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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…

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…

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…

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…

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

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…

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…

The design of BMW’s first Neue Klasse all-electric vehicle is futuristic enough to “look like we skipped a model generation,” the automaker’s design chief, Adrian van Hooydonk, says.

BMW is previewing the EV with the Vision Neue Klasse concept at the IAA Mobility auto show in Munich.

The concept features styling that has been “pared down to the essentials,” BMW said in a statement on Saturday when it released images of the Vision Neue Klasse.

Classic BMW features such as the Hofmeister kink on the rear pillar, the kidney grille and the so-called shark nose reverse-angled front end are retained but updated to give a more progressive look.

The large windows, blocky body shape and swollen wheel arches help “create a new aesthetic,” BMW said.

The concept is “close to standard production” of the 3 Series-sized sedan due in 2025, BMW CEO Oliver Zipse told analysts on the company’s earnings call in July.

BMW will initially produce a midsi…

There was a surge in EV leasing this summer, accounting for 26 percent of all EV transactions in July — up dramatically from 7 percent in December, J.D. Power data shows.

But counterintuitively, the brands experiencing an explosion in leasing are the ones ineligible for the U.S. government's Clean Vehicle Credit incentive.

EV lease rates in June for Volvo, Mercedes-Benz, Audi and Kia, which don't qualify for the purchase credit, ranged from 60 to 82 percent, J.D. Power data shows. However, Tesla, with its Model 3 and Model Y qualifying for the purchase credit, has an overall lease rate of about 8 percent.

The federal Clean Vehicle Credit, most recently modified in April, offers EV, plug-in hybrid and fuel cell EV buyers a maximum tax credit of $7,500 for vehicles that meet qualifying standards based on final assembly location, battery component and critical minerals sourcing, and consumers' modified adjusted gross income. Automakers already producing a…

WASHINGTON — Automakers and a segment of independent repairers say a new pact signed in July reaffirms their commitment to right to repair, potentially shelving the need for federal legislation. But some right-to-repair advocates and aftermarket industry groups aren't convinced.

The agreement — backed by the Alliance for Automotive Innovation, the Automotive Service Association and the Society of Collision Repair Specialists — largely reiterates the commitments made in a 2014 national memorandum of understanding between automakers and independent repair shops and parts retailers. It is opposed by MEMA Aftermarket Suppliers and the CAR Coalition, a group whose members include AutoZone and Allstate. It also lacks support from the Auto Care Association, a major trade group that represents companies throughout the aftermarket supply chain and one of the original signatories of the 2014 deal.

Critics of the agreement — released a week before a cong…

Cadillac’s V-Series performance subbrand is about to turn 20, and Cadillac is celebrating with a special 20th Anniversary package on its 2024 models.

The V-Series made its racing entrance in March 2004 and later entered production with the 2004 CTS-V sedan.

Today, the V-Series is available for the CT4 and CT5 sedans, including Blackwing variants, along with the Escalade large SUV. To commemorate two decades, Cadillac’s anniversary package will feature a custom grille header, wake-up animation screen and puddle lamp projector, along with a Black Diamond Tricoat heritage color.

Electric vehicle shoppers who receive lower monthly payments for agreeing to send the lender a delayed down payment — such as money received from an EV tax credit — are making good on that promise, two companies facilitating that financing model say.

Startups Tenet and EV Life offer customers a deferred payment structure, with EV Life incorporating it into loans it writes itself and Tenet serving as the matchmaker between customers and financial institutions supportive of the concept.

Tenet also participates in indirect loans involving dealerships, and EV Life is interested in that space.

Both companies have other EV financing businesses as well. EV Life has created tax credit and rebate calculation software and licensed it to Nissan and Toyota; Tenet pairs customers with climate-mindful lenders willing to offer cheaper loans and provides lenders EV depreciation models and automated loan application decisions.

Tenet allows consumers to def…