Auto Industry News: April Sales Down, Auto Thefts Up, & Crossovers Crowding the Market

With Q1 firmly in the rearview, the auto industry has a clearer look of the year ahead. Unfortunately, the road is looking a little bumpy…

The outlook for new vehicle sales remains dismal, though it’s certainly not for lack of demand. Microchip shortages pushed automakers to cut another 33,000 vehicles from their global production plans, making consumers even hungrier to get their hands on a new ride. Those who have sticky fingers seem to be simply helping themselves. Crime stats show car thefts, as well as catalytic converter thefts, surged in the past few months. Also on the rise? Mergers and acquisitions deals, car accidents, and auto loan interest rates.

Despite the challenges, automakers keep rollin’ out flashy new models. GM announced an electric Corvette is on its way, while Dodge plans to resurrect the Hornet as a plug-in hybrid crossover. Across town, Ford celebrated first deliveries of the new F-150 Lightning.

Keep reading for more insight on these reports, as well as additional news regarding April market trends, America’s appetite for crossovers, and self-driving buses!

Q1 Takeaways & April Snapshot

With first quarter results now inked in the industry ledgers, it’s easier to map out the possible year ahead. Q1 sales totals came in nearly 16% lower than 2021, at a meager 3.3 million. The microchip shortage is largely to blame, but COVID shutdowns in China, a significant earthquake in Japan, and the ongoing Russia-Ukraine conflict did their own damage to supply chains as well. New yearly sales forecasts now hover somewhere around 15 million.

Auto execs say they expect the microchip shortage to last throughout the year, though Q3 and Q4 should see some improvement. Other predictions include higher interest rates, increased insurance premiums, and more sticker shock as far as finances go. As for the vehicles themselves? All signs point to EVs and hybrids outpacing industry growth. Indeed, Q1 EV sales were up 76% from last year.

April Overview

U.S. auto sales for April followed Q1 downward trends. JD Power expects new-vehicle sales to reach 1,076,200 units, a 23% decrease compared with April 2021. Prices continue to set records though, reaching $45,232 in April, an 18.7% increase from a year ago.

According to Cox Automotive, metrics for April show several other ups and downs, too.

Up? Consumer spending (particularly on services, rather than goods); income growth (healthy, though not quite keeping pace with current spending rates); and inflation (hit the highest year-over-year change since January 1982).

Down? Economic growth (caused mostly by net exports and declining inventories); unemployment claims (dropped to their lowest level since February 1970); and home sales (tight supply, record prices, and surging mortgage rates are taking a toll).

Consumer sentiment also slipped, leaving confidence down 8.7% from a year ago. However, future expectations improved, indicating many people are adopting a glass-half-full outlook.

One area of the industry increasing drastically is mergers and acquisitions. During Q1 2022, total value reached $6.4 billion value in 35 M&A deals. That’s 52.17% more deal activity than Q4 2021, with the dollar value marking an increase of 3353.1%. The top deal belonged to Cummins, who spent $3.7 billion to acquire commercial vehicle manufacturer Meritor. Behind them was GM’s $2.1 billion acquisition of self-driving tech company Cruise.

Speaking of self-driving tech…

The UK’s first full-sized driverless bus began road testing in Scotland last week. During the two-week trial, the bus will travel a 14-mile route between Edinburgh and Fife. The goal is to begin carrying passengers as early as this summer.

What’s Mine Is Yours?

In more alarming news, it appears car thefts are on the rise in certain parts of the country.

Washington state reported an incredible 88% spike in thefts compared to last year. Law enforcement blame recent police reform laws that prohibit them from pursuing a fleeing suspect.

Similar restrictions enacted last year in New Jersey are thought to be behind that state’s increase in vehicle thefts, as well – up 37% this year. However, last week, New Jersey’s acting attorney general Matt Platkin reversed the limit on vehicle pursuits in an effort to combat the rise in crime. The state also plans to invest $10 million of federal American Rescue Plan funds to purchase automatic license plate reader technology.

In Washington, similar attempts to ease restrictions around high-speed pursuits went through the state Senate but failed to get the necessary support.

Nationwide Problem

While certain states have it bad, the National Insurance Crime Bureau (NICB) says vehicle thefts are up across the country. The bureau reported car thefts nationwide increased by 16.5% in 2021 compared to 2019 and nearly 29% compared to 2017. Much more violent car jackings also rose, with many large cities like NYC, Philadelphia, Chicago, and Washington D.C. seeing triple digital increases.

NICB stats reveal full-size pickups from Ford and Chevy, as well as older Honda Civic and Accord cars, are the most popular targets. Generally, thieves will target older models to get around anti-theft technology. However, just as many (if not more) take advantage of car owners who naively leave their car fobs in the cup holder or the engine running while they pop into a store.

Hold On Tight

Those enterprising criminals who feel stealing an entire vehicle is too much work might be eyeing up your car’s catalytic converter. NICB reports those thefts are up too — a whopping 325% nationwide between 2019 and 2020.

Rich in rare metals like palladium and rhodium, catalytic converters can fetch a high price on the black market. Hybrid cars seem to be at particular risk, as they have more valuable metals. Pickups and SUVs are commonly targeted too, because it is easier for thieves to shimmy underneath them and slice into the exhaust system.

According to Progressive, if you have comprehensive coverage on your auto insurance policy, then you’re typically covered against catalytic converter theft. Otherwise, you could be facing a big expense to replace the part – and repair any damage incurred during its removal.

