Used car buyers are going cheap, NHTSA loses its boss, Hino gets sued over emissions. 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.
Cheap Cars Are Back In High Demand
After nearly two years of unsustainable used car prices, it seems like we’ve reached a turning point in the marketplace. Between higher interest rates and inflation, Automotive News reports that used car shoppers are paying less and getting less.
“We’re seeing demand shift to lower price points,” Group 1 Automotive CEO Earl Hesterberg said late last month. That shift is happening most prominently among middle-class consumers and those buying mass-market brand and used vehicles, McHenry said.
Michigan dealer Aaron Zeigler called vehicles priced from $10,000 to $15,000 “the hottest part of the market right now.”
With used vehicle wholesale prices still massively elevated compared to pre-pandemic levels, this means consumers are demanding older vehicles. It’s their only way to get reasonably-priced wheels. Typically, consumers buy vehicles that are newer than their existing vehicles, in better condition than their existing vehicles, or fit their needs better than their existing vehicles. However, a decrease in buying power due to inflation seems to be negatively impacting typical late-model used vehicle demand, so it’s entirely possible that this price-conscious shift could have huge ramifications for the bottom end of the used car market. Either people are trading in some proper hoopties, or consumers are making more lateral moves and trading their old cars for newer, yet still old cars.
In addition, this shift could really affect dealerships who have been holding on to higher-value vehicles as unprecedented used car appreciation became normalized through 2021. Holding inventory that’s becoming less desirable is generally bad for margins, and it doesn’t help that vehicles in this recently-hot $10,000 to $15,000 range are very difficult to come by. “We would be selling a lot more if we could buy a lot more,” Hesterberg told Automotive News. “Like all used cars, they’re scarce, but the lower-priced used cars are the most scarce.”
In summation, the used car market is on a really bumpy path to close out 2022. Consumers are getting less for their money due to inflation and higher interest rates impacting buying power, dealerships are having a hard time finding affordable cars, and everyone is feeling the squeeze. On the bright side, it must be pretty great to be Mitsubishi right now, offering a brand new car with air conditioning for $15,975 including a $1,045 freight charge. Maybe we all just need Mitsubishi Mirages?
NHTSA Loses Its Boss Within Three Months Of Appointment
Change may be inevitable, but it can sometimes happen in an alarmingly short period of time. Reuters reports that NHTSA administrator Steven Cliff is stepping down from his position after less than three months in the administrator role.
Cliff is a former deputy executive officer at CARB and will become executive officer at CARB effective Sept. 12. He was the first Senate-confirmed NHTSA administrator since January 2017.
Transportation Secretary Pete Buttigieg said NHTSA’s chief counsel, Ann Carlson, will assume Cliff’s duties when he departs. Carlson was previously co-director of UCLA Law’s Emmett Institute on Climate Change and the Environment.
Cliff said in a statement he was honored to work with agency staff “on a series of measures that will make vehicles more fuel efficient and safer for all Americans.”
Short talent retention at the top isn’t a good look for NHTSA, especially when the administrator position was previously vacant for years. As of right now, we don’t really know who will fill the administrator role. Senate confirmation can take a long time and while Carlson is expected to assume duties, strong leadership can sometimes take more than mere duties. A figurehead definitely helps with public presence and NHTSA has been one of those back-of-mind government agencies for years in the eyes of the general public.
NHTSA Looks Into Reports Of Ford Fusion Braking System Failure
The last thing you’d expect in a modern car is a sudden reduction in stopping power. Brake line failure is one of those stereotypical evil henchman things you see in movies, but this cliché can prove very real indeed. Automotive News reports that a NHTSA probe has been opened into braking system failures on Ford Fusions and Lincoln MKZs.
NHTSA’s Office of Defects Investigation said it had received 50 complaints alleging such failures on Fusion and MKZ vehicles from the 2013-18 model years and was aware of one crash allegedly related to the issue.
Many of the complaints claim “the brake hoses are rupturing, leaking brake fluid and occurring with little to no warning,” according to a report released Friday.
Front brake hose ruptures and leaking brake fluid can result in increased stopping distances, the agency said.
Holy crap. While I’ve definitely heard of rubber brake hoses failing internally, ruptured hoses on late-model vehicles are incredibly concerning. Even on most seriously clapped-out shitboxes, brake hoses generally hold on for absolute ages. It’s not uncommon for rust belt vehicles to require new hard lines before new brake hoses are needed. While dual-circuit brakes help bring a vehicle to a stop should one line rupture, a sudden lack of braking power is a serious safety issue. Needless to say, we’ll be watching this story closely as a possible supplier-level defect might have farther-reaching consequences.
Hino Faces Class-Action Lawsuit Over Emissions Shenanigans
The saga of Hino continues. Earlier this month, a report came out in which the Japanese commercial vehicle manufacturer admitted to falsifying emissions records dating back to 2003. With that revelation out in the open, Hino opened the door for potential legal action, both in criminal and civil courts. While any criminal cases might take some time to launch, Reuters reports that Hino is facing a class-action lawsuit in America for its alleged emissions misdeeds.
The case, in the Southern District of Florida, has been filed on behalf of those who bought or leased 2004-2021 model year Hino trucks in the United States, the company said in a statement.
The complaint does not say how much the plaintiffs seek to recover but mentioned that the aggregate amount concerned exceeded a threshold of $5 million for the court to have jurisdiction, the company said.
While this class-action suit will take a while to work through the courts and likely end in a settlement, it marks a turning point for Hino’s emissions saga. This first case of civil litigation is likely only the tip of the iceberg, and Hino could experience more legal exposure. If you want to read a bit more about the circumstances that led to nearly two decades of emissions lies, click this link to read a report from a previous Morning Dump.
Whelp, time to drop the lid on today’s edition of The Morning Dump. We’re getting back into weekday mode after the Autopian’s car show in Los Angeles, and what an exciting week it is. Before we get to some of the stuff you’ll see later this week, I’d love to ask you a question. Where do you want us to hold a car show next? The Lane Motor Museum and the Detroit auto show are logical next steps, but I’d love to know if there are any awesome regions we might be forgetting about.
Lead photo credit: Toyota