Auto Industry News: Ford Market Value Up, Industry Sales Numbers Down, KOH 2022 Around the Corner, and Recalls Popping Up
We’re heading into 2022 with some exciting news on the racing front and some mixed news on the manufacturing front. Top of mind is the grueling 2022 King of the Hammers which takes place in Johnson Valley, California at the end of this month. On the OEM side, Ford’s made a couple of headlines this week, first for a driveshaft issue warranting a recall of more than 184,000 pickups. The manufacturer also shared some positive news that it surpassed its chief rival, GM with a market value of more than $83 billion.
Tesla, meanwhile, has its own share of headaches, revealing a recall of almost half a million cars for safety issues with rearview cameras and trunk latches. And, last but not least, year-end numbers of 2021 auto sales told us mostly what we were already expecting. Sales dipped because of dwindling supplies, but experts are hopeful inventories will slowly improve in 2022.
2022 King of the Hammers
The tail-end of January and most of February is a bleak time for those of us in colder climates as winter sets in and the nastier weather rears its head. But out in Johnson Valley, California, things will ramp up from Jan. 21-Feb. 5 as the 2022 King of the Hammers (KOH) turns the valley into a roaring wall of excitement. Like previous years, the 13th annual race turns a rugged desert area of roughly 500 acres into what racers and spectators refer to as Hammertown, chock full of UTVs ready to dig in the dirt.
Since its origin, KOH has continued to grow every year, with a sizeable turnout in 2020 that organizers said was the most significant event to date. Main gates open on Jan. 21, with qualifying rounds and the Toyo Tires Desert Challenge starting Jan. 29. Exciting events occur each night including the Holley EFI Shootout and Pit Crew Challenge, as well as Power Hours and live music, including Pennywise and Sublime.
Feb. 3 marks the beginning of the main attractions, with the Can-Am UTV King of the Hammers. Feb. 4 starts the popular 4WP Every Man Challenge, and Feb. 5 is the big kahuna: the 2022 King of the Hammers.
Registration for racers and spectators is currently open, and spectator tickets can be purchased in advance until Jan. 20.
Ford Recalling Over 184,000 F-150 Pickups for Faulty Driveshaft
Ford may have racked up sizeable reservations for its forthcoming F-150 Lightning pickup, but it’ll have to clear a different hurdle as the New Year starts. In a mid-December notice to the National Highway Traffic Administration, Ford said the underbody thermal/acoustic insulators on F-150s could loosen and make contact with the driveshaft, “resulting in marking or scoring of the driveshaft.”
Ford also said over time that the aluminum driveshaft could fracture from heat buildup or material thickness reduction.
“A fractured driveshaft may result in loss of motive power while driving, unintended vehicle movement while the vehicle is in park if the parking brake is not applied, and may result in secondary damage to surrounding components,” Ford said.
In short, the broken driveshaft can also reduce engine power and impair wheel movement, posing a serious accident risk.
Ford plans to send 184,698 recall notices to owners of affected 2021-2022 F-150 pickups. The automaker will mail notices to drivers starting on Jan. 31 and complete the notifications by Feb. 4.
Recall notices are never good news for an automaker.
Still, the timing of Ford’s driveshaft issues poses a headache for more than just existing F-150 owners. Since the recall affects model year 2022, the best-selling truck maker might have to delay deliveries of forthcoming models like the F-150 Raptor. The recall includes 4×4 pickup models with a 145-inch wheelbase and Crew Cab body style, like the Raptor.
The driveshaft recall also comes as a one-two punch since Ford is one of the many automakers already grappling with the microchip shortage. The automaker began implementing a “build-to-order” strategy in late 2021 to try and get around shortages by manufacturing its vehicles based on demand instead of simply trying to fill up dealer lots. So far the strategy has been profitable for the automaker, and CEO Jim Farley said he wanted to continue the practice after the chip supply returns to normal.
Ford Surpasses GM in Market Value
There might be some difficulties on the manufacturing front, but Ford’s still having a great year by the numbers. Early last week, Ford closed with a market cap of $83.962 billion, inching ahead of General Motors, which closed with $82.916. This is Ford’s first time surpassing GM since 2016.
A report by Barron’s pointed out that Ford’s stock rose 136% in 2021, contributing to the overall valuation. But Ford’s value dipped about 30% over the three preceding years in 2020, while GM gained 2% over the same period.
