Why yes, I have been up for four hours, why do you ask? Things are happening today and we got our own little October surprise in the form of car sales which, by one measure, were up 12% year-over-year even with stubborn headwinds. One place they weren’t up is at Toyota, which might be a good thing for you if you’re really jonesing for a Highlander but haven’t been able to get one for a good price.
Toyota has been butter in Manhattan (on a roll) for the last few years, but what goes up must eventually come down and the automaker is finally seeing sales slow down just the tiniest bit and incentives going up just a tiny bit more. This is a good thing for consumers.
Elon Musk is a… just kidding. I’m not going to do that to you today.
If you work at Ford you might be happy that federal regulators are closing an investigation into an engine recall impacting EcoBoost motors with intake valves as brittle as my nerves around 5:00 pm tonight. If you live in Britain you have even more to celebrate as Dacia is now offering the smallest, cheapest electric van. It’s cheap. And cute.
Deep breath. Let’s Morning Dump.
Car Sales Were A Bit Of An October Surprise
More new cars are being sold than last year, but it’s been a generally slow market with only gentle increases most months. The assumption has been that there’s a lot of pent-up demand and a number of factors have kept buyers out of dealer showrooms. There’s the presidential election which, maybe, will be over soon. Consumer confidence has been a mixed bag. Interest rate cuts have been slow to come and even slower to filter down to buyers. High on profits, some automakers have been reluctant to discount as quickly as they should.
Overall, the future is uncertain and cars are still expensive for varying reasons.
And yet, October was a big month for a lot of people according to Automotive News:
The U.S. new light-vehicle market racked up a 12 percent gain in October, providing some momentum as the key fourth quarter unfolds after a lackluster third quarter.
New light truck and car sales totaled 1.343 million last month, GlobalData said in a preliminary report, exceeding the company’s forecast by some 15,000. Higher incentives, wider selection and extra selling days appeared to help drive volume higher, analysts said.
The market was expected to increase 8 to 11 percent in October, spurred by stronger retail volume that offset lower fleet deliveries, according to forecasts from J.D. Power, GlobalData, Cox Automotive and S&P Global Mobility.
What’s driving this demand? The election certainly wasn’t over as everyone you know who lives in Pennsylvania has been visited by folks from, like, Hastings-on-Hudson every other damn day. Even accounting for extra selling days, it was a great month for many brands.
Incentives are part of it and Automotive News says they were up 71% on average compared to October 2023 when we were still coming out of inventory shortages. The other big part of this, I think, is that consumer confidence is starting to pick up for whatever reason, as Cox Automotive has noted:
Consumer confidence continues to rise, with sentiment indices reaching the highest levels since spring 2021, driven partly by declining gas prices.
Generally speaking, economic indicators have been positive for a while. For all the doom and gloom over the last two years, the economy seems to be recovering just fine. In theory, this should mean a great November and December. Why might it not be? Because three years ago we were in the midst of supply chain-induced inventory shortages and this led to lower leasing. With fewer leases coming due, those customers are likely not in the market.
Toyota Will Probably Post A Profit Drop This Quarter And That Might Not Be Bad News For You
For the first time in two years, Toyota is going to report that it’s likely to not make quite as much money as it had been making. This isn’t like Aston Martin, Toyota still makes a lot of money, it’s just probably going to say it made a little less a lot of money than it has in the past.
Having ridden the hybrid train hard to record earnings, Toyota is slowing down just a touch.
The Japanese automaker is expected to report a 14% year-on-year operating profit decline in July-September, to 1.2 trillion yen ($7.9 billion), according to the average of nine analyst estimates in an LSEG poll.
That would mark its first profit decrease since the same quarter in 2022. It has already said quarterly global sales shrank 4% from a year earlier and that output declined 7%.
What’s happening? Some of this is just physics as Toyota’s stellar run has to slow down at some point. Additionally, Toyota is seeing its competition, like Mazda, up its incentives a lot in the United States. A stop-sale order for its new three-row Lexus TX and Grand Highlander also hasn’t helped.
This might be good news for you as Toyota has such a tight inventory that it’s been hard, though not impossible, to score big incentives on a lot of the brand’s bread-and-butter vehicles. Toyota seems to recognize this as incentives rose $686 to $1,669. It’s less than half what Mazda offered in October ($3,573), which goes to show you how popular Toyotas are right now.
