, EV juggernaut has negatively impacted Mercedes sales, with the German brand's lower-priced models taking the brunt of those losses.

"With Tesla dominating the electric vehicle market and the Model 3 tak…

While Volvo, Volkswagen and Buick trim or eliminate wagons from their U.S. lineups, Mercedes-Benz is sticking with a different direction — off-road — with the next-generation E-Class wagon coming next summer.

The 2024 E-Class All-Terrain, introduced Sunday at the Munich auto show, grows taller, wider and longer than the outgoing model, and undergoes a host of upgrades designed to appeal to customers who like the look of a beefy wagon that can traverse dirt and gravel country roads.

The All-Terrain's Airmatic suspension system places air suspension bellows at each wheel to maintain ground clearance regardless of the load.

The interior has electrically folding rear seats and a total cargo capacity of more than 64 cubic feet. The tailgate opens and closes electronically via the key fob. The All-Terrain's exterior has wheel arch cladding, a twin louver grille and an under-vehicle guard panel.

No word yet on prices.

The All-Terrain is expected…

EV auto finance subject of new F&I special section

Electric vehicles made up 7.2 percent of second-quarter U.S. registrations, ahead of the 5 percent "inflection point" Chase Auto CEO Peter Muriungi said could signal EVs reaching 25 percent of the market within just two or three years.

For auto lenders and dealership finance offices, the question is: How are people currently paying for their EVs, and how will the potential impending flood of adopters pay for them in the future?

In this quarter's Finance and Insurance special section, we look at trends dealership sales and F&I departments might see today or leverage in years to come.

Our lead story demonstrates automakers whose vehicles do not qualify for the 2022 Inflation Reduction Act's new-EV tax credit are indeed capitalizing on the commercial vehicle tax credit by incentivizing leasing. Lease deals boomed from 7 percent of the EV market to 26 percent of new EV transactions between D…

Electric vehicles made up 7.2 percent of second-quarter U.S. registrations, ahead of the 5 percent "inflection point" Chase Auto CEO Peter Muriungi said could signal EVs reaching 25 percent of the market within just two or three years.

For auto lenders and dealership finance offices, the question is: How are people currently paying for their EVs, and how will the potential impending flood of adopters pay for them in the future?

In this quarter's Finance and Insurance special section, we look at trends dealership sales and F&I departments might see today or leverage in years to come.

Our lead story demonstrates automakers whose vehicles do not qualify for the 2022 Inflation Reduction Act's new-EV tax credit are indeed capitalizing on the commercial vehicle tax credit by incentivizing leasing. Lease deals boomed from 7 percent of the EV market to 26 percent of new EV transactions between December 2022 and July 2023. Kia, for example, which passed all $…

The president and co-founder of BlueSpace.ai offers an alternate path to developing self-driving software, shares lessons learned from her first startup experience and details the state of driverless deployments in San Francisco.

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The pandemic slammed the brakes on the luxury segment's profit engine — leasing.

At the end of 2022, lease penetration at BMW was down dramatically — 30-plus points vs. pre-pandemic levels, BMW National Dealer Forum Chairman David Sloane told Automotive News at the time.

"The No. 1 goal should be to retain our lease customers," Sloane said.

BMW and its captive finance arm listened, then responded with programs to make leasing more compelling.

Birgit Boehm, 55, CEO of BMW Group Financial Services for the U.S. and Americas, spoke with Staff Reporter Urvaksh Karkaria about the resurgence in leasing and what's driving it. Here are edited excerpts.

Q: How is leasing activity shaping up for BMW this year?

A: In the first half of the year, leasing penetration increased nearly 30 percent [from year-end 2022]. We expect that trend to continue.

Leasing is an effective sales tool for dealers to…

Microchip shortages continued to trip up automakers in China and Asian markets outside of China. Assembly plants there made the lion’s share of production cuts to production schedules last week, according to the latest estimate from AutoForecast Solutions.

Asian factories outside of China eliminated 43,157 vehicles from their production plans due to shortages, while factories in China cut 19,669.

Globally, carmakers lost 67,541 vehicles because of inadequate supplies of chips, even as the semiconductor and automotive industries work to fix the problem.

