Auto Industry News: 2022 Ridler Award Winner Announced, Rivian Tackles Bad PR, Carvana Makes Bold Acquisition, and February Sales Numbers Unpacked

The auto industry continues to carry on with business as normal-as-possible, despite supply chain interruptions and growing conflict abroad. These tensions are evident in February sales numbers, which just landed last week. The Engine Block helps unpack the results, which present a mixed bag of good news, bad news, and just plain old news. Also making headlines is upstart Rivian, who is learning that running with the big dog automakers means tackling big dog problems, as well as Carvana who made a bold move in the world of used vehicles.

On the enthusiast front, custom car lovers got a treat this weekend as the Detroit Autorama returned to Motor City after being canceled last year due to COVID. Keep reading to learn who nabbed the coveted Ridler award.

Ridler Award Returns

More than 800 custom cars, trucks, and motorcycles were on display this weekend at the Detroit Autorama, serving up some stiff competition for the coveted Ridley Award. Named in honor of the show’s original public relations director, Don Ridler, the memorial award is one of the country’s most prestigious automotive awards. It recognizes exceptional creativity and comes with a welcome $10,000 prize purse.

This year’s winner certainly did not disappoint. The 2022 Ridler Award went to a gorgeous 1931 Chevrolet Independence owned by Rick & Patty Bird from Bellefonte, PA and built by Pro Comp Custom in Glenshaw, PA. “Sho Bird” was one of 30 cars competing for the prestigious award, during the 69th annual Meguiar’s Detroit Autorama.

Chopped five inches and featuring a stunning PPG Vibrance Wineberry and Orange Glow exterior finish, the ’31 Chevy wears a Shafiroff W-Series 509 Chevy V-8 with Nelson Racing Twin 72mm turbos. Other highlights include: a custom Hogan intake manifold, Holley water methanol injection, custom fabricated headers and exhaust system, and a custom fabricated chassis featuring a front four-bar with a chromed straight axle with cantilevered front suspension. Everything rides on Mickey Thompson Sportsman rubber wrapped around custom Billet Specialties wheels.

Learn more about the build and other Final 8 contenders HERE.

Hagerty Shakes Things Up

Speaking of Detroit car culture, collectible car insurer Hagerty announced last week it will move the Detroit Concours d’Elegance from its traditional summer date to Sept. 16-18. The event now overlaps with the North American International Auto Show (NAIAS), which will run Sept. 14-25 in downtown Detroit.

The two events coinciding might give organizers some logistical headaches, but should certainly spell extra excitement for show-goers. (Though, we expect parking will be a nightmare.) While NAIAS serves up the new and noteworthy with a glimpse at the future, Concours pays homage to the past and allows folks to appreciate the automobile’s history. Car lovers gain the best of both worlds, in the city whose heart pumps motor oil.

“Concours weekends are about championing the fact that all cars are cool and some of them are just jewels that need to be celebrated. This event will honor the tradition of the Concours, but also bring in new elements to provide on-ramps for future car lovers and families.” – McKeel Hagerty, CEO of Hagerty

Hagerty, in its recent quest to save car culture, has plans to completely retool the traditionally somewhat-stodgy affair. The weekend-long event will be held at venues throughout the city, and while exclusive receptions and celebratory dinners are still on the menu, so too are new vehicle showcases, ride & drive opportunities, and engaging seminars featuring design legends from the automotive industry and beyond.

On Saturday, the city will enjoy its first Cars & Community featuring Cars & Caffeine, RADwood and the always-entertaining Concours d’Lemons. Altogether, visitors will be able to enjoy both the finest examples of automotive excellence as well as some real head-scratchers.

Unpacking February Sales Results

February sales totals are in, and the results read a little like a game of Good News / Bad News.

First (and perhaps unsurprising to anyone with eyes), the seasonally adjusted U.S. auto sales rate dropped. It is now at 14.15 million, compared to January’s 15.2 million. (However, that number still exceeds the rates posted for the last five months of 2021.) Obvious reasons contributed to the decrease, including the global microchip shortage, supply chain issues, labor shortages, and inflation.

Zooming in, however, we see that Hyundai Motor America reported its best February retail sales ever, increasing 19% year over year. Sister brand KIA did well too, with its EV models having their best-ever monthly sales performance. The brand seems eager to ride that trend, as it just announced plans to launch 14 BEVs, including two(!) pickups by 2027.

Electric Interest Continues to Rise

Staying with EVs for a moment, Morgan Stanley data notes EV sales increased an impressive 34% last month, accounting for 2.6% of the market compared with 1.8% a year earlier.

Interestingly, Tesla is not a driver of that growth. According to Morgan Stanley, the EV-only brand’s share of U.S. electric vehicle market fell 12 percentage points year over year to 69% in February. Ford’s new Mustang Mach-E is credited with the disruption. The Blue Oval said it sold 3,739 of its new electric crossovers last month, with each one lasting an average of just four days on dealer lots.

Bye Bye Rebates

For those who purchased a new ride last month – whether ICE or EV – they undoubtedly noticed less discounts, rebates, and sales incentives. Motor Intelligence reports automakers spent $3,430 per vehicle on incentives last month, a number coming in 12% lower than a year ago. AutoNation CEO Mike Manley predicts this trend to continue, going so far as to tell Bloomberg News discounts on new cars may be a thing of the past.

