GM announces return to the medium duty truck market

Posted by in Auto Industry

GM Medium Duty TrucksGM recently announced it will begin manufacturing its medium duty truck. Manufacturing ceased as part of their declaration of bankruptcy. In the ensuing years they have focused on their sedan, light duty and light SUV vehicles while maintaining their commercial line of vehicles too. The return to building the medium duty truck is coming on the tail end of reports of a trend back towards less fuel efficient vehicles. Reports showed a solid increase of 1 percent in sales of light duty trucks between 2012 and 2013 alone according to Swan River’s Key Chevrolet Buick GMC Inc.. There are many reasons insiders are crediting for the trend, but GM’s decision to return to medium duty trucks has watchers excited, and cautious.

 

What’s been swinging the consumer back to heavier trucks?

Industry analysts point to a convergence of factors that by themselves would have not have been enough to overcome consumer reluctance to invest in heavier, more expensive and less fuel efficient vehicles. The falling gas prices are one of the more influential factors. With gas prices trending at their lowest since 2007, and staying at a low stable rate – consumers are not as conscious of prices at the pump. The economy has also recovered in a manner that sees more people looking to invest in vehicles (with better tires) that will last longer and do more. Even with the shift back towards urban areas, the decrease in commute time also begins to make medium duty trucks look more attractive. Insiders also say that the effects of El Nino cannot be ignored. With areas experiencing some of the heaviest winter weather they have seen in decades, heavier vehicles are starting to be perceived as a necessity.

 

Can GM expand their manufacturing without running into trouble?

This is the question that has the market cautious about the news. While there was a positive upswing in the stock value upon the announcement it was not the leap that the industry would have predicted. There is too much unknown about the long term effects of the recent downturn on future buying habits to see making a leap back towards what was seem like a solid idea. Worries about the state of the economy, and the stability of gas prices are compounded with the trend of Millennials towards city living and ride sharing. They will be the demographic that determines the shape of the auto industry within 10 years and GM’s move may not be as well thought out as it seems today.

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Lower gas prices may end the rise of fuel economy

Posted by in Economy

gas guzzling SUVsSince 2007 American cars, trucks and SUVs have been experiencing an upward trend in fuel economy. The light duty pickup and SUV have remained popular with consumers, in part because they can deliver transportation capabilities with an increased fuel efficiency over medium and heavy duty trucks. The increase use of hybrid fuel technologies have allowed the SUV market to keep pace with consumer demand for more efficient cars, and the influx of hybrid sedans and compact cars have also shown car manufacturers that economy is a priority with owners. On the average, fuel economy has risen by 5mpg across all types of vehicles. This has resulted in less carbon emissions and stronger sales for vehicles in a weaker economy. That trend may be coming to an end. With GM’s recent announcement that it is returning to medium duty truck manufacturing, after lawyer cases, a vehicle abandoned during their bankruptcy and not wanted by consumers experts fear that fuel economy and greener transportation are about to fall off the radar for consumers.

 

Lower gas prices mean fewer consumers are paying attention to consumption

Gas prices have been heading downward steadily over the past few years. While there was still a slight rise in sales of light trucks between 2012 and 2013, there was also a noticeable rise in medium, heavy and heavy SUV sales. That is something the market hasn’t seen since 2007 when gas prices peaked and the economy tanked. As gas becomes cheaper, it is becoming less important for consumers to feel they are driving a fuel efficient vehicle. The lack of the daily drain on many a wallet is putting luxury and capability back at the top of the list for qualities in a new vehicle for the average consumer.

 

While this may revive some manufacturers, the fear is the effect is temporary

fuel economyGiven that the nature of gas prices is to go down and up in cycles, a combination of an economic downturn and a rise in gas prices could cause problems to automakers again. Only this time, industry insiders warn, there will be a broader impact on the economy. In order to resurrect manufacturing of larger, less fuel efficient cars automakers are seeking more loans – loans similar to what consumers are now seeking to purchase these vehicles. If the same collision of factors occurs as it did in 2007, the nation could feel it immediately in its ability to transport itself and its goods. That could make the housing bubble look like a walk in the park. There are bills under consideration to mandate fuel economy, but they don’t look strong enough in the committees to make an impact. It will be the job of advocates to keep consumer awareness about the importance of fuel economy in the spotlight – but they will be up against an auto lobby with a lot at stake when it comes to the sale of larger vehicles.

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Are Millennials changing the car industry?