North American assembly plants cut just over 4,700 vehicles out of their schedules last week — a modest number compared with the scope of the problem automakers were dealing with earlier this year.

Source: AutoForecast Solutions Inc. autoforecastsolutions.com

There's a moment of UAW legend, when Joe Hinrichs — now the CEO of rail giant CSX — was at Ford Motor Co., and he called CEO Alan Mulally late at night to tell him that they could get needed concessions from the union ... if Mulally was willing to cut his pay.

And the boss said yes.

Ultimately, Mulally and Executive Chair Bill Ford both cut their salaries by 30 percent. Though as we see now even more starkly, such as our listing of CEO pay packages: For people at the top, salary is a relatively modest slice of the compensation pie.

Still, it's interesting to me that the UAW today hasn't requested pay cuts for CEOs and other executives. Of course, their pay is decided by the board of directors and is not a matter of union negotiations. But does that really have to stop the union from demanding it?

UAW President Shawn Fain has highlighted CEO compensation in his ample communication with UAW members.

He has n…

Dennis & Co. Auto Group completed two dealership sale-leasebacks with Legacy Automotive Capital this year to quickly free up millions of dollars in funding for the growing group to use to aid future acquisitions.

By not sitting on the stores' real estate, "we're able to focus on our primary business: car dealerships and selling cars," CEO Brian Dennis told Automotive News. "The ability to sell these properties and become a tenant rather than a landholder has freed up capital to continue our growth."

A typical sale-leaseback involves a dealer selling the dealership real estate and the buyer immediately leasing the property back to the dealer.

And it's at the heart of Legacy Automotive of Exton, Pa., which said in 2022 that it planned to spend $500 million over three years by providing capital for dealership sale-leasebacks or assisting dealers in acquiring property in buy-sell transactions.

"We've been pretty aggre…

Subaru's future product plan will require it to rebalance its North American production capacity and rely on corporate partner Toyota as it begins to widen its U.S. product offerings to include more battery-electric vehicles — while still continuing to invest in its combustion-powered models.

To meet its growing demand, Subaru is expected to move production of the slow-selling Legacy sedan from its sole U.S. plant, in Lafayette, Ind., back to Japan, as it did earlier with the Impreza. But it might also discontinue the model.

AutoForecast Solutions, which tracks automaker production plans, projects that Subaru will also consolidate production of its Outback midsize crossover in Japan in 2025, despite that model's popularity in the United States. Doing so would free up capacity in the Indiana plant to expand production of the Forester and Crosstrek crossovers, while perhaps providing capacity for future EV production. That measure would help those electric vehic…

Nimble and engineering-minded Mazda is gaining traction as an upscale brand after years of aspiring to attract a more affluent customer.

The new three-row CX-90, which rides on Mazda's rear-drive large crossover platform and offers flexible seating options in a spacious package, is resonating with buyers. Dealers report they have seen an influx of Mercedes-Benz, BMW and Acura owners cross-shopping the CX-90.

Mazda also has seen an uptick in market share this year. Through July, the small brand accounted for 2.4 percent of the market, compared with 2.1 percent the same time last year.

The availability of Mazda Financial Services also is yielding positive results. Backed by Toyota Financial Services and put into place in April 2020 during the first wave of the COVID-19 pandemic, it has provided Mazda with a dedicated finance arm, which has proved to be an especially powerful tool during the past year as economic volatility spilled over into the auto indus…

Multiple banks view their auto lending behavior for both prime and subprime customers today as on the tougher end of their historic spectrum, according to the Federal Reserve's senior loan officer survey released in July.

More than one-fifth of lenders polled in June said they were showing prime auto borrowers strictness beyond the "midpoint" of the range of underwriting rigor they had from 2005 to 2023; one-tenth called themselves looser. When it came to subprime lenders, more than half of the bank executives surveyed considered their companies tighter than that historical middle ground. None said they were looser.

"We're experiencing a tightening or contracting of the subprime market in general," Matthew Phillips, CEO of Car Pros Automotive Group, told Automotive News. He said it had been harder to find financing for Car Pros' subprime borrowers.

The Fed said the survey found consumer loan standards "on the tighter ends of their hi…