Carmakers and dealers are making more money by selling fewer vehicles at higher prices, and this could be a long-term shift for the American auto industry.
Driving the news:
By the numbers:
The big picture:
The supply chain recovery story, which is primarily focused on semiconductor availability, may obscure the reality that the auto industry may never return to its pre-crisis patterns. Instead, we may be witnessing the emergence of a new business model that emphasises lower production levels, higher prices, and wider profit margins.
What they're saying:
It works well for automakers and dealers, said Michelle Krebs, a Cox Automotive analyst. They are not going to rush back to the old way of doing things. In fact, we don't think we'll ever return.
Consumers are one group that is likely to be dissatisfied with the new status quo. In June, the average transaction price for a new car was $48,000.
The bottom line:
The new car market has truly evolved into a luxury market, Krebs says. A lot of Americans have opted out.
Robot orders increased last year compared to the year before by 67%. Additionally, one out of every two industrial robots sold internationally, according to the International Federation of Robotics, is purchased by US automakers.More