Electric Boost
Both companies had a solid 2021, most likely because of aggressive electric vehicle production plans. By late November, Ford said it wanted to bump up the production of EVs to 600,000 units for 2023. The automaker plans to spend upwards of $30 billion on developing its EV lineup. GM laid out similar goals, committing to a $35 billion investment in electric and autonomous vehicles. The company said it plans to roll out more than 30 electric vehicle models globally by 2025.
Even with high valuation numbers, both manufacturers are still lagging behind electric truck manufacturer Rivian. As of mid-November, the manufacturer was the biggest U.S. company by market value without any revenue. At that point, it closed at just over $104 billion. But more recently, Rivian sits at an estimated $88 billion valuation.
Even with EV startups posing stiff competition, Ford holds a strong position heading into the New Year. The Blue Oval rounded out 2021 with a three-month streak that positioned it as the best-selling automaker in the U.S., a stride it hadn’t hit since 1974.
Tesla Recalls More Than 475,000 Cars, Disables Game Feature
While Ford and GM duke it out for high valuation, the top contender on the market, Tesla, has its own share of recall and safety-related headaches lately. The automaker said it disabled its Passenger Play feature earlier this month after the U.S. National Highway Traffic Safety Administration (NHTSA) launched an investigation.
As part of the in-dash infotainment system, Tesla’s Passenger Play allowed passengers to play video games while vehicles were in motion. Despite the name, Passenger Play was considered a safety risk by NHTSA because it could distract drivers who try to multitask while driving. While the gameplay system asked a player to confirm they were a passenger, there wasn’t anything to actually block drivers from playing the game. At the time of Tesla’s announcement, it was disabling the gameplay feature while a car is in motion and NHTSA was investigating around 580,000 vehicles because of concerns over driver distraction.
NHTSA Scrutiny
The automaker was dealt another blow on Dec. 30, when it announced a recall of more than 475,000 Model 3 and Model S cars. According to NHTSA, the recalls address issues with the rearview camera and trunk that can increase crash risks. The recall range spans 2014-2021, including 356,309 2017-2020 Model 3 cars and 119,009 Model S vehicles.
On the Model 3 cars, NHTSA said the cable harness for the rearview camera could be damaged by opening and closing the trunk lid, preventing the rearview camera image from displaying. Meanwhile, the Model S recalls address a defect with the front hood latch that can open “without warning” and obstruct a driver’s view, posing a crash risk, the agency noted. Despite the massive recall, NHTSA said Tesla wasn’t aware of any crashes, injuries, or deaths related to either issue.
Both situations are not the first time Tesla has been in the hot seat with federal safety regulators. In August 2021, NHTSA said it was opening an investigation into the automaker’s autopilot system after 11 different crashes that resulted in 17 injuries and one death.
Cox Automotive: New Vehicle Sales Dip 32% in December 2021 vs. 2020
A year-end report by Cox Automotive found that new-vehicle sales for December 2021 dropped 32% when compared to December 2020, around 1.1 million units for the month. Cox said it expected the pace of auto sales for the month to finish near 11.4 million, down 30% from the 16.3 million sales pace in 2020. December 2021 is the slowest pace since May 2020, when the country was mostly shut down during the first wave of the COVID pandemic.
Not surprisingly, the dip in sales is mainly attributed to the overall shortage of vehicle supplies on the market, thanks to the ongoing chip shortage and other supply chain headaches. Cox said that auto sales totaled 8.35 million units for the first half of 2021, which left the auto industry struggling to restock inventories in the second half of the year.
“Total sales in the second half of 2021 were the slowest in a decade,” Cox Automotive Senior Economist Charlie Chesbrough said in the company’s report. Chesbrough added that while demand is still healthy for new vehicles, those supply and production issues hampered the auto industry and “you can’t sell what you don’t have.”
Slow Going on the Road Ahead
According to Cox, typically, new-vehicle inventory across the U.S. would be close to 3.5 million units, which gives buyers a broad set of choices and competitive prices. But inventory has been stifled at around 1 million units since August, limiting options and pushing prices up. Average transaction prices hit a record high in November for eight consecutive months. Cox estimated sales in the second half of 2021 will be closer to 6.59 million.
Despite the stagnancy, there’s hope that supply headaches will start to subside in 2022. Thomas King, president of the data and analytics division at J.D. Power, told Automotive News that retail stockpiles are gradually improving and tracking at more than 1 million monthly for the first time since July.
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