Sky-high car prices are expected to start declining
As chips and other auto components flow more freely, consumers should finally get some relief
For much of the past three years, car prices knew one direction: upward.
This was simple economics: There was far more demand for new vehicles than manufacturers could meet due to pandemic-related disruptions. As chips, wire harnesses and other components in short supply flow more freely again, a slow but inevitable march to normalization has begun.
Tesla and Ford were among the manufacturers making noteworthy cuts the last couple months, with the latter predicting new-vehicle pricing will fall 5% in the US this year. Elon Musk embellished a bit Wednesday when he suggested Tesla had made minor adjustments to the cost of its models and described affordability as a limiting factor for the company.
In Europe, Volvo and MercedesBenz remain bullish on pricing, citing healthy order books. Still, analysts expect that easier access to parts and stretched wallets will eventually bring auto prices back down. With energy, food and borrowing costs on the rise, consumers will think twice about splurging on a new set of wheels.
Net pricing for Volkswagen, BMW and Stellantis may drop 6.1%, 5.6% and 1.4% respectively this year, according to RBC Capital Markets. Mercedes may be the exception, with analyst Tom Narayan expecting the company to eke out 0.5% growth, he wrote in a report last month.
The German luxury-car maker has reaped huge benefits from focusing on its most expensive models even more so than its peers. The average price of a Mercedes climbed to around €72,900 ($77,485) last year, up 43% from 2019. That chimes with Ola Källenius's push upmarket with topend models like the S-Class sedan and the G-Wagon sport utility vehicle.
Downward pressure in the mass market looks clearer-cut. In Germany, several Volkswagen dealers have been rebelling against a new agency franchise system that Europe's biggest carmaker is introducing for its EVs. While dealers have no balance sheet risks because they're selling cars belonging to VW, they also get less flexibility to offer the rebates customers have been used to and are worried about losing them if prices won't come down.
Talk of an imminent full-blown price war is probably overblown. Tesla turned heads with its radical reductions in January, but it's long taken a unique approach to pricing, often changing them multiple times a year. While executives including General Motors CEO Mary Barra have sworn against going back to inventory levels they used to reach, don't discount the likelihood that manufacturers eventually will return to chasing volume and market share. Old habits die hard.
Citigroup cutting hundreds of jobs
Citigroup Inc. is cutting hundreds of jobs across the company, with the Wall Street giant's investment banking division among those affected.
The cuts amount to less than 1% of Citigroup's 240,000-person workforce, according to people familiar with the matter, who asked not to be named discussing personnel information. Staffers across the firm's operations and technology organization and U.S. mortgageunderwriting arm are also among those affected.
The routine cuts are part of Citigroup's normal business planning, the people said. There's been no broad mandate for managers to cut staffers; instead, various divisions have been grappling with different reasons for the cuts.
A spokeswoman for Citigroup declined to comment.
The move comes just weeks after rival JPMorgan Chase & Co. cut hundreds of mortgage employees. Goldman Sachs Group Inc., for its part, embarked on one of its biggest rounds of job cuts ever in January when it planned to eliminate thousands of positions across the company.
In the technology division, Citigroup has spent billions in recent years upgrading its underlying infrastructure. Chief Executive Officer Jane Fraser has long said those investments would ultimately allow the bank to reduce its reliance on manual processes.
In investment banking, on the other hand, the firm is grappling with an industrywide slowdown in deals.
Walmart to expand 28 stores with health care centers in 2024
Walmart plans to add more than two doze health care centers to some of its stores next year, as the retailer moves deeper into providing primary care and other services.
The company said Thursday that it will open 28 centers in 2024, mostly in Dallas and Houston. It also will expand into the Phoenix and
Kansas City, Missouri, areas.
The new centers will be built inside Walmart Supercenters and offer primary and dental care, and behavioral health and audiology help, among other services. Walmart currently runs 32 centers and is adding 17 this year in Florida.
A spokeswoman said the centers will serve patients of all ages. But Walmart also is working with the health care giant UnitedHealth Group to provide value-based care to some people with Medicare Advantage coverage.
Those are privately run versions of the federal government's Medicare program mostly for people aged 65 and older.
Value-based care is an approach to medicine that is growing popular with bill payers like the federal government. It essentially rewards doctors for keeping patients healthy instead of paying them for every service they perform.
The idea is to help patients stay on their medications, control chronic health problems such as diabetes and avoid hospital stays and other expensive care.
Ford focusing more on semi-autonomous features, tech staffers
Ford Motor Co. is forming a new unit to focus on semiautonomous features and is hiring about one-quarter of the workers from its former self-driving affiliate Argo AI.
The wholly owned subsidiary, known as Latitude AI, will be based in Pittsburgh, Argo's former home, according to a statement Thursday. The new unit will focus on “developing a hands-free, eyes-off-the-road automated driving system for millions of vehicles,” Ford said.
The automaker is hiring about 550 employees from Argo, the self-driving startup Ford and Volkswagen AG shut down in October. The workers will focus on technology such as BlueCruise, the automaker's hands-free driving feature that it says has logged more than 50 million miles of use.