News

For more than two years, the U.S. auto industry has been an extraordinary case study in Economics 101: The balance between supply and demand.

January illustrated what happens when the market shifts: Supply got better, but the demand that's driven prices and profits since the microchip shortage began is beginning to soften under economic pressure.

U.S. light-vehicle sales totaled 1.04 million last month, an increase of about 4.5 percent over the severely supply-constrained market of a year earlier, according to LMC Automotive, which said that the showing was still the second-weakest January since 2014.

The reasons: High prices, rising interest rates and low incentives are impacting consumers' ability to find a vehicle they can afford. Just last week, the Federal Reserve raised the federal funds rate another quarter point in its ongoing battle to combat high inflation — the eighth time it has hiked the rate since March — which is another factor hurting co…

A day after a "frustrating" earnings report, Ford Motor Co. CEO Jim Farley told employees in a letter that he is cutting the percentage used to calculate bonuses for senior leaders including himself.

The letter, co-signed by CFO John Lawler and obtained by Automotive News, explained that for 2022, the company's salaried work force is scheduled to earn 148 percent of their bonus targets, largely due to strong operating cash flow and improvements related to service warranties. Top executives' bonuses are being cut to 90 percent, he said.

"This decision was not made lightly, but accountability starts at the top," Farley said in the note. "Our senior leaders have a significant impact on driving the business results and must live up to the high standards we need to create a vibrant, profitably growing Ford."

He said he would provide additional details about the annual incentive compensation plan for 2023 later this month.

Ford said Thursday that it l…

Here's how three Honda retailers reacted to news of Sony Honda Mobility's strategy to offer its vehicle service plans to competing brands:

"Honda is taking a risk in alienating its dealer body, which sold about 1.2 million vehicles a year pre-COVID, for a poorly thought-out plan to sell somewhere around 100,000 vehicles annually. The Sony-Honda JV's attempt to maintain the fiction that they are 'independent' from Honda is disingenuous. [The] products are being designed and produced using Honda resources and they should solely be sold by Honda dealers. Honda should not be competing with the same dealers who have invested billions of dollars in their Honda franchises and helped make Honda a legendary brand." — Bill Feinstein, chairman of the Honda National Dealer Advisory Board and president of Planet Honda in Tilton, N.H., and general manager of Planet Honda in Union, N.J.

"Honda said the Sony JV is operating separate from Honda Motor and their decisions with …

Legislation in Virginia aims to keep automakers from negotiating directly with consumers or going so far as to declare franchised dealers delivery agents.

A pair of identical bills passed unanimously in both Virginia's House and Senate late last month, and one of them may be headed for final passage as soon as next week, said Don Hall, CEO of the Virginia Automobile Dealers Association, which is backing the legislation.

The bill language may be some of the first in the country to reference growing concerns among franchised dealers that legacy automakers may try to take steps toward an agency model or sell directly to consumers.

Among its provisions, it prohibits automakers from negotiating binding sale or lease terms with customers, including online; retaining ownership of new vehicles until they're sold rather than selling them to dealers to hold in inventory; and declaring that dealers are delivery agents.

Virginia'…

TOKYO -- Japan's Denso Corp., a key supplier and affiliate of Toyota Motor Corp., on Friday slashed its annual operating profit forecast by 12.5 percent as it warned a chip shortage could cause auto production cuts.

The diversifed auto components and technology supplier lowered its full-year operating profit forecast to 420 billion yen ($3.26 billion) for the year to end-March, from 480 billion yen expected previously.

Denso said the new forecast took into account the pandemic's impact in China and the risk of vehicle production cuts due to the ongoing global semiconductor shortage, despite efforts being taken to reduce costs.

The downward revision comes after the world's top-selling automaker Toyota in November lowered its vehicle production forecast for the current financial year through March to 9.2 million vehicles from 9.7 million amid the chip shortage.

Denso, which specializes in thermal, powertrain management and electronics systems, gets …

HANOI -- Vietnam's electric automaker VinFast said on Friday it will delay deliveries to its first U.S. customers to the second half of February after it finishes updating the vehicles with the latest software.

The Vietnamese company, a unit of conglomerate Vingroup, is gearing up to expand in the U.S., where it hopes to compete with existing automakers.

It started to ship its first 999 EVs in November, but has not delivered them to customers yet after the company initially targeted December deliveries.

"The cars have been updated with the latest software. We are planning to hand over the first VF8 vehicle models to customers in the second half of February," VinFast said in a statement.

"The second batch will be shipped to the U.S. in the second quarter of 2023," the statement said, without specifying the size of the lot.

VinFast said it secured 55,000 orders globally as of December last year, of which 12,000 are from the U.S. market. It …

Online used-vehicle retailer Shift Technologies Inc. said Thursday it was shedding its physical stores on the East Coast, which it obtained through its December merger with used-vehicle consignment company CarLotz Inc.