Even better, Toyota is trying to move more of its Grand Highlanders and has introduced an entry-level LE version
This new trim is available in a choice of 2.5-liter Hybrid with standard electronic on-demand All Wheel Drive (AWD) or a 2.4-liter, 4 cylinder turbocharged gas-powered variant with available Front- or All Wheel Drive. Along with Grand Highlander’s signature spacious interior, it has great standard features like seating for eight with 60/40-fold down second and third row seating, 13 cup and bottle holders, and a 12.3-inch touchscreen with Toyota Audio Multimedia system. It also has a power liftgate, heated power outside mirrors with blind spot warning indicators, and Toyota Safety Sense 3.0 (TSS 3.0), standard. Altogether, it makes the LE grade an exceptional option for drivers who prioritize value without compromising on quality or features.
The LE trim will start at $40,860 (pre-destination) for an LE FWD and $44,120 for the hybrid. That’s a good deal.
Ford Skates On Second Engine Recall
Ford’s Jim Farley has been on a mission for the last year to restore quality as job #1 at the company after it fell to, I don’t know, maybe job #13 for a while. It was the job right after “make sure a big gulp fits in the cupholder” but ahead of “naming the fun scents for Lincolns.”
Unfortunately for him, Ford still has to contend with the ghosts of its shaky quality past. A recall for about 400,000 vehicles built with either the 2.7-liter or 3.0-liter EcoBoost engines was supposed to deal with the problem of cracked intake valves grenading engines. But did it though?
Ford’s contention was that if this was going to happen it was almost certainly going to happen under 20,000 miles, meaning that any car that had the brittle valves likely already experienced the issue and has had its engine replaced. The National Highway Traffic Safety Administration investigated Ford’s analysis just to be sure and ultimately agreed:
The results of this analysis, and the trends identified through the failure report data are generally consistent with Ford’s assessment that defective intake valves will likely fail at a low time in service and indicate that the majority of subject vehicles equipped with defective valves have already experienced a failure.
Anyone with one of those motors will have a 10-year, 150-mile extended warranty to fall back on should something happen.
Look At This Cute Cheap Electric Van
I’m no just the President of the Dacia Spring Is A Good Cheap Car Club, I’m also a member. This little EV is cute and, better than anything else, it’s cheap. One of these in the lowest trim goes for £14,995 in the UK, or under $20,000, which gives you about 140 miles on the mixed European WLTP test cycle. Cars tend to be a bit more expensive in the UK and food/theatre tickets are cheaper. If you put both the inflated price and test cycle through the Americanizer you can think of it as an EV that goes about 120 miles and hypothetically could cost about $18k.
And now there’s a van version!
With the rear seats removed and a mesh bulkhead fitted, the N1 homologated Spring Cargo is a clever van version of Britain’s most affordable new electric car, the All-New Dacia Spring.
As a compact van that’s only 3.7m long with a turning radius of just 4.8m, the Spring Cargo is ideal for city driving. It also offers a generous payload of 370 kg with 1085 litres of load space that’s easily accessed from the rear doors or tailgate.
Around town, the 26.8 kWh battery offers plenty of range with up to 186 miles available (WLTP urban cycle) or 140 miles (WLTP mixed cycle) with fast charging from 20% to 80% in 45 minutes.
The starting price is also £14,995, so if you’re delivering compact things in a city environment it’s a cheap way to do it.
What I’m Listening To While Writing TMD
This was parodied by Austin Powers, but here’s “Soul Bossa Nova” from the late, great Quincy Jones getting the full Bob Fosse treatment. It just oozes funky cool.
The Big Question
What do you call a sandwich made with a long roll of bread, generally sliced in half, and filled with ingredients like meats, cheese, and veggies?
It is a sub.
And as someone who checks Toyota dealer inventory every two weeks or so, the hard to buy cars are still hard to buy. Highlander, Sienna, Prius, RAV4 Hybrid, Corolla Cross Hybrid. RAV4 Primes seem to have run out of steam finally. The seem to produce plenty of Camrys, so they aren’t unobtanium, but they seem to be moving.
The trucks seem to be where the “reductions” are happening. Tundras and Tacomas seem to be piling up. I think the Tacoma is just too expensive. Any time I see the suggestion of a “deal” on a Toyota dealer site it is always a Tundra or Tacoma deal.
Hopefully they’ll crank out Grand Highlanders and the TX when they start building again so I can buy one. And make the TX in Nori Green Metallic for 2025!
Sub. Or, sandwich-submarino if you’re not into the whole brevity thing.
I don’t know what that Dacia is, but it’s not a van.