It’s no secret that the used car market is absolutely bonkers lately, but demand has gotten so strong and supply so tight that one dealer says he’s now buying cars he previously would never have considered.
“We’ve been seeing things clear at 103%, 110% to MMR (Manheim Market Report)- cars that we bring in we would never sell that are damaged, like frame damage or need massive engine rebuild,” said Toby Russell, co-CEO at online used vehicle marketplace Shift.com, in an interview with Forbes.
“Normally we would lose a little money on that, but we’re making money on these because auction pricing is so intense and high. It’s just a total dislocation in the market caused by a surge in demand and lack of supply coming from new cars,” he said.
Russell told Forbes that Shift now pays 25% more for vehicles than it did a the start of the year.
“That’s like crazy,” he said. “Usually used cars will depreciate 1% per week but the car sitting in your driveway is likely to be worth 25-30% more than it was in January.”
At the start of May, used-vehicle prices reached an all-time high, topping more than $22,500, according to a Cox Automotive analysis of vAuto Available Inventory data.
“Given the strong demand from consumers, and the tight supply situation, it seems likely that used-vehicle prices, already at all-time highs, will continue to rise,” said Charlie Chesbrough, Cox Automotive senior economist. “At some point, prices will become too high, and demand will recede. But we are not there yet.”
The supply of used vehicles on dealers’ lots is less than half of what it was this time last year (fewer people were buying cars then), and it’s also well below the same month in 2019.
As sales taper off from their frenetic pace earlier in the spring, Chesbrough says there’s a simple reason for the slowdown: “Folks can’t buy what isn’t there.”
Jonathan Banks, vice president of Valuations Services at J.D. Power, said used retail prices are up 15% this year with no signs of backing down.
“Used-vehicle prices have shown no signs of softening and are expected to remain exceptionally strong for the foreseeable future,” he said.
If you are looking to buy or sell a car and have a story to share, contact this reporter at dreuter@insider.com
Tesla shares dropped Tuesday after the electric vehicle maker’s monthly sales in China fell by on a double-digit percentage basis, setting the stock on course for a second consecutive session of losses.
The company sold 25,845 vehicles made in China in April, a fall of 27% from the 35,478 vehicles sold in March, the China Passenger Car Association reportedly said Tuesday.
In a separate report from Reuters, Tesla, due to uncertainty created by tensions between the US and China, has put on hold plans to buy land to expand its flagship plant in Shanghai into a global export hub. The report cited people familiar with the matter.
Tesla dropped as much as 7.3% to $583.20 during premarket trade then pared the fall to 1.7% after the regular trading session began. Losses on Tuesday would add to the stock’s 6.5% drop on Monday when fears of rising inflation prompted a selloff in the broader tech sector. The shares, however, have jumped by roughly 288% over the past 12 months.
The company’s market share gains stagnated against domestic vehicle makers Nio, Xpeng, and Li Auto in April as the company faced “a handful of negative PR issues in China” related in part to safety issues and a protest at the Shanghai Auto Expo, said Wedbush analyst Dan Ives in a note Tuesday.
“Taking a step back, Tesla is clearly facing chip shortage issues which is putting more pressure on production and logistics to fulfill demand globally and speaks to more cars heading to Europe this month than the Street expected,” Ives said, adding that Tesla’s overall China demand appears on track for an annual run rate of at least 300,000 units and is poised to represent about 40% of deliveries for Tesla by 2022.
“That said, clearly Musk & Co. need to play nice in the sandbox with Beijing and smooth out PR issues in the region which have been a black eye for Tesla over the last month and clearly impacted China sales negatively in the month of April,” said Ives, referring to Tesla’s CEO Elon Musk. Wedbush maintained its outperform rating on Tesla and its $1,000 price target.
Ford’s electric Mustang Mach-E appears to be cutting into Tesla’s comfortable lead in the electric-vehicle market right out of the gate.
The Mustang Mach-E was the third highest selling electric car model in the US in its first full months of sales, according to a report from Morgan Stanley on Thursday. The car trailed behind Tesla’s Model 3 and Model Y in February.
While Ford has only sold 6,614 units of the new SUVs to date, Tesla’s share of the US electric-car market fell to 69% in February, down from 81% in the prior year, an earlier Morgan Stanley report dated March 3 found. What’s more, the Mustang accounted for nearly all of Tesla’s market-share losses, the bank said.
