The new car market is still booming but a bust may be on the way very soon. Oh, and Mitsubishi releases U.S. pricing for the new Mitsubishi Outlander PHEV. All this and more in today’s issue of The Morning Dump.
Welcome to The Morning Dump, bite-sized stories corralled into a single article for your morning perusal. If your morning coffee’s working a little too well, pull up a throne and have a gander at the best of the rest of yesterday.
New Car Market Still Hotter Than Venus
Did interest rate hikes do anything to cool down the new car market? It turns out, probably not. Reuters reports that the car market is still running red hot despite expected delivery increases.
“Transaction prices still rose and consumers spent more money on new vehicles this month,” said Thomas King, president of the data and analytics division at J.D. Power, adding auto sales are yet to see an impact from the ongoing monetary policy tightening by the U.S. Federal Reserve to curb inflation.
Retail sales of new vehicles this month are expected to reach 958,948 units, a 5.4% increase from September 2021.
September seasonally adjusted annualized rate for total new vehicle sales is expected to be 13.6 million units, up 1.5 million units from 2021, the report showed.
While this hot market might seem temporary, the reality might not suit everyone’s definition of temporary. We’re still expected to close out 2022 with a multi-million new vehicle deficit compared to pre-pandemic levels. This will likely have lasting effects on the car market for several years.
But Winter Is Coming
The new car market has to cool down eventually, and Automotive News reports that the industry analysts at Cox Automotive have a few predictions on when things might take a cold shower.
Cox Automotive on Wednesday cut its full-year new-vehicle sales outlook to 13.7 million — down more than 9 percent from 2021 and the lowest level in a decade.
It’s the third time this year Cox has lowered its sales forecast, which initially stood at 16 million vehicles.
Unlike previous cuts due to lack of supply, this one is a bit different. Cox Automotive cites weakening consumer sentiment as a key factor for downgrading its new car sales outlook.
Charlie Chesbrough, Cox Automotive senior economist, said COVID-related production disruptions and the war in Ukraine scuttled the anticipated improvement in inventories at the start of the year.
Now the industry faces a new wrinkle.
“It seems likely that much of the pent-up demand from limited supply is quickly disappearing as high interest rates eat away at vehicle buyers’ willingness and ability to purchase,” Chesbrough said.
Here’s where things get screwy: Despite the face value of Cox Automotive’s prediction of a year-over-year production decline, automakers are generally seeking to ramp up production. Hell, Reuters reports that BMW is still expecting sales growth in 2023. If demand is sufficiently reduced through future interest rate hikes, market conditions could shift back a touch to slightly favor the consumer. After all, supply-and-demand applies here, and increasing new vehicle supply just as the market cools off may bring incentives and rebates back onto the table.
Mitsubishi Announces Outlander PHEV Pricing
If you’re on the hunt for a three-row plug-in hybrid crossover, options are fairly slim. Thankfully, a new Mitsubishi Outlander PHEV is on the scene. It starts at $41,190 including a $1,345 freight charge. That’s not bad for a plug-in hybrid crossover with third-row jumpseats fit for very occasional use.
An electric motor at the front and another electric motor at the back provide full-time all-wheel-drive, while the whole system features a rather capable electric range of 38 miles. Combine that with range from the gasoline engine, and the Outlander PHEV can go a nice 420 miles on a full tank and full charge.
Unlike many plug-in hybrids, the new Outlander PHEV offers DC fast charging to juice up the battery pack in a jiffy. However, there is a caveat here. The Outlander PHEV uses a CHAdeMO plug which is rapidly fading from relevance as more and more automakers adopt CCS connectors.
I’ve driven the regular gasoline-powered Outlander and really quite enjoyed it. Based on the rather good Nissan Rogue, ride quality is quite comfortable and interior appointments are rather nice. I wouldn’t be surprised if the new Outlander PHEV is good enough to make competitors like the Toyota RAV4 Prime and Hyundai Tucson Plug-in nervous, especially once the benefit of a third row is factored in.
BMW Updates The Z4
The BMW Z4 is a car a lot of people forget about, which is a bit of a shame. While the last Z4 was far more beautiful than the current car, BMW’s roadster still holds a certain appeal. It’s getting some nice updates for 2023, although it’s best to classify this as a fairly light facelift.
For starters, the M Sport package previously optional on Z4 sDrive30i models is now standard. This means more aggressive bumpers, sports seats, alloy pedals, a nicer steering wheel, and a stitched faux-leather dashboard are now standard across the board. Not a bad little upgrade by any means. More importantly, the Z4 receives a nifty new set of honeycomb grilles, new aerodynamically-enhanced side vents, and subtly re-sculpted side skirts. Small details, but they make a difference.
In terms of available equipment, two very good new colors are on tap: Portimao Blue, and the 2-Series Coupe’s Thundernight. More purple cars, please. Oh, and the Z4 can now be had with blacked-out headlight housings that look quite smart. Perhaps more important than what you will find is what you won’t find; BMW’s new iDrive 8 infotainment system is nowhere to be seen. I’m a fan of sticking with iDrive 7, simply because the old system’s programmable hotkeys are brilliant.
In any case, pricing for the new Z4 sDrive30i starts at $53,795, while the six-cylinder Z4 M40i now starts at $66,295, both including a $995 freight charge. While the BMW Z4 is no Porsche 718 Boxster in terms of sharpness, the available inline-six has character, and pricing doesn’t seem out to lunch. Expect deliveries to start in November.