Have you noticed…?

Car accidents, pedestrian fatalities, and overall reckless driving are up compared to pre-pandemic levels. In a recent Nationwide Insurance survey, 81% of respondents said they think drivers are more aggressive compared to 2020. Perhaps more unsettling, though? 34% believe it is safe to hold your phone while driving! Be careful out there, folks.

Crossover Fever

While pickups still dominate U.S. car sales, crossovers continue their slow ascent to the top of the charts. According to SEMA, these compact utes are the fastest-selling type of vehicle in the United States, accounting for 45% of passenger vehicles sold in 2021. They are also the most common type of vehicle on the road, accounting for almost one in four vehicles on the road. In fact, a recent ISeeCars analysis found that the current fastest-selling ride on the market – with an average 7.6 days on dealer lots – is the Honda CR-V.

More than 170 crossover models are projected to be sold from 2022-2028. Here are a few new ones coming up that caught our attention.

Dodge Hornet

Expected to land sometime in mid-August, the Dodge Hornet will resurrect an old badge for a new platform. The upcoming small crossover will join two muscle cars and a three-row SUV in the Dodge lineup, filling a gap for the automaker. Details are sparse, but rumors suggest the model will share much of its construction with the recently introduced Alfa Romeo Tonale. The Tonale offers a 256-hp turbocharged four-cylinder or a 272-hp plug-in hybrid electric powertrain.

The original Hornet was a compact car built by AMC from 1970 to 1977. Available in two- and four-door sedan, station wagon, and hatchback coupe configurations, the model was a best-seller for the automaker until it was phased out for the more luxurious Concord. When Chrysler purchased AMC in ’87, it acquired the vehicle’s rights. A compact SUV Hornet concept made the auto show rounds in 2006, but the 2009 financial crisis and the restructuring of the Chrysler Group squashed any attempt to put it into production.

Fiat Pulse

In the U.S., Fiat’s line-up only includes the 500X – an attractive crossover which hit the market back in 2015 as a 2016 model-year vehicle. However, a new small CUV from the manufacturer hits Mexico next June, and it’s easy to see how the Fiat Pulse could have potential in an American market as well.

Stylish, affordable, and built to handle urban environments, the Pulse falls into a similar category as the Nissan Kicks or Kia Seltos. While Nissan’s offering didn’t land exceptionally well, offering customers a host of engine, fuel system, and visibility issues, the Seltos fared better. The vehicle solicited many positive reviews and good sales, proving the subcompact segment is alive and well in the states.

The Detroit Bureau reports that the Pulse will enter the Mexican market with a 93-hp 1.3-liter four-cylinder engine, paired to either a 5-speed manual transmission or a CVT automatic. An upgraded 125-hp 1.3-liter turbo 3-cylinder is under consideration. With a comfortable interior, well-appointed safety equipment, and low price tag, we agree it would make an “interesting addition” to the Fiat lineup in the U.S. where affordable transportation is a dying breed.

Did you know…?

Ford celebrated delivery of the electric F-150 Lightning to its first customers last week. New research from Cox Automotive reveals the majority of Ford’s orders for the Lightning come from consumers who have not owned a Ford – much less a Ford truck! According to the data, electric pickups are cracking open an entirely new target audience: Consumers under the age of 35 who currently own an SUV or sedan – particularly, “higher-income, tech-savvy males who are considering an electrified truck because of high gas prices or environmental reasons.”

Carvana’s Conflict of Interest

A giant online used retailer scooping up the U.S.’s No. 2 auction house in a $2.2 billion cash deal? It struck us as odd too when we reported the purchase back in March. At the time, we speculated dealers might not be too keen to use a service owned by their competitor, choosing instead to do business with Manheim. It now appears the wind is indeed blowing in that direction.

Automotive News reported last week that the pending deal prompted “some automakers and dealers to rethink or sever their relationship” with ADESA. The publication heard rumors that seven automakers jumped ship, but so far only confirmed one: Toyota Financial Services.

Shortly after that news broke, The Wall Street Journal reported that Carvana was struggling to the sell bonds which would fund the acquisition. Apparently, after showing disappointing Q1 earnings, the retailer had difficulty attracting investors. Interestingly, giant investment firm Apollo Global Management threw them a lifeline, agreeing to buy $1.6 billion (or roughly half) of the junk bonds and salvaging the deal.

However you get it done gets it done, I guess, but this seems like a fragile way to build a business relationship.

GM Confirms Electric Corvette

Last but certainly not least in important news, GM President Mark Reuss confirmed the automaker will launch an electric Corvette starting next year.

First iterations will likely be standard or plug-in hybrids and not yet full EVs, which could arrive as soon as 2025. As contributing writer Richard Truett noted over at Automotive News, developing an electric Corvette that can keep the current model’s “sexy 0-60 time and impressive 444-mile cruising range” will be very challenging for engineers. Aerodynamics and weight distribution will need to accommodate beefy battery packs – for which there is already very little space.

The endeavor will require a huge investment of time, money, and creative bandwidth. As a result, Truett says it’s a safe bet the Corvette will become a family of vehicles. And, yes, that likely means we’ll be seeing a Corvette SUV somewhere down the road.

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 history lesson on the iconic Ford Mustang, and check in on Friday for a helpful guide on prepping for a successful car show.