Ford’s first-quarter vehicle sales were up over 23% year-over-year, the automaker said Thursday, with electrified vehicle sales rising 74%, thanks mainly to the Mustang Mach-E and F-150 PowerBoost Hybrid sales.
Tesla’s first quarter numbers are expected to be released as soon as Thursday afternoon.
Despite the new competition – of which Ford is far from the only source – Morgan Stanley’s analysis found that Tesla’s US sales are still on the rise, with more car buyers continuing to look into purchasing an electric vehicle. EV sales in the US climbed 34% in February from the previous year, while traditional internal-combustion-engine-car sales dropped 5.4%.
One-fifth of the Mustang Mach-E’s sold in February were in California, Ford said, a key market for the industry. In 2019, the state accounted for nearly half of Tesla’s Model 3 sales.
“We do not aim to argue that one vehicle is necessarily superior to the other (many consumers will continue to prefer the Model Y’s greater availability of semi-autonomous driving features and Tesla brand, while others will be attracted to the Mach-E’s styling and availability of a $7,500 federal tax credit),” they said.
In March, Tesla CEO Elon Musk seemed to compliment Ford’s role in the electric-car market.
“Tesla & Ford are the only American carmakers not to have gone bankrupt out of 1000’s of car startups,” he tweeted in response to a reporter’s post about the high-risk nature of the automobile industry. “Prototypes are easy, production is hard & being cash flow positive is excruciating.”
“One could argue this indicates that, while Tesla’s appeal is clearly formidable, it’s not absolute and could be displaced by a worthy alternative,” said Stewart Stropp, senior director of automotive retail at J.D. Power, in the survey.
The company is working to compete in the market. The carmaker plans to design a $25,000 car and has expanded its manufacturing plants into China, building a Shanghai Gigafactory.
“China is the linchpin of growth for EV market,” Dan Ives, an analyst at Wedbush, told clients in March. “We believe China could see eye-popping demand into 2021 and 2022 across the board, with Tesla’s flagship Giga 3 footprint a major competitive advantage.”
Ford’s electric Mustang Mach-E appears to be cutting into Tesla’s comfortable lead in the electric vehicle market right out of the gate.
While Ford sold only 3,739 of the new SUVs in February, Tesla’s share of the US electric car market fell to 69% in the same month, down from 81% in the prior year, a Morgan Stanley report found. What’s more, the Mustang accounted for nearly all of Tesla’s market share losses, the bank said.
Despite the new competition – of which Ford is far from the only source – Morgan Stanley’s analysis found Tesla’s US sales are still on the rise, with more car buyers are continuing to look into purchasing an electric vehicle. EV sales in the US climbed 34% in February from the previous year, while traditional internal combustion engine car sales dropped 5.4%.
One-fifth of the Mustang Mach-E’s sold in February were in California, Ford said, a key market for the industry. In 2019, the state accounted for nearly half of Tesla’s Model 3 sales.
“We do not aim to argue that one vehicle is necessarily superior to the other (many consumers will continue to prefer the Model Y’s greater availability of semi-autonomous driving features and Tesla brand, while others will be attracted to the Mach-E’s styling and availability of a $7,500 federal tax credit),” they said.
On Thursday, Tesla CEO Elon Musk seemed to compliment Ford’s role in the electric car market.
“Tesla & Ford are the only American carmakers not to have gone bankrupt out of 1000’s of car startups,” he said on Twitter in response to a reporter’s post about the high risk nature of the automobile industry. “Prototypes are easy, production is hard & being cash flow positive is excruciating.”
“One could argue this indicates that, while Tesla’s appeal is clearly formidable, it’s not absolute and could be displaced by a worthy alternative,” said Stewart Stropp, senior director of automotive retail at J.D. Power, said in the survey.
The company is actively working to continue to compete in the market. The carmakers plans to design a $25,000 car and has expanded its manufacturing plants into China, building a Shanghai Gigafactory.
“China is the linchpin of growth for EV market,” Dan Ives, an analyst at Wedbush, told clients Thursday. “We believe China could see eye popping demand into 2021 and 2022 across the board with Tesla’s flagship Giga 3 footprint a major competitive advantage.”
The auto industry is in the midst of a crossover boom – and for every new compact crossover automakers bring to market, some sorry sedan or hatchback heads to the automotive graveyard.
