Driving into the future
PLENTY OF NEW PRODUCTS WE’VE BEEN READING ABOUT WILL SOON BE SHOWING UP ON THE MARKET
When the auto show season kicks off each year, we promise you that the car industry will reach peaks and push limits we could never have imagined. The year 2022 is no different, but there is no denying it is at a place nobody could have predicted, and most of us will never forget.
Our inaugural roundtable discussion provided an overview of what’s new, what’s working, what’s changed and what to expect. David Booth, perched on the auto show floor from Los Angeles; Andrew Mccredie, Driving’s resident electric vehicle expert; George Iny, executive director of the Automobile Protection Association; and Daniel Ross, a senior automotive analyst from Canadian Black Book all weighed in on what they think the future holds for both manufacturers and buyers as we found yet another corner in an industry that has been upturned.
What scored mentions from our panellists? The Toyota BZ4X, a new all-electric offering from that manufacturer; more love for plug-in hybrids in general; the Toyota Camry for the sedan-seekers; the Hyundai Ioniq 5; Vinfast, a new electric manufacturer out of Vietnam building under licence from BMW; Cadillac Lyriq; Rivian trucks; F150 Lightning; Chevy Bolt; Hyundai Venue; Lucid Air; and lastly, lots of love for the Ford Maverick.
Mccredie says global shortages of superconductors, which will be an important component of this discussion, have made it difficult to track the demand for electric cars.
“We’d been on a good trajectory before the pandemic hit,” says Mccredie, admitting that segment felt the hit the same as the others.
The good news? Lots of new product will be coming to market, and many of those vehicles you’ve just been reading about over the past few years will finally be showing up at dealers.
Mccredie has high hopes for Hyundai’s newest Ioniq 5, built on its E-GMP platform, the so-called “skateboard” platform for that company’s electric vehicles. The ability to have a platform that can translate to and underpin small coupes to large SUVS is the future for many manufacturers.
Volkswagen’s ID.4 is already here, and this MEB platform heralds VW’S commitment to going all-in on electric. Mccredie says these interchangeable platforms will mean far shorter wait times for model changes.
Iny hops in to remind us that 95 per cent of current sales are still traditional gas engines and that regional markets and available rebates still play a huge role in the adoption of this emerging market.
Asked if buyers will be able to find incentives in 2022, he replied, “Manufacturers are still promoting the idea that you can finance for little, their cost of borrowing is very low and they’re continuing to pass on some benefits to customers.”
Iny admits to being surprised at seeing RAM and Jeep vehicles being advertised this week with very large incentives, though it’s a bit of a head-scratcher if they can’t get their hands on the inventory.
The public is willing to wait, and they’re willing to spend. Many are upsizing, which may be a spinoff from a huge shift in how much Canadians saved over the course of the pandemic by not spending.
Ross says that’s required rapid reactions from those who track the market, like Canadian Black Book.
“Retained values are definitely up versus previous forecasts that we had,” he says. “At the beginning of the pandemic, we took a measured approach but we’ve had to revise that significantly because the market quickly turned 180 degrees.”
Tight inventories have led some consumers to wait, but Ross says those are usually people who already have reliable transportation. Despite full pricing, inventories continue to be flying out the showroom doors, though buyers may be compromising on requirements and preferences.
Ross says the shortage of new cars is sending people to the used market, and that has put used vehicle values at an all-time high.
Important advice from Iny regarding those with leases coming due: you may be able to extend your lease up to six months in anticipation of better stock, especially if you’re working with your same dealer for both vehicles. He cautions against being “unhorsed,” however, as you weigh your options.
The story of the year will be superconductors, as global shortages of the chips that are so ubiquitous in every modern vehicle forced manufacturers to their knees. Booth spoke to the workarounds that, instead of being temporary fixes, are now becoming permanent features.
“We all think of chips as the high-powered ones that go into our phones ... but the problem is the tiny little league dime-store chips that seemingly run many devices in the car,” Booth says.
Peugeot in France, for example, had to put analog speedometers back in its cars because the specific chip wasn’t available.
“BMW is shipping 3-Series, 5-Series, and 7-Series with screens that aren’t touch screens anymore . ... They don’t have chips for them,” says Booth.
He says they won’t be able to be upgraded at a later date, so buyers, make sure you’re aware of any changes caused by missing chips.
“The majority of buyers looking for a new car are now hunting for one,” Ross says about the market.
The predatory nature of that hunt means that hesitating before buying a car may mean that vehicle will be gone by the time you make up your mind.
“Low sales now will equate to low amounts of used cars in the future. This scenario is not going to go away quickly,” Ross says.
Neither is the rising fuel cost scenario. We continue to love and buy out the truck and SUV market, but where will we end up as the triple whammy hits: higher interest rates, rising fuel costs and inflation?
Low sales now will equate to low amounts of used cars in the future. This scenario is not going to go away quickly.
- daniel ross