One Reason Average Car Prices Are Increasing Is Y’all Can’t Stop Buying Toyota Grand Highlanders, Things Of That Nature

It’s kind of a running joke with a friend of mine that everyone we know, or will ever know, owns a Toyota Grand Highlander. I recently drove the Lexus version and, yeah, I get it. I do. I might be able to talk you into buying a different three-row SUV, but I cannot talk you out of buying a Grand Highlander. It’s pretty good.

Inflation more than tripled in March (i.e. the monthly percentage increase in prices is three times what it was the month before), and you can probably guess the reason why: Energy. Has this yet led people to buy cheaper, more efficient cars? Of course not. Big trucks and SUVs are leading the way. An automaker that lacks both is Porsche, and it seems to be paying the price for it.

I know there’s been a lot of talk about China in The Morning Dump lately, so forgive me if I share a new story about the Chinese government telling battery companies to cool it on over-expansion. Ford is expanding on its campus, too, though it’s decided not to tear down what’s left of its development center.

CPI Up 0.9% Over February, ATP Up 3.5% Y-O-Y

I use this graphic all the time because it’s one of the better way to see what the state of the car industry is in the United States at any given moment:

For all the talk of making vehicles affordable, prices are still up by a large percentage year-over-year, though down a little bit from the brief moment where ATP went over $50,000. This March saw prices basically stable from February, but up 3.5% from last March. The average MSRP is above $50,000 and has been that way for a full year now.

At the same time, the Consumer Price Index rose dramatically by 0.9% in March. Here’s the Bureau of Labor Statistics explaining what happened:

The index for energy rose 10.9 percent in March, led by a 21.2-percent increase in the index for gasoline which accounted for nearly three quarters of the monthly all items increase. The shelter index also increased in March, rising 0.3 percent. The index for food was unchanged over the month as the index for food away from home rose 0.2 percent, while the index for food at home fell 0.2 percent.

Take energy costs out, and it’s not quite so dramatic. This is all a result of the War in Iran which is maybe over? You might assume that consumers would be rushing for affordable, efficient cars. That’s not quite what’s happening, as Cox Automotive’s Erin Keating explains:

“Despite higher fuel costs, U.S. consumers stayed focused on larger segments in March. Buying behavior does not change quickly, and most Americans have ridden the gas-price rollercoaster before. They know where the ride ends.

The numbers this month also show that the industry’s near-$50,000 ATP is reflective of a market that favors large, expensive vehicles. While affordable vehicles still exist, the demand continues to be concentrated in higher-priced segments.”

Because of the way oil works, fuel prices haven’t come down yet, and the actual outcome of the conflict is still uncertain. The consumers who can still afford cars like big trucks and big SUVs and, it seems, those buying habits aren’t going to be changed anytime soon.

Porsche Sees ‘Expected Decline’ In Sales

Whenever I see the new electric Porsche Macan I think to myself: That looks great. I don’t see them as often as I see the old gas-powered ones, though. That’s maybe a problem for Porsche, which saw a 15% decline in sales this quarter.

Don’t worry, according to the press release, this was “expected.”

“Following the end of the combustion-engined 718 and the strong deliveries of the fully electric Macan at market launch, our figures are below the prior‑year level but are overall in line with our expectations. Strong demand for the 911 and the high proportion of top derivatives clearly demonstrate that the core of our sports car brand remains exceptionally strong,” said Matthias Becker, Member of the Executive Board for Sales and Marketing at Porsche AG. “In the coming months, our focus will be on the market launch of the all‑electric Cayenne, which will be delivered to its first customers from summer onwards.”

Demand dropped 11% in North America and 21% in China, while rising about 4% in Germany. If there’s some positive news here it’s that the 911 saw a 22% year-over-year increase, because 911s rule.

Chinese Gov’t To Chinese Batterymakers: Chill Out

One of the aspects of China’s massive growth that needs to be mentioned alongside conversations about the country’s speed is that the country’s various industries have a bad habit of sometimes overreaching and creating massive overcapacity.

Lately, China’s government has been warning automakers and suppliers to maybe chill out a little and, according to Bloomberg, that the growing popularity of exports shouldn’t be met with backsliding into old habits:

Several government agencies, including the Ministry of Industry and Information Technology, called on 16 manufacturers of electric-vehicle and stationary batteries to step up efforts to improve product quality and safeguard intellectual property, as well as controlling growth.

The companies should “thoroughly understand the significance and urgency” of resisting unreasonable and improper competitive behavior, the ministry said in a statement after the meeting on Thursday. Promotional activities by local governments to attract investment in the sector should also be regulated, it said.

Battery makers’ shares surged on Friday. Industry giant Contemporary Amperex Technology Co. jumped as much as 7.4% on the mainland and 7% in Hong Kong in the afternoon session, while Gotion High-tech Co. and Shenzhen Xinyuren Technology Co. rallied by their respective daily limits.

It’s strange to say, but Chinese companies becoming more profitable is good for everyone. While lowering costs is positive for consumers, doing so in a way that irrationally deflates prices creates an unfair global market that’s bad for labor, trade, et cetera. Both China’s government and Western governments benefit from Chinese companies maturing in this regard.

Ford Will Keep The Development Center, Lose Shelby Way

Ford is in the middle of remaking its campus, and the plan was initially to demolish the old Ford Product Development Center in Dearborn. I guess that’s not happening now?

Per the Freep:

The automaker’s original master plan was to tear down the remaining part of the Product Development Center and construct a new building there as an extension to the new World Headquarters located next to it on Oakwood Boulevard. Then, the plan changed again, to tear it down to add a parking lot.

Ford’s leaders have once again had a change of heart. Ford will now keep that portion of the Product Development Center standing, but will completely gut it, renovate it and attach it to the new World Headquarters building through a skywalk.

One thing that is changing, though, is that Carroll Shelby Way is being turned into Raptor Way and Navigator Way. Here’s Ford talking to Nick Bunkley about what happened:

In addition, Village Road will change to Mustang Alley, and South Pond Road will change to Bronco Bend.

Ford transferred its longtime vanity address, One American Road, to the site during its headquarters move last fall.

At that time, “we took the opportunity to evaluate other campus roads, including Carroll Shelby Way,” a Ford Land spokesperson said in a statement to Automotive News. “Ford made the decision to rename several private roads to reflect iconic Ford products, as part of our broader strategy to infuse our employees’ work into our campus design. We are always evaluating additional opportunities to connect to our Ford history.

Ford still has Shelby’s name on a bunch of products, so this seems very much like a master-planning thing and not anything else.

What I’m Listening To While Writing TMD

KRS-One’s “Step Into A World (Rapture’s Delight)” is one of those songs that plays in the back of my head when it’s entirely silent. I’m not the run of the mill, cuz from the mill I don’t run.

The Big Question

What would be the funniest car exec or figure to name a street after?

Top photo: Toyota