Stellantis Says Auto Loans Are Getting Longer as Demand Remains High

9 min read
Side view of a Jeep Renegade in a dealership lot

Side view of a Jeep Renegade in a dealership lot

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 favour. 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 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 installation 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 that 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 stabilization.”

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 buy 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 says 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 is 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 DetroitNews. 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%.

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 did when you lost an election now – before inevitably conceding.

4th Gear: Europe Is Having Its Own Car Data Access Moment

You know the right-to-repair court battles happening around the country related to data access and telematics in cars? The European Union is attempting to codify the data access language of its own, which is a good idea. From Reuters:

The European Commission is working on rules to ensure fair access to valuable car data for companies and industry but does not know when they will be ready, a spokesperson said on Monday as industry groups fret about unfair competition from US and Chinese tech companies.

The huge potential of the connected car market, which consultancy Fortune Business Insights says could grow to as much as 400 billion euros ($435 billion) by 2030, has triggered a fight between carmakers and industrial users on access to vehicle data.

Carmakers are looking to data-driven software products and subscription services covering everything from driving habits to fuel consumption and tire wear as the next money spinner.

Data ownership, however, is not clearly defined in EU law, resulting in the current dispute between carmakers and those who want to access it.

“The Commission is working on the preparation of a sector-specific proposal on in-vehicle data. It will aim to complement the proposal for a Data Act, published in February 2022,” a spokesperson for the EU executive told Reuters in an email.

Even though regulatory bodies probably should have given this issue some thought before 2023, it’s nice that the Commission is taking some initiative, rather than leaving it up to a ballot question that allows automakers to drag things out and ignore the spirit of the law. Then again, there’s still plenty of time for the EU to capitulate to corporate wishes here, and they’ve been pretty good at that as of late.

5th Gear: Tire Espionage

Closing out today’s Morning Shift is the latest from the high-stakes game of world diplomacy and international intrigue that is the tire industry. Basically, a Czech company named Coda Development accused Goodyear almost 10 years ago of misappropriating not one, not two but a whopping 12 trade secrets. Coda sought $64 million in damages and got its wish — until Goodyear appealed and a district judge threw out the verdict late last week. From Reuters via AutoNews:

US District Judge Sara Lioi said most of the trade secrets that the Czech company Coda Development accused Goodyear of stealing were too vague to be legally protected.

A spokesperson for Goodyear said Monday that the company agrees with the decision and “respects the intellectual property rights of others.” Attorneys for Coda did not immediately respond to a request for comment Monday.

Coda sued Akron, Ohio-based Goodyear in 2015, and said in an amended 2019 complaint that Goodyear copied Coda CEO Frantisek Hrabal’s technology to keep tires inflated with an internal tube, after discussing a potential collaboration in 2009 for General Motors Co.’s Chevy Volt.

A jury decided last year that Goodyear misappropriated five of the 12 trade secrets Coda accused it of misusing. It awarded Coda $2.8 million in compensatory damages and $61.2 million in punitive damages for Goodyear’s “willful and malicious” behavior.

But Lioi said Friday that four of the five secrets – related to Coda’s design, development and placement of self-inflating tire pumps – were not specific enough to be considered protective trade secrets.

Lioi said Coda’s fifth alleged secret, related to developing a functional self-inflating tire, was “no secret at all” because the concept was not new in 2009.

While self-inflating tires may not have been a new idea in 2009 (here’s a USPTO patent that dates back to 1965), if Goodyear copied elements of