Shift Technologies, headquartered in San Francisco, previously cited CarLotz's established presence on the East Coast as a key reason for undertaking the deal, which was announced in August and closed Dec. 9.

The retailer said its store leases, inventory and related assets in Richmond, Va.; Charlottesville, Va.; and Tampa, Fla., will "be assumed by a local dealership group." It did not disclose the name of the group in a news release announcing the exit from the region. Stores in Midlothian, Va.; Charlotte, N.C.; and Greensboro, N.C., were closed Thursday.

"After thoughtful consideration, we determined it was in the best interest of the company to exit the East Coast CarLotz presence," Shift Technologies CEO Jeff Clementz said in the …

Renault Group and Nissan Motor Co. will formally unveil the agreement to reshape their alliance on Feb. 6 in London, the companies.

The deal will reshape the two-decade-old alliance to put the two carmakers on an equal footing.

Renault will reduce its controlling stake in Nissan to 15 percent from 43 percent, while Nissan will take a share in Renault's carved-out electric-vehicle business Ampere.

Both sides will be able to exercise voting rights up to 15 percent. Currently Nissan has no voting rights attached to its stake -- a longtime source of contention.

"At this conference, the members of the alliance will present the agreements that will define the new bases for their partnership - presuming prior approval of their respective boards," the companies said on Thursday.

The reshuffling would be the first major overhaul since Renault saved Nissan from near bankruptcy in 1999 by taking controlling stake in the then-flailing Japanese blue chi…

<!--*/ */ /*-->*/ The charging conundrum faced by commercial electric trucks

LAS VEGAS — Electric truck builders are sounding the alarm on the lack of charging infrastructure and the time it takes to build as the freight and logistics industry transitions to zero-emission transport.

Daimler Truck North America CEO John O'Leary told Automotive News his company has both the manufacturing capacity and customer interest to sell 2,000 Freightliner eCascadia electric trucks this year, but there is a lack of chargers to support them.

"Our customers need to be able to charge any of their trucks anywhere they are," O'Leary said as Daimler prepared to unveil the SuperTruck II, an extra-efficient concept model of its diesel Freightliner, on Wednesday at the Manifest freight and logistics conference here.

There is almost no public infrastructure to power large electric trucks. The charging systems going into distribution centers and other facilities …

Asbury Automotive Group Inc. spent $2.7 million during the fourth quarter on "a significant acquisition that did not materialize," the company said Thursday.

Asbury's sale of nine North Carolina stores in the fourth quarter was also partly agreed to in anticipation of the unconsummated purchase, CEO David Hult told analysts and investors on a call.

Asbury did not specify a reason for the "significant" deal's lack of completion, and it was unclear from Hult and Asbury's comments if the auto retailer had abandoned that transaction entirely. Asbury also did not specify what expenses consumed the $2.7 million other than for "deal diligence."

On the call, Morningstar Inc. analyst David Whiston asked for clarification on what Asbury considered a "large" or "significant" acquisition in light of the group's purchase of Larry H. Miller Dealerships in December 2021. That $3.2 billion transaction included Asbury purchasing 61 franchised an…

DETROIT — Ford Motor Co.'s fourth-quarter net income fell to $1.3 billion because of continued supply chain struggles, and CEO Jim Farley blamed the automaker's annual loss on poor execution.

For all of 2022, Ford lost $2 billion, and the company's adjusted earnings before interest and taxes of $10.4 billion was more than a billion lower than what it forecast. Farley promised better results in 2023, which he described as a "pivotal year” for the automaker.

"To say I'm frustrated is an understatement because the year could have been so much more for us at Ford," Farley said on an earnings call with analysts late Thursday. "We have deeply entrenched issues in our industrial system that have proven tough to root out. Candidly, the strength of our products and revenue has masked this dysfunctionality for a long time."

In a statement, Farley said Ford left about $2 billion of profits on the table last year. 

Ford CFO John Lawler said roughly half…

TOKYO — When Afeela, the new electric vehicle brand created by Honda Motor Co. and Sony Corp., starts delivering cars in 2026, it won't just consider Honda and Acura dealers to service them.

In the U.S., the new EV venture may also look to brands outside the Honda and Acura dealer networks — including retailers from rival automakers.

"Not only Honda dealers. There may be several opportunities," Yasuhide Mizuno, CEO of Sony Honda Mobility Inc., said about plans for Afeela's critical after-sales network.

"It might be that is the best way for the customer," he said.

Rethinking retail, even if it means disrupting relations with franchised dealers, exemplifies the nothing-is-sacred mindset of Sony Honda Mobility in its quest to reinvent the auto business.

Super-powerful computer chips, extra-long leases, exporting from the U.S. to Japan, video game tie-ups — not to mention, the temerity to team two of Japan's most iconic brands from vastly diff…