Toyota Sees a Light at the End of the Tunnel

Photo: Toyota

Toyota sees blue skies ahead, Carvana’s third-party sales are looking dicey, and GM wants in on that sweet sweet subscription revenue. All that and more in The Morning Shift for Friday, December 2, 2022.

1st Gear: Toyota Forecasts Higher Sales For 2023

Car sales have slowly begun recovering from chip-shortage lows, but the shortage itself hasn’t abated. Toyota’s predictions for next year? More incremental sales increases, more shortages on the supply side. Same as it ever was. From Automotive News:

Toyota Motor Corp. believes the microchip shortage that’s plagued the U.S. auto industry is likely to remain for an extended period, even as sales in the U.S. continue to slowly rebound, according to the Japanese automaker’s head of sales.

Jack Hollis, in his first year as executive vice president of sales for Toyota Motor North America, said he sees the industry finishing 2022 at 14 million new vehicle sales in the U.S., with a recovery in 2023 to 15 million as production continues to struggle through supply shortages in microchips and other components.

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“For 2023, we think we’re really going up another million vehicles, which is great, because if you look at where we’ve been so supply constrained, to see there being growth and a path to growth I think is going to be encouraging for everybody in the industry,” Hollis told Automotive News Thursday ahead of the automaker’s annual holiday party for Detroit media.

A seven percent sales jump, moving from 14 million units to 15 million, is still considerable. If that trend keeps up, we could see the car market ever-so-slowly return to its peak. And, for all of us, a new car surge will hopefully drive used prices back down to where they belong.

2nd Gear: Carvana’s Third-Party Sales Aren’t Looking So Hot

If you visit Carvana’s website, you’ll find lots of cars sold by the company. You’ll also find cars not sold by the company, but by outside dealers using the Carvana site as yet another storefront. That offer now seems to be dead. From Automotive News:

Carvana Co. is pulling back on its third-party marketplace program.

The exact status of that program — in which Carvana listed used cars and trucks from dealer partners and other third-party sources for sale on its website alongside Carvana-owned and certified vehicles — is not clear. Its fate had been in question after a screenshot of an apparent program termination notice to the company’s dealer partners circulated on social media in late October.

That screenshot said the company wouldn’t accept new vehicle listings from dealerships after Nov. 30. Carvana had declined to answer queries about the program’s status at that time.

CEO Ernie Garcia confirmed the pullback last month.

What’s next for Carvana? Who knows. The company is facing lawsuits and a possible recession while cutting ancillary revenue streams like this one. All those factors, when combined, generally point to a company that’s extremely financially stable and viable.

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3rd Gear: GM Wants Subscription Dollars

Automakers like BMW And Toyota have toyed with subscription services in their cars, but good old home-grown GM — purveyor of OnStar — would never do that to us. Right? Right?? From Detroit Free Press:

In July, luxury automaker BMW started selling some new eye-popping subscription-based services in various countries, included charging drivers $18 a month for heated seats and $10 per month for a heated steering wheel, features that critics argued should be standard.

General Motors assured investors Thursday it has no intention of charging its customers for those features, but it is certain that vehicle software, and the microtransactions it will allow, such as paying for cloud-based services, will be the bigger business for GM in the future compared with the sale of the hardware − the car − now.

Earlier this year, GM said software-as-a-service will generate $20 billion to $25 billion annually in revenue by 2030. To get there, GM has hundreds of data scientists already studying consumer behavior, promising there will be more subscription services on GM vehicles and looking at ways to tie the sale of a car to software services or to other new GM businesses, such as GM’s auto insurance through OnStar.

Subscriptions are bad, but, as a dyed-in-the-wool piece of shit gamer, I can assure you that microtransactions are far worse. I will not be buying horse armor for my car. Stop this.

4th Gear: November Was A Party And Everyone Was Invited, Except Honda

Automotive News’s roundup of November sales figures is here, and things are looking good. Toyota, Mazda, Subaru, Hyundai, and Kia are all up from last year. But what of Honda? Well, it seems the company’s Black Friday invite was lost in the mail. From Automotive News:

U.S. sales at Toyota Motor Corp., Subaru, Mazda, Hyundai and Kia rose by double-digit percentages last month from a year earlier, with the Hyundai and Kia brands both setting November records. Honda reported a drop for the month.

Deliveries jumped 43 percent at Hyundai and 25 percent at Kia.

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At Toyota, brand sales rose 12 percent, while Lexus fell 4.3 percent. Toyota car sales surged 42 percent, including an 80 percent gain for the Corolla, but the brand sold 3.7 percent fewer SUVs.

Mazda Motor Corp. said November sales surged 31 percent to 26,906 vehicles.

Subaru deliveries rose 52 percent. Sales of the Subaru Crosstrek, Forester and Legacy more than doubled from a year ago.

But American Honda posted a 6.1 percent decline from November 2021. Sales fell 5.2 percent for the Honda brand and 14 percent for Acura.

It’s surprising to see Honda at the bottom of this list, when its current car offering is so good. Maybe Acura needed to move more NSXes before shutting the line down.

5th Gear: UK Insurers Are In Trouble For Undervaluing Cars

Have you ever had a car damaged, and found yourself fighting with insurance over how much the car was worth? It appears that, in the UK, that kind of low-balling is actually illegal. So, that’s one thing they got right. From Reuters:

Britain’s financial watchdog on Friday warned insurers against undervaluing cars and other items when customers submit a damage claim and said it was taking unspecified action against firms breaking its rules.

The Financial Conduct Authority said it has evidence that some consumers who had their cars written off after an accident are being offered sums lower than the vehicle’s fair market value.

Offering a price lower than fair market value is not allowed under the FCA rules.

Now, in the event that these insurers are found to be breaking the law, is that when you call the bobbies? Or is that the rozzers? When does Alex Turner get shoved into a riot van?

Reverse: The End Of Enron-gelion

Neutral: What Have You Been Listening To?

This was Spotify Wrapped week, the day when customer data becomes fun little infographics for us all to share and compare. I’m no exception — losing Wrapped was the hardest part of leaving Spotify, and Last.FM is kind of a poor substitute. But, it’s enough to know that my top song of the year was Mouthful of Diamonds by Phantogram. What was yours?

On The Radio: Phantogram – “Mouthful of Diamonds”

Phantogram – Mouthful Of Diamonds