The list of models that won’t live to see the 2021 model year includes some iconic and long-running nameplates like the Lincoln Continental, Chevy Impala, and Dodge Grand Caravan, along with some short-lived models that just didn’t manage to catch on, like Jaguar’s high-performance station wagon and Alfa Romeo’s inexpensive mid-engine sports car.
And although the models that won’t live to see the 2021 model year span makes and price points, the one thing that unites nearly all of them is that they’re not crossovers. In fact, after the 2020 model year, multiple brands – Cadillac, Lincoln, Buick, and Ford among them – will have transitioned to lineups that don’t include a single sedan.
Check out 25 cars automakers killed off for 2021 below:
Acura RLX
2020 Acura RLX.
Acura
The RLX luxury sedan is out of Acura’s 2021 lineup after selling just over 1,000 units in 2019. Acura sold roughly 50 times that amount of its MDX crossover, and around 60 times more RDX crossovers.
It has unusual features like rear-wheel steering and a sporty hybrid option with a claimed 377 horsepower, but that wasn’t enough to keep buyers interested.
Alfa Romeo 4C Spider
Alfa Romeo 4C Spider.
Hollis Johnson
Alfa Romeo killed off the hardtop version of the 4C a few years back, and the roadster follows in its footsteps for 2021. Starting at under $70,000, the 4C is one of the most affordable mid-engined sports cars on the market – but alas, it barely broke triple-digit sales in 2019 and so it’s gone for good.
After six years on the market, it’s the end of the line for the plug-in hybrid i8. Despite its somewhat confused combination of exotic looks and a tiny three-cylinder engine (aided by electric motors), the i8 managed to sell more than 20,000 units in its run, making it the best-selling car of its kind, according to BMW.
Rumors have circulated around a possible i8 successor based on the Vision M Next concept car, but there’s no official word yet on when or if that will happen.
BMW M8 Coupe and Convertible
BMW M8 Coupe and Convertible.
BMW
BMW is trimming the options available for its halo M8 due to COVID-19-related supply issues, Car and Driver reported in October. The coupe and convertible won’t be available for 2021, but the four-door Gran Coupe version is still on the table if you have a spare $130,000 laying around.
Buick Regal
2019 Buck Regal GS.
Buick
After nearly 50 years on the market, GM has canceled the Buick Regal as part of its shift away from passenger cars. The move means the Buick brand will have an all-SUV lineup going into the 2021 model year.
Cadillac CT6
The Cadillac CT6-V, which had the Blackwing engine.
Cadillac
Cadillac made a name for itself building gigantic land yachts, but it’s pared back its sedan lineup in recent years. Its biggest sedan won’t make it to 2021, despite being one of Caddy’s technological leaders and the only vehicle to get its twin-turbocharged, 4.2-liter, 550-horsepower Blackwing V8.
Chevrolet Impala
2018 Chevrolet Impala.
Chevrolet
The iconic Impala nameplate bites the dust this year, but it’s not the first time GM has discontinued the model. It’s been on the market in spurts since the late 1950s – so there’s still hope it returns once the nostalgia sets in.
Chevrolet Sonic
Chevrolet Sonic.
Chevrolet
The demise of the small car claims another victim in the Chevy Sonic. Sales of the inexpensive hatchback and sedan peaked in 2014, when Chevy sold nearly 94,000 of them, but plummeted below 14,000 in 2019.
It started its life outside the US as the Aveo, and, like lots of compact cars that don’t find success stateside, it will live on in other markets.
Dodge Grand Caravan
Dodge Grand Caravan.
FCA
The Dodge Grand Caravan arguably birthed the minivan segment when it came on the scene in 1984 along with its upmarket sibling, the Plymouth Voyager. Now, as crossovers and full-size SUVs have superseded minivans as America’s family hauler of choice, the minivan that started it all is no more.
But Fiat Chrysler isn’t out of the minivan game altogether – it still sells the Chrysler Pacifica, which got a facelift for 2021.
Dodge Journey
2020 Dodge Journey.
Dodge
The Dodge Journey is the only crossover to kick the bucket for 2021, which speaks volumes of its consumer appeal – or lack thereof. As of May, nearly half of 2019 Journeys sat unsold on dealer lots, according to car search engine iSeeCars.
Ford Fusion
Ford Fusion.