Whelp, time to drop the lid on today’s edition of The Morning Dump. Happy Thursday, everyone. The weekend is just around the corner. With the BMW Z4 getting some fantastic color options, I’m wondering if your car is a fun color. Whether green, blue, yellow, red, gold, purple, pink, or color-shifting, let’s hear it for your good colors.
Lead photo credit: yonkershonda, CC BY-SA 2.0
lifetime dd colors:
but it’s a festive black
Orange (Crush) 2021 Colorado Crew Cab Duramax Z71 4×4 (mine)
Red (Basque Red Pearl) 2019 CRV EX AWD (wife)
Red 1998 Z3 6cyl 5MT
Grey 2007 Honda Accord 4D EXL (18yo son – not for color, but it only has 10k mi on it)
After having 2 black trucks when I was young, I always try to buy something that is a “color”. Lots of reds, a few bright blues, a green, and orange. I hate monochromatic car colors!
Is black fun?
Red for the win.
First car: red 1963 Valiant convertible bought in 1971.
Second: Fiat 128 SL owned briefly before it rusted away.
Third: 2015 Fit EX bought new in 2014 after retirement and leaving NYC.
Outlier: Lime Gold Hornet Sportabout handed down from Dad when the Fiat fell apart.
Mitsubishi. God love you. For years so many people have predicted your demise and you just keep plugging away. Good for you.
BMW Z4. My God. It’s gorgeous! (Imitating Dick Solomon.)
I feel badly for people who need to buy cars now. I was crazy lucky. In December 2021 my wife got a Santa Cruz at 0%. In February 2022 I got a Mustang at 1.9%.
Colors? Mustang is Velocity Blue. First time I ever bought a car online. I wanted that color so I snagged it.
Just had to recognize the well used reference to 3rd Rock From the Sun here. I can hear John Lithgow right now.
Ford Fusion – Deep impact blue (really is a nice color, wife liked it)
BMW X3 – White (boring)
Kawasaki Vulcan 2000 – Majestic red
Isuzu Impulse – Light topaz metallic (looked gold and was a great color, didn’t show dirt and polished up beautifully)
Ford Mustang – Dark satin green (looked good but showed every scratch)
And then several shades of red on different cars. Didn’t necessarily want red but a color other than white or grey, and it seemed red was always what was available except when buying the ‘stang. At least the reds were muted and not bright, more maroon.
It’s just a shame there aren’t more color choices, but if people don’t buy them when they are offered, they stop offering them I suppose. Me? Anything but black, white, or grey. Literally have not bought a vehicle just because of that. X3 is white because it’s the one my wife wanted, go figure.
Funny, wife read over my shoulder as I posted, said that’s not maroon, those cars were burgundy! Well call me corrected! I’m married to a color snob or either I need to pick up a color wheel…
“New Car Market Still Hotter Than Venus” is a great headline.
My car is a burgundy, or “Basque Red Pearl” as Honda called it. Is it fun? Well it’s not drab at least. I did so love the BRG on my 2003 Mini when I had it. I would like a purple car at some point.
People could get 0% car loans not that long ago in the grand scheme of finance. Give it time and these sticker prices will have to come down just by attrition of who can even get the loan approved.
Interest rates pushing upward while producers try to ramp up production is the best possible scenario for getting out of this hellish market.
Dutchess Gold, white vinyl top – ’71 Coupe deVille
Black – ’15 Taurus SHO, ’18 Honda Clarity
Graphite Black (actually really dark navy blue) – ’01 BMW M3.
Cactus Grey – ’23 Ford Maverick (on order)
And I can’t spell Duchess correctly.
That is the correct spelling if you’re old enough.
My credit union is charging 6.5% for a 6-year car loan. ATP on a new car is $48k. So your monthly nut on an average car is >$700. Insurance on a new car isn’t cheap. Some sort of market shift will be forthcoming.
You’re monthly nut can be whatever you want it to be, as long as your initial nut (down payment) is big enough.
Who is taking a 6-year 6.5% loan who could afford a large down payment?
So bizarre that the Outlander PHEV even has level 3 charging – is the pack really big enough to warrant it? – but CHAdeMO is so slow (compared to CCS) that it can’t be *that* harmful to the battery. Really weird choice for them to not switch to CCS with the update.
I’m kind of hoping they’ll PHEV the Outlander Sport or bring the Eclipse Cross PHEV to the States (it’s available elsewhere). My wife will be looking to replace her Sport in a few years and we don’t need three rows, and the newest Tucson is pretty darn big compared to what she has now.
Current color collection:
Black – 96′ Miata
Red – 00′ Honda Insight (bright), 22′ Grand Cherokee (dark metallic)
Green – 95′ Audi S6 (dark metallic)
Blue – 01′ Viper (dark metallic w/Stripes)
I wish more companies would do greens whether it be bright as hell Lamborghini style or more subtle dark shades. Chrysler has several different shades of green on their fun products that look nice.
Seeing those forecasts relative to the pre-pandemic market always make me wonder if the multi-year disruption will meaningfully change consumption patterns.
I could see a couple of years of market adjustments and constrained supply and top trim first production could potentially condition people to be OK with longer cycles of ownership, particularly if finance is harder.
There was plenty of ink spilled about how manufacturers are no longer going to chase volume, after all. Of course that could all be nonsense and society will slip back into old habits at the earliest opportunity
My “Empire of Junk” includes the following colors:
White – 92 F-250, 94 Accord
Silver – 10 Mazda 5, 58 Austin Healey
Blue – 04 Impala Cop car, 77 BMW R75
Brown – 86 Vanagon