The average cost of a new car has increased by $10,000 in five years

By | December 20, 2023

Photo: Bridget Bennett/Bloomberg (Getty Images)

Happy Wednesday! It’s December 20, 2023 and this is The Morning Shift: your daily digest of the most important car news from around the world, all in one place. Here are the important stories you need to know.

1st gear: The average new car now costs $48,247

It’s the most wonderful time of the year, when automakers and dealers slap thousands of dollars on the hoods of cars just to get them out the door before the ball drops in Times Square. But despite the incentives, the average transaction price for new cars has still increased by more than $10,000 over the past five years. From Reuters:

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“New vehicle sales incentives increased 136% year over year in November, indicating that the new vehicle market is shifting to a buyer’s market, not a seller’s market,” Cox Automotive said in a report. Average incentives currently hover around $2,500.

Maybe those huge inventories have something to do with that ten thousand dollar price increase. I’m no economist, but given that cars generally cost a lot and last a while, I’d wager that new vehicles are a fairly elastic good. If prices get too high, people can always just buy second hand.

2nd gear: Nearly half of Buick dealers are throwing in the towel on electric vehicles

Have you ever been to a dealer who seemed completely uninterested in selling you a car? That’s apparently the sentiment of nearly half of all Buick dealers, who—when given the opportunity to invest in selling new cars to new customers—chose instead to give up the franchise entirely. From Automotive News:

Nearly half of U.S. Buick dealers left the brand this year after it offered buyouts to those unwilling to invest in electric vehicle sales.

The General Motors brand said Tuesday it will end the year with about 1,000 dealers nationwide, down 47 percent from early 2023. Buick offered to buy out retailers that didn’t want to invest hundreds of thousands of dollars in tools, equipment and equipment. training to prepare for electric vehicle sales and servicing as the brand goes all-electric by the end of the decade.

We love progressive movements, don’t we? As GM phases out its ICE offerings, these Buick dealers that haven’t made the investment will simply have to become used car lots or service centers. They may be betting on the failure of electric vehicles, but that’s a bet against an entire industry and its regulatory apparatus. Not a bet I would make.

3rd gear: Toyota subsidiary stops sales of all models after falsified crash tests

We may not get Daihatsu cars here in the US, but in other parts of the world they are incredibly popular: small, cost-effective commuters built more for tight urban environments than wide-open American highways. They are also apparently less safe for their occupants than previously advertised. From Reuters:

Toyota Motor’s Daihatsu unit will stop shipping all its vehicles, Japan’s largest automaker said Wednesday, after an investigation into the safety scandal found problems with 64 models, including nearly two dozen sold under the Toyota brand.

An independent panel investigated Daihatsu after it said in April that it had cheated side-impact safety tests for 88,000 small cars, most of which were sold as Toyotas.

The investigation found that the airbag control units Daihatsu used in airbag tests for some models were different from those used in cars sold to the public, including Toyota’s Town Ace and Pixis Joy models and the Mazda Bongo.

Toyota said it was not aware of any accidents related to the problem. It said side impact tests of two models may not meet the law, even though verifications confirmed the airbag met passenger safety standards.

Japan’s Transport Ministry said it would conduct an on-site inspection at Daihatsu’s headquarters in Osaka on Thursday.

If Daihatsu willingly admitted to cheating crash tests, how bad are things really at the company? It appears that this is what the researchers are now trying to determine.

4th gear: Ford again had more recalls than any other U.S. automaker in 2023

All car manufacturers have recalls. Some have more than others. Here in the US, it seems like no one has more recalls – or bigger recalls – year after year than the Blue Oval. Things appear to be stabilizing for Ford, as it had fewer recalls this year than in 2022, but the overall quality feel is still off. From Automotive News:

For the third year in a row, Ford Motor Co. the most recalls of any U.S. automaker, partial NHTSA data shows.

Through December 18, Ford has issued 54 recalls this year, affecting nearly 5.7 million vehicles in the US. However, that’s down about 21 percent from the number of recalls in 2022, when the automaker reported 68 recalls affecting more than 8.7 million vehicles.

In 2021, Ford issued 53 recalls affecting nearly 5.4 million vehicles. General Motors led with the highest number of vehicle and equipment recalls, totaling nearly 8 million for the year, according to the data.

This story also provides a good insight into the scale of car production in the United States. Tesla, the company that recently recalled every vehicle with its flagship Autopilot technology, doesn’t even come close to Ford’s total number of recalls.

Reverse: Do you know how long it takes a working man to save $5,000?

Neutral: What’s your Christmas morning method?

I was watching A Christmas Story yesterday and it got me thinking about different approaches to Christmas morning. In my family the rule has always been “only stock presents until all the parents are awake,” but Ralphie’s family just seems to let the kids handle all the gifts. If you celebrated Christmas growing up, what was your approach? If not, did you have a strange view of another holiday?

On the radio: HEALTH – “DSM-V”

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