Posted by in Auto Industry

Recent reports have shown an uptick in the purchase of power cars and a return to less fuel efficient models of trucks and SUVs. While this is being reported as a boon to the auto industry, combined with the announcement that GM is returning to making medium duty trucks, all eyes have been on the recent surveys about the driving habits of Millennials. This demographic has been behind the success of start-ups like Uber and Lyft, but they still aren’t within the age bracket that represents investment purchases. While the auto industry and used cars Richmond BC dealers are hoping that their parents’ habits of buying big will set in, some surveys are revealing a trend towards smaller vehicles and more economic choices in transportation that could herald a change in the industry within the next decade.

 

Uber is only the beginning, but can it break free of the starter family?

Uber, despite its repeated bad press, is turning in positive reports and recently was rated as no more dangerous than the average taxi ride by the CATO institute. It is the golden child of the ride-sharing ventures that Millennials love. They have also driven a resurgence in carpooling, and traveling by alternative means. Success of smaller vehicles and alternative energy vehicles like the Leaf are mostly centered around metropolitan areas, but reports of this demographic also indicated that Millennials are at the lead of a trend away from suburbs and rural areas and back into the city.

Thanks to Yorkton Toyota

Reverse migration can mean big losses to auto makers

As the Millennials are aging into cities, rather than out of them like their parents, there is a real concern that auto manufacturers won’t “get” the shift in what the adult car market will look like 20 years from now. Investors are worried that the rush to borrow to refuel heavy duty and luxury vehicle manufacturing could leave the industry unable to meet a strong and consistent demand for urban friendly vehicles. With ZipCar and Uber thriving with the Millennials as they age in place, this could mean more trouble. Never before has a consumer demographic aged into their adult investment years with so little reliance on a personal vehicle. Whether or not investors can sway auto makers to plan better for the future remains to be seen. Right now the rush seems to be on trying to make up for lost time and sales since the downturn of 2007.

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SpaceX announces Hyperloop Pod Competition

Posted by in Innovation

hyperloop mobile

To the surprise of many skeptics, Elon Musk’s Hyperloop idea just got more than a new life – it has a solid chance of becoming a reality. Long trotted out as an example of an idea that couldn’t be realized yet is taking up important time and funding, the Hyperloop is experiencing a resurgence of support from multiple areas. The difference this time around is that the support isn’t theoretical, there are three companies working to bring working models of the Hyperloop Pod into being – SpaceX is the one currently garnering the most attention.

 

What are they proposing to do that is so different?

While there are two upstart companies that have tried to trade on the Hyperloop name and get backing to develop commercial versions of the system, it is SpaceX that has stepped forward and potentially placed the means to see the idea reach fruition. They have announced a Hyperloop Pod competition, as a part of the competition they will be most likely to build a test loop 2 to 4 miles long just outside their Hawthorne, California facility. The competition is a challenge for engineers to create a variety of pods for use on the loop. The test loop will allow for real-time testing of speed and effect on everything from personnel to perishables. It represents the first time that the Hyperloop has come off the drawing board and into a meaningful test phase.

 

hyperloop designWhy this could transform transportation, and why California needs the Hyperloop

The problem with Musk’s idea has allows been that it has been pitched as a personnel transporter. These aimed it squarely at a very small segment of California, which the rest of the state couldn’t justify supporting through its expensive development. The SpaceX competition opens up the application of the Hyperloop pod as a means to transport goods. Taking a page from the African countries who are using drones to get around a lack of infrastructure, the pods may be California’s answer to increasing fuel prices and pollution. Using the pods to transport perishables and other goods may be a more realistic implementation of the technology. It would certainly help alleviate an infrastructure that is severely overburdened in the state. If the Hyperloop can be built efficiently and used effectively, it may provide the breathing room California needs to take care of issues it has with highways and fuel supplies.

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Can Amtrak be made safe?

Posted by in Auto Industry, Economy, Innovation, Safety

The recent spate of accidents has everyone thinking about whether or not Amtrak can be made safe, or if the time of train travel has passed. While there are extensive safety measures in place already, the stress on engineers to meet time tables has not eased. Slower speeds and an expectation you are still going to get where you are expected don’t mix. The government watchdogs point to the need for stricter safety measures while Amtrak officials claim the government has to invest more in the rail system to keep it functioning.

 

Why not fly or ride-share?

amtrak railyway safetyThe general public may mistake the issue as being about personal transportation options. While Amtrak does move a lot of people who would otherwise be driving or flying, that isn’t what people are most concerned about. The issue at hand is the state of the American railway system and the dependence of our infrastructure on it. What isn’t moved by road is moved by rail. The roadways aren’t in shape enough to take the projected influx of long haul tractor trailers that not using the rail system would imply. Not to mention the speeds that can be achieved by rail cannot be equaled on the road. Flying is not an option, the expense and timeliness of delivery is the issue at hand.

