Yahoo Autos Stellantis Says Auto Loans Are Getting Longer as Demand Remains High
Stellantis has also noticed that average new vehicle financing terms are getting longer, GM’s electric cargo vans are proving somewhat popular, and a never-ending tire trade secret scandal has swung back in Goodyear’s favor. All that and more in this edition of The Morning Shift for April 4, 2023.
1st Gear: In the Future, You’ll Never Stop Paying Off Your Car
As interest rates increase and cars get more expensive, buyers end up agreeing to ever-longer financing terms just to make those monthly payments bearable. We know that 84-month loans — that’s seven years, to put it in the most miserable way possible — are here to stay, and Stellantis this week backed that up with findings of its own. Via Reuters:
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Stellantis is seeing clients seeking longer-term financing and leasing deals for their vehicles as a consequence of higher global interest rates, the carmaker’s head for the business said.
Chief Affiliates Officer Philippe de Rovira said loans which normally had a three-year maturity were now increasingly moved to four years. “This allows customers to get a car for a monthly instalment that is similar to that they had before,” he said.
Four-year agreements are the new three-year terms, at least based on what the company is observing in Europe. The good news is that de Rovira does not foresee prices continuing to increase as they have, because the market couldn’t sustain it. The bad news is they’re also not coming down anytime soon, because “demand is not our issue,” in the executive’s words.
De Rovira said Stellantis was not seeing a downward trend in vehicle pricing.
“Probably the significant price increases we have seen in 2021 and 2022 will not be repeated because the context is changing, but for the moment we don’t see decreases, we see stabilisation”.
It’s interesting looking at the gamut of new cars available now and knowing deep in my bones that I will never be able to purchase a new car again. My Fiesta is going to have to last me forever.
2nd Gear: Let’s Check in With BrightDrop
It’s been a while since we’ve heard news from General Motors’ BrightDrop, the manufacturer’s commercial electric cargo van division. BrightDrop is still very much still around, and just sold out of all its 2023 model-year Zevo 600 vans thanks to a 4,000-unit order from Ryder, a logistics company. From Automotive News:
Transportation and logistics company Ryder System Inc. on Monday said it was buying 4,000 electric delivery vans from General Motors’ BrightDrop commercial vehicle unit over the next three years for use in its lease and rental fleets.
As a result of that and other deals, BrightDrop said it has now sold out of its Zevo 600 van for the 2023 model year. It did not disclose the number of vans it will produce for 2023 but said it was now taking reservations for 2024 vehicles, with deliveries expected to begin in the middle of this year.
Ryder said it planned to add the Zevo 600 and smaller Zevo 400 to its lease and rental operations through 2025. The first 200 vans will be ordered this year, the company said. Ryder said 2023 Zevo 600 vans will be rented to customers in California, New York City and the Dallas area this year, while 2024 Zevo 600 and Zevo 400 vans will be available as soon as this summer.
The company just shipped its first 500 vans out of its CAMI Assembly plant in Ontario, Canada, per Detroit News. Its other clients include FedEx, Walmart, Hertz, and DHL. Those are pretty big names, so don’t worry about BrightDrop. In this case, no news has been good news.
3rd Gear: United Auto Workers Membership on the Rise
By a modest three percent, as it turns out. Once again per Automotive News:
UAW membership rose about 3 percent last year to just over 383,000, according to an annual financial report filed by the union.
“We’re just getting started,” said UAW President Shawn Fain, referring to the membership increase.
The LM-2 report, filed with the Department of Labor late last week, compares union membership as of December 2022 to the same period a year earlier. The UAW reported membership of 372,254 at the end of 2021, a year when membership dropped 6 percent.
The union reported net assets of $1.04 billion after about $84 million in liabilities at the end of the reporting period.
Former President Ray Curry, who recently lost a close election to Fain, received $267,126 in compensation last year. Former Secretary-Treasurer Frank Stuglin made the most among the union’s International Executive Board members with compensation of $311,390.
Fain, who was an administrative assistant in the Stellantis department before becoming president, received $160,130, the filing showed.
This of course comes shortly after the conclusion of a hard-fought election for UAW president between Fain and incumbent Ray Curry. Curry briefly cried a breakdown in the voting process — because that’s just what you do when you lose an election now — before inevitably conceding.