“We will not return to excessively high inventory levels that depress new-vehicle margins. Significant discounting and high incentives can also damage a brand, which is another reason for our industry to balance appropriately supply and demand.” – AutoNation CEO Mike Manley

Hold On, Toyota

Toyota is going through it right now. After being crowned the top-selling automaker in 2021, the company saw major inventory problems last month. In fact, Toyota North America reported February 2022 U.S. sales of only 162,587 vehicles, down 11.2% on a volume basis. Feeding that problem was the company’s recent production slow-down of the new Tundra truck. Due to the ongoing chip crisis, production at Toyota’s San Antonio plant had to be cut from two shifts to one.

Adding insult to injury, the automaker had to halt production at 14 of its Japanese factories last week after a cyberattack – suspected to be the result of Russian hackers. According to the New York Times, “the stoppage followed a problem with computer systems at Kojima Industries, a manufacturer of automotive components, that disrupted the company’s ordering systems. The problem first appeared Saturday night, and the company decided to shut down its computer network to prevent the issue from spreading to customers, a company spokesman said.”

Unfortunately for Toyota, this closure comes on the heels of other temporary production halts at its domestic factories. In January, the automaker had to shut down 11 different assembly plants in Tokyo due to parts shortages resulting from very strict COVID-19 restrictions at supplier plants in China.

Rivian’s Very Bad, No Good Day

Speaking of automakers juggling challenges…

On Tuesday last week, Rivian announced a whopping price hike – 17% for its new R1T electric pickup and 20% on the electric R1S SUV, blaming inflationary pressures and higher component costs. Understandably, customers were not happy.

Many angry buyers publicly canceled their orders, with some even burning their welcome letters. (Yikes.) By Thursday, the company put out a letter apologizing for “breaking trust” with consumers and said prices still need to go up, but anyone who ordered before March 1 will have their original configured price honored. As a result, Rivian will lose money on every single R1T and R1S currently sitting on the order books.

Analysts don’t expect the bad PR to do much damage, especially since the company raised a comfortable $17 billion cash cushion with its IPO. Automotive News points out while the company has delivered relatively few vehicles — 920 as of Dec. 31, despite promising 1,200 — its listing in November was the sixth biggest in U.S. history.

The company also has considerable financial money behind it, including Amazon, T. Rowe Price, Ford Motor Co. and more recently, everyone’s friendly neighborhood billionaire George Soros. On Dec. 31, he bought nearly 20 million shares, making him among the most prominent investors in the company.

Expansion Headaches

Rivian is getting a taste of what it means to run with the big dogs – namely, bigger and more expensive problems.

The company is trying to build its second U.S. factory, this time in rural Rutledge, Georgia. Described as a quaint and tucked-away small town “virtually unchanged since the heyday of the railroad,” Rutledge’s residents are noticeably NOT on board with a big EV factory moving in.

While the 2,200-acre project would bring jobs to the area, locals argue the retiree-heavy population would not be able to reap those benefits. Plus, as local resident JoEllen Artz told GPB News, “There’s less than 20,000 people in our county. If they hire 7,500 people, that will be like, every day, bringing in a third of our county population.”

The influx of commuters – likely driving traditional ICE vehicles — would, quite ironically, create a lot of pollution, traffic, and litter.

The protestors may just stand a chance. A recent study from the Northeast Georgia Regional Commission found the Rivian development “generally inconsistent” with regional and county long-term development plans and cited potentially harmful effects on drinking water quality and adjacent wetlands, as well as possible damage to historic areas on the site, including a cemetery.

Politicians Elbowing In

Additionally, with a Georgia gubernatorial race on the schedule, the issue is growing political. Former Senator and governor-hopeful David Perdue has jumped on the cause. He opposes the plant and has shown no qualms about pointing fingers at his GOP primary opponent Gov. Brian Kemp, whose administration lured the EV maker to Georgia with promises of taxpayer-backed incentives. Those cost numbers still have not been released, though speculative reports estimate they will have taxpayers on the hook for at least $150 million.

“This bad deal is nothing more than a scheme by Kemp to promote himself in an election year at Georgians’ expense,” Perdue said in a statement. “Kemp thought he could get away with this under the guise of ‘economic development,’ but all he is doing here is selling us out and lining George Soros’s pockets.”

Billed as the largest economic development project in Georgia’s history, the $5 billion plant was slated to begin construction this summer 2022.

Carvana Makes Bold Move

Online used car retailer Carvana just purchased ADESA, the No. 2 auction company in the U.S., in a $2.2 billion cash deal. The acquisition is intended to expand Carvana’s customer reach with a broader selection of vehicles and faster delivery times, according to a press release. In fact, Carvana estimates the deal will allow it to recondition and prepare for sale an additional 2 million vehicles per year.

It’s a bold move, and one that stands to really shake up the wholesale auction market – which has long been dominated by ADESA and Cox Automotive’s Manheim. Automotive News points out that independent dealers who are selling at physical auction may not want to be selling their vehicles to a Carvana-owned auction, and may therefore defect to Manheim. Also, “The planned ADESA purchase would mean 78% of the U.S. population would be within 100 miles of a Carvana-owned site compared with 32% before the deal.”

“I think as a front-line retailer of cars, as a dealer, Carvana owning a wholesale platform … could create some channel conflict if they also own the auction piece of the value chain because they may have conflicting interests as both a wholesale buyer as well as a retailer. But that’s not for us to decide.” – CarGurus CEO Jason Trevisan

In addition to the purchase price, Carvana plans to spend $1 billion on upgrading the physical sites.

The Engine Block is your one-stop source for any and all auto industry news. Keep an eye on our weekly round-up of enthusiast coverage, product reviews, vehicle spotlights, auto show/expo features, and more. Be sure to check back Wednesday for a helpful breakdown of maintenance tips for those vehicles cresting 100,000 miles.