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.
Used Car Wholesale Values Continue Slow Decline
It’s early in a new month, which means it’s time to check the Manheim used car wholesale value index to see if used car values are dropping. Sure enough, the slide continues through September, with seasonally-adjusted average used car wholesale values declining three percent month-over-month and one tenth of a percent year-over-year, enough for Manheim to call it a “large decline.” From the company’s report referencing its MMR values, which are its expected vehicle values (think of it a bit like Kelley Blue Book for wholesale units): Sales conversion rate is a fairly simple figure obtained by dividing sales by number of potential customers. A lower conversion rate means that buyers are more readily walking on used cars, often due to factors like better options in the marketplace. However, not all types of cars saw a year-over-year decline in value. The report goes on: To cook up the used Vehicle Value Index, Manheim takes all the cars it puts through auction, finds mean transaction prices, eliminates outliers, then adjusts for mileage, season, and vehicle mix to come up with a single figure meant to represent overall used vehicle value. The index doesn’t translate perfectly to retail prices, but it’s a great indicator of overall trends in the used car marketplace due to the sheer number of car sold through wholesale auctions. While the index remained steadily between 135.4 and 139.6 for the first few months of 2020, it shot up like a firework starting in June of 2020, hitting peak silliness in January by topping out at 236.3. As of the end of September, the index sits at 204.5, down from 210.8 in August and just slightly down from 204.8 last September. According to Manheim, some of this slackening of the used car market can likely be attributed to stronger year-over-year new vehicle sales. SAAR stands for seasonally adjusted annualized rate, or roughly the number of cars expected to be sold in a calendar year. While it’ll take a long time for used car values to return to anything resembling normal, it’s encouraging for buyers to see a steady trot back down the mountain. At the same time, if you’re looking to dump a vehicle, now might be the best time to do it. Barring any crisis, it seems that depreciation is well and truly back.
Audi Considers Its First American Assembly Plant
The Inflation Reduction Act’s updated EV tax credit program strikes again. Automotive News reports that Audi is considering American assembly to qualify for electric vehicle tax credits. Some Audi models may be easier to build in America than others. The Q4 e-tron rides on the same MEB platform as the Volkswagen ID.4, and that Volkswagen is now built in Chattanooga, Tenn. However, the midsize e-tron crossover rides on the MLB platform and the e-tron GT is on the same J1 platform as the Porsche Taycan, so neither of those even have platform mates built in existing American facilities. “To be honest, we are looking right and left: What can be the opportunity for us to get together with a strong [Volkswagen Group] in the background,” said Hoffman, speaking from Audi’s design center in Malibu, Calif. “And now we are on the way, especially as the rules changed and as you know there is big spending of the government for EVs, with special circumstances, and we are looking forward to how we can meet these requirements.”
Stellantis Still Smells
While most new car assembly plants are fairly clean, not all are easy to live with. The Detroit News reports that Stellantis’ Mack Avenue plant has been under fire six times in roughly 13 months for air quality violations, most recently requiring an explanation of air pollution by Oct. 14. The Mack Avenue complex, once known for building Vipers, now builds the Jeep Grand Cherokee. For the sake of area residents, Stellantis better fix this noxious odor business now. The company’s had five chances already, what will it actually take to get it right? The investigation was prompted by reports of “nuisance odors,” a persistent complaint of some residents who live near the facility on Saint Jean Street. “Stellantis has been implementing corrective actions related to our Mack Assembly Plant as submitted to EGLE earlier this year,” company spokesperson Jodi Tinson said in a statement Friday. “We are investigating this recent incident and will work with EGLE to address this issue in a timely manner.”
Renault And Nissan Might Shuffle Equity
While Renault and Nissan have been in a cozy alliance for quite some time now, it’s not always been easy or steady. The latest development is Reuters reporting that Nissan wants Renault to own less of the Japanese company. So what effect would Renault reducing its stake in Nissan have? Well, it could give Renault a liquidity injection that might be needed given the rocky European economy. It could also give Nissan the opportunity to raise funds elsewhere and carry a bigger stick in the Renault Nissan Mitsubishi Alliance. For now though, we’ll have to wait and see if and how this all plays out. Renault owns about 43% of Nissan, which wants its French ally to wind down the stake to 15%, drawing level with Nissan’s share in the alliance partner, the source said. The stake sale would not affect their business alliance and Nissan may need to raise funds to buy the shares back from Renault, the source added.
The Flush
Whelp, time to drop the lid on another edition of The Morning Dump. It’s Monday, so why don’t we play a little game? If you were given $5,000 to buy a car today, what would you get?
Lead photo credit: David Hilowitz is licensed under CC BY 2.0.
But if I had to use it on another vehicle I’d use it to buy a older 4×4 small truck like a hardbody nissan, 720, Toyota, or S10/S15
https://portland.craigslist.org/grg/cto/7539773867.html
So after doing some checking, if I had to buy a car right now, what I’d likely get this 2006 Suzuki Aerio for only CAD$2750: https://www.autotrader.ca/a/suzuki/aerio/markham/ontario/19_11473409_
This Mazda 3 https://www.autotrader.ca/a/mazda/mazda3/toronto/ontario/5_56285780_on20080123125632757
And this Hyundai Elantra Touring https://www.autotrader.ca/a/hyundai/elantra%20touring/mississauga/ontario/5_53934826_on20080206115602773
Now $4100 according to the chat.
I’d budget for 4 new ignition coils, a new VANOS actuator solenoid, both high and low pressure fuel pumps, and for a new timing chain and tensioner. Front wheel bearings, too.
These things are a blast to drive, even with the automatic, but the little engine in there has known issues with excess slack in timing chain as they age. The tensioners are often weak, which causes excess wear in the chain, which is a little weak to begin with. Even slight unexpected timing changes will cause misfires and air management fault codes in any BMW engine.
This is one example of where “superior” German engineering results in worse engine life. A timing belt would do just as well or better, but wouldn’t be expected to last the life of the engine. Further, it would be designed for relatively easy replacement.
Occasionally, the misfire is caused by a crack in one the the plastic intake components, or a faulty EGR valve, but always budget for worse and be pleasantly surprised when you’re lucky.
In a Mini old enough to buy for $5,000, I’d still replace the timing chain no later than every 120k miles. The ignition coils are also a known weakness; have a new set in the trunk ready on any road trips because they’ll start to fail at about 120k miles, too.
If I have to replace MegaVan … That’s a tougher proposition. Not many usable large vans under $5k so I’d probably go with a Cadillac Fleetwood Limo from 93-96.
I could live this as well: https://delaware.craigslist.org/cto/d/wilmington-2003-saturn-low-miles/7543598403.html
Also Detroit: Hey, the people living 90 feet from your 2.5 million square foot assembly plant are complaining it makes noise and emits “nuisance odors” What the hell are you going to do about it? This is an outrage!
I’ve been looking at a new (used) car, and it’s really only been $10k Cadillacs. There is not much in the $5k range I’d be interested in. Everything else is also in the $10k+ range. I think my tastes have gone up with my age. It’s hard choosing a car with poor crash possibilities at this point in life.
I don’t know, maybe this answer is the obvious one… MIATA? After a quick check, it’s either ’06 or older Mustang, Pontiac Solstice, or Honda Element.
Another possibility: 1st generation Honda Insight with a failed battery. I’d totally convert that to electric.
There are any number of drivetrain-free shells available sub $5k, and zero chance you’ll be under $5k after any BEV swap.
A 300 horsepower electric Honda Insight with a Tesla Model 3 drivetrain could have acceleration and top speed performance bordering on that of a hypercar. There are a lot of choices that would take twice as much power to do that.