 

How bad is the rail system?

Like the bridges and roads, not much money has been invested in maintaining and upgrading these key points of the infrastructure. The track itself has to be regraded and replaced in order to keep the speeds that are possible, but there is also another issue. The trains themselves have become lighter and faster. If you watch the China Rail, which has people everywhere sitting up and taking notice, those light and fast trains need rails specially designed for their use. The American rail is box-car worthy and not ready for high speed train cars.

 

Does it matter when auto sales are up?

Auto sales may be climbing and there is even a return to the need for heavy trucks and SUVs, but more people are centering their lives on the city. That means cars will be unwieldy and trains a necessity. If not a train, then some other means of transportation that allows for people and goods to get around quickly and efficiently. The problems with current public transportation have given private ride share programs a boost, but it remains to be seen what will turn out to be viable for the future.

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Cox Communications invest $4bn in Auto Industry Software

Posted by in Auto Industry, Economy

Cox Communications recently acquired the company DealerTrack Technologies for an estimated $4bn in what is seen as a game changing entrance into the world of automotive sales and financing & IT services Winnipeg. DealerTrack is one of the leading innovators in software and solutions for the automotive retail business. Their products serve retailers, lenders and consumers. With the new involvement of one of the largest communication concerns in the nation, it is projected that DealerTrack will define how cars are bought and sold in the US like how Levy’s Leathers in Canada is redesigning the rifle slings market.

cox

Consumers should be equally as happy as the industry

In what is considered to be one of the rare win-win acquisitions on the market of late, consumers stand to gain just as much as the industry by this acquisition. DealerTrack promises to create broader solution based software with increased access for retailers and lenders that can benefit consumer purchase power. It is rumored that this will be the start of an integration of many of the Cox products into the auto retail market that could take the starting point of a program such as OnStar and elevate it into a daily necessity.

 

The current online servers aren’t up to mobile needs

As more and more people are depending on their cars as their main environment for business and social enterprises, many companies have tried to integrate data connections with the vehicles. Cox and Dealer Track may be able to create a hybrid system that provides consumer access while also increasing the tracking available to lenders and dealers on the use of the car. Not in the sense that they will be looking at where a car is driven, but they will be able to monitor systems more effectively and define the value of the car better at the time of sale.

 

auto industry dealertrackThat type of monitoring is good

In the same way that the VIN check software transformed buying the ability for dealers, lenders and consumers to more accurately assess the use a vehicle was placed under is going to transform the market. For new vehicle purchases it also means an expanded network that will be better able to match cars with buyers and lenders too. This means less product on the lot and more product moving in the street. This could just be the transformative tool the industry needs to gain back the strength it had pre-recession while boosting buyer confidence too.

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CATO reports ride-sharing no more dangerous than taxis

Posted by in Auto Industry, Safety

car ride sharing

The CATO institute recently completed a survey of incidents reported between taxi, livery and limousine services; and popular ride sharing services such as Uber and Lyft. These new services are causing a stir among the established companies as they allow unlicensed livery drivers to charge people for rides they have arranged via a smart phone app. There have been several news items about assaults and robberies involving Uber drivers, which has led for calls for the services to be banned. Licensed livery drivers also accuse the services of cutting into their industry – one for which they have trained and often pay hefty fees for permits and licenses to work in. Uber and Lyft say they are just giving customers an alternative to licensed livery that offers them more service in more areas.

 

What CATO found

Upon analysis of all the available reported incidences, the CATO institute found that there was no passenger safety issues discrepancies between rates with the ride-sharing services and those with livery drivers. There were significant discrepancies in time and service, but no definite trend towards one type of transportation coming out ahead of the other in practice. It was noted that there was no guarantee of the automobile safety standards with Uber and Lyft services.

 

Both kinds of drivers do have background checks

While Uber and Lyft do the same background checks as a livery service, having a criminal background may not be enough to exclude you from becoming a registered driver with the companies. This is of concern to leaders of the Taxi Drivers Association. They see it as only a matter of time before something happens that could have been avoided if the ride sharing services followed the same rules of hire as the livery services.

 

ride sharingCities are not pleased with the ride sharing

There has been much in the news about different cities banning Uber and Lyft, not out of concerns for safety but due to concerns over loss of income. The taxes and fees that livery companies pay to gain access to areas of the cities, and to be allowed to carry passengers, are significant. There are back room discussions about how ride-sharing companies can contribute without their losing their appeal or low price. Right now, the more they grow in popularity the more cities may come down with regulations against the company. That’s complicated as banning an app from being used only in a certain location is something that many people would frown on there being a precedent for.

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