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Aug 12, 2021


Mercedes-Benz is telling the owners of more than 292,000 vehicles in the US to stop driving them due to a problem that could cause the brakes to fail. The German automaker is recalling the vehicles and says it will offer free towing so the owners can get them to a dealership for service. The recall covers certain ML, GL and R-Class vehicles from the 2006 through 2012 model years. Mercedes says in documents posted Thursday by the National Highway Traffic Safety Administration that moisture can get into a brake booster housing and cause corrosion. That can cause a vacuum leak, which would decrease brake performance.

Tesla is recalling about 48,000 Model 3 Performance vehicles in the US because they may not display the speedometer while in “Track Mode,” documents released Friday show. The recall covers vehicles from the 2018 through 2022 model years. Tesla will perform an over-the-air software update to address the issue. Tesla said a firmware update released in December unintentionally removed the speed unit from the user interface.

The National Highway Traffic Safety Administration said the vehicles do not comply with a federal motor vehicle safety standard and if drivers do not know how fast they are traveling it could increase the risk of a crash. Over the last year, Tesla has been issuing more recalls, including some under pressure from NHTSA. Tesla separately on Friday recalled one 2022 Model X vehicle because a bracket was not installed at the second-row seat. Tesla has issued a total of 10 recall campaigns in 2022 covering 2.1 million vehicles, NHTSA said, but some vehicles are covered by more than one campaign.

Ford is recalling more than 650,000 pickup trucks and big SUVs in the US because the windshield wipers can break and fail. The recall covers certain F-150 pickups, and Ford Expedition and Lincoln Navigator SUVs from the 2020 and 2021 model years. Also included are F-250, 350, 450 and 550 trucks from 2020 through 2022. Ford’s F-Series pickups are the top-selling vehicles in the US. The company says in documents posted Thursday by US safety regulators that teeth on the wipers aren’t the right height. That can cause the wiper arms to become stripped. Documents say malfunctioning wiper arms can reduce visibility and increase the risk of a crash.


As new vehicle inventory remains constant, and prices for both new and used cars begin to level off, dealers are continuing to benefit from high levels of profit. New vehicle sales in the U.S increased to 14.3 million units on a seasonally adjusted basis in April 2022 from the previous month’s sales of 13.3 million units. However, April 2022’s sales was down 21.9% compared to the stellar sales pace seen in April 2021 which was driven by strong consumer demand and enough inventory available to meet that demand. April 2021 was one of the last sales months before inventory began to decline significantly and limit the sales pace. “We don’t expect that April’s month-end inventory level will change much from March’s level of 1.23 million units as the industry is still unable to produce enough vehicles to meet current demand, let alone restock dealer lots,” NADA said in a monthly report. “For the rest of the year vehicle availability will continue to be the principal limiting factor for new light-vehicle sales. Our forecast for sales in all of 2022 remains unchanged at 15.4 million units,” it added. 

Historically, the first week of May is an exciting time for new model year launches and an increase of lease returns in the auction lanes. This year, like the past 2 years, has been plagued with microchip shortages and supply chain issues causing a significant reduction in both new inventory production and used lease and fleet returns in the wholesale market.

Toyota Motor Corp. is getting closer to using up a key U.S. tax credit for hybrid and electric vehicles, a situation company leaders say will raise its costs and hinder the adoption of climate-friendly cars. The consistency of new vehicle inventory levels over the last six months suggests that the industry is readjusting to a ‘new normal’ level of inventory while increasing vehicle prices indicate low inventory levels continue to generate strong gross for dealers and profit for OEMs.

As gas prices hit record highs, some Americans might be tempted to go electric and ease the pain at the pump. But finding a shiny, new electric vehicle might not be so easy.

National inventory levels of vehicles — including EVs — were depleted during the pandemic by a combination of pent-up demand and supply chain problems. Drivers looking to buy an EV today might have to wait for months, or more, before the cars are delivered. And yet, rising fuel prices continue to plague both businesses and consumers, with the national average for gas hitting a record $4.59 a gallon, according to AAA. The rise in fuel costs — a 51% spike from a year ago — comes ahead of a summer travel season that’s expected to be bustling, and at a time when decades-high inflation is stoking recessionary fears among investors. The low availability of vehicles, including EVs, has been driven in part by supply chain problems — most notably a shortage of semiconductor chips since early 2021 — that have led automakers to idle plants, leaving fewer cars and trucks available for consumers.

- By Staff

Aug 12, 2021


Delinquencies on subprime auto loans packaged into bonds rose in January to 4.7 percent, a level not seen since 2010, according to data from Wells Fargo & CoMore borrowers with spotty credit are failing to make monthly car payments on time, a troubling sign for some lenders, automakers and dealers. Investors who have snapped up billions of dollars of securities backed by risky auto debt are also vulnerable, analysts say. Delinquencies on subprime auto loans packaged into bonds rose in January to 4.7 percent, a level not seen since 2010, according to data from Wells Fargo & Co.

Rising delinquencies come as a warning sign that more loans may end up in default down the road, said John McElravey, an analyst at the bank. What may be most troubling, however, is that the default rate is already climbing, up to 12.3 percent in January from 11.3 the prior month. That is the highest rate since 2010, the data show. Securities backed by auto loans are structured to absorb a portion of anticipated defaults, but concerns have mounted over the last year that cumulative losses on auto loan securitizations may end up exceeding initial estimates, thanks to declining underwriting standards. Loan performance may be worsening because of a number of factors, including a rise in initial jobless claims, said McElravey.

He identified an auto finance company in Texas, for example, that began experiencing a noticeable increase in net losses six months ago. The increase coincided with a rise in unemployment in Texas, where the oil industry has been hit hard by prolonged low prices, he said. The data are worth watching closely, he added, especially against the backdrop of sub-par economic growth.

- By Staff