Ford
Ford announced plans to discontinue all of its sedans back in 2018, and it’s achieved that with the demise of the Fusion. The Focus, Fiesta, and Taurus have all left the scene as well, leaving the Ecosport compact crossover as Ford’s entry-level offering.
Ford Mustang Shelby GT350
2020 Ford Mustang Shelby GT350R Heritage Edition.
Ford
The V8-powered, manual-transmission-only Mustang Shelby GT350 and GT350R pay homage to the famed Shelby GT350 of the 1960s, which kicked off the Mustang’s high-performance reputation. But that rich history wasn’t enough for the Blue Oval to keep it around.
For buyers who desire no less than an absurdly powerful sports car bearing the Shelby name, the 760-horsepower Shelby GT500 is still on the market.
Honda Civic Coupe and Civic Si
The 2020 Honda Civic Si.
Alanis King
Honda is launching a new, 11th generation of the Civic for 2021, and some changes are coming to the popular model’s lineup. The two-door Civic Coupe variant bites the dust after the 2020 model year, while the sporty Si will take a hiatus for 2021 and return for the following model year.
Honda Fit
Honda Fit.
Honda
Carmakers are getting rid of small hatchbacks left and right, and Honda is no exception. It’s axing the Fit, despite the little guy being widely regarded as one of the best compact economy cars money can buy.
It’s an understandable move, given that Fit sales have declined as appetite for the brand’s crossovers grows. Now the cheapest vehicle in Honda’s lineup is the $21,000 HR-V, which outsold the Fit three-to-one in 2019.
Hyundai Elantra GT
Hyundai Elantra GT.
Hyundai
The hatchback version of the Hyundai Elantra heads to the great junkyard in the sky after the 2020 model year, along with its sporty sibling, the GT N Line. Hyundai said the hatchback was displaced by the compact Venue and Kona crossovers.
But the Veloster and Veloster N carry over to 2021.
Jaguar XE
Jaguar XE.
Jaguar
Jaguar is eliminating its entry-level sport sedan, the XE, from its US lineup after selling only 3,551 of them in 2019. By comparison, BMW regularly sells well over 40,000 3-Series sedans annually, while Mercedes-Benz moved some 50,000 C-Class sedans in 2019.
For 2021, the XF sedan assumes the entry-level spot and gets a significant price cut to match.
Jaguar XF Sportbrake
Hollis Johnson/Business Insider
Wagons are also going by the wayside as crossovers take over, and Jaguar is pulling its one and only long-roof model, the XF Sportbrake, from the American market after only three model years. In that time, Jaguar sold fewer than 250 of the wagons, according to Road & Track.
Buyers in the market for a luxury wagon will need to look to offerings like the Volvo V90, Mercedes-Benz E-Class, Audi A6 Avant, or Porsche Panamera Sport Turismo come 2021.
Kia Optima
Kia Optima.
Kia
The Kia Optima is on its way out after two decades in production. But the South Korean carmaker isn’t abandoning sedans like some of its US counterparts – the Optima is succeeded by a sleek new mid-sized model called the K5.
Lexus GS
2020 Lexus GS.
Lexus
The Lexus GS hit the scene in the early 1990s and has endured through four generations. This particular rear-wheel-drive sedan may be going away after 2020, but Lexus-sedan stans will still be able to choose the ES, LS, and IS.
Lincoln Continental
Lincoln Continental.
Lincoln
Lincoln has used the Continental name on and off for some 80 years, and this latest version of the car is dead for 2021. But given the nameplate’s deep history, there’s a good shot it will come back someday – perhaps on some future electric luxury sedan.
Lincoln MKZ
Lincoln MKZ.
Lincoln
With the MKZ and Continental gone for 2021, Lincoln is left with an all-SUV lineup of the Nautilus, Aviator, Corsair, and the flagship Navigator.
And the numbers back up Lincoln’s move. In 2019, the brand sold some 88,000 SUVs and fewer than 25,000 sedans – and that’s with only a partial year of Aviator sales.
Following this year’s lineup shakeups at Ford and Lincoln, the Mustang is the Blue Oval’s only car left standing.
Mercedes-Benz SLC
Mercedes-Benz SLC.
Mercedes-Benz
The Mercedes-Benz SLC is has been officially discontinued with no successor planned, following more than two decades of continuous production. For the model’s last hurrah, Mercedes added a yellow 2020 SLC Final Edition to its lineup.
Toyota Yaris
Toyota Yaris.
Toyota
The death of the Toyota Yaris, Honda Fit, Chevy Sonic, and Hyundai Elantra GT this year – along with the end of the Ford Fiesta and Mazda2 previously – leave a scant few options for fans of subcompacts here in the US.
Despite the Yaris being a favorite among lovers of small cars, it hasn’t sold well in the US as of late. Fewer than 22,000 of them rolled off of dealer lots in 2019, as compared with 304,850 Corollas, 336,978 Camrys, and 448,071 Rav4 crossovers.
A global shortage of computer chips has caused shutdowns at several automotive manufacturing plants – and car dealerships are already reflecting the shortage.
Car shoppers can expect to see an impact in the availability of certain car models due to the chip shortage, as well as a price increase, according to Cars.com executive editor Joe Wiesenfelder. Dealerships may also be less likely to offer deals as supplies dwindle.
“Consumers in the market of considering buying a car should shop now because choices and prices could worsen over the next two quarters,” Wiesenfelder told Insider.
Car companies began halting production at manufacturing plants in North America in the beginning of January.
Semiconductor chips have become an essential part of the manufacturing process for vehicles. The chips are used in navigation, bluetooth, and collision-detection systems and account for about 40% of a new car’s cost, according to a report from Deloitte.
The lack of chips has forced automakers to prioritize production of their higher-priced and more-profitable models.
Here are some of the models Cars.com said may see price increases or limited availability.
Toyota has already started increasing prices
Toyota Tundra CrewMax.
Toyota
The Toyota Tundra was one of the first cars to see a halt in production.
Cars.com said the Tundra has seen a drop in inventory of almost 27% for the month of February. Some Toyota models have already demonstrated price increases, including the Tacoma, which has gone up about $584 or 1.6%, despite only a 4% decrease in inventory, according to Cars.com.
Many Japanese carmakers are seeing an impact. Honda was one of the first car companies to warn of computer chip shortages, according to Bloomberg.
The Japanese carmaker has slashed production at several major manufacturing plants. In particular, shoppers can expect to see some pressure on the Honda Accord, Civic, Insight, and Odyssey, as well as the Acura RDX.
Nissan has had to adjust production in both Japan and North America. A spokesperson told Insider the company is continuing to assess the long-term impact of the chip shortage. For now, the models that have seen slowdowns for the carmaker include the Nissan Altima, Frontier, and Titan.
In February, Subaru reported it planned to cut its production plan for 2021 by about 58,000 cars. The models impacted by the cut include the Subaru Ascent, Impreza, Legacy, and Outback.
Ford and General Motors expect to lose billions of dollars
Workers build Ford F-150 trucks at one of the automaker’s assembly plants.
Associated Press
Ford began slowing down production at its plant in Louisville in January. During Ford’s fourth-quarter earnings call, CFO John Lawler said the chip shortage could cut the company’s first-quarter production by 10% to 20% – a $2.5 billion hit to revenue.
The car models that will be impacted by cuts at Ford plants include the Ford Escape and Lincoln Corsair, which are produced at the Louisville plant. Cars.com said there will also be declines in production of the Ford Edge and Explorer, as well as the Lincoln Aviator and Lincoln Nautilus.
The company announced last week that it was closing three of its North American plants. The manufacturing sites will remain closed until at least mid-March.
The closures are expected to impact the Buick Encore, Cadillac XT4, and GMC Terrain. The company’s Chevrolet line will also see some slowdowns, as the sites that produce Chevrolet Equinox, Malibu, and Trax have been impacted.
Fiat Chrysler and Volkswagen also feel the pinch
Dodge Challenger SRT Hellcat Redeye Widebody
Matthew DeBord/Insider
In January Fiat Chrysler suspended operations at plants in Ontario and Mexico. The slowdowns will impact several Chrysler, Dodge, and Jeep products. Cars.com said dealerships will likely have lower inventories for the Chrysler 300, Pacifica, and Voyager. The Dodge Challenger and Charger may be in shorter supply, as well as the Jeep Cherokee and Compass.
BMW, Mercedes-Benz, and Volkswagen were some of the first car companies overseas to report shortages. In December, Volkswagen had already begun lowering production rates. The Volkswagen Atlas, Atlas Cross Sport, and Passat have already been impacted by the supply disruption.
Toyota, Honda, Subaru, Ford, GM, Fiat Chrysler, and Volkswagen did not respond in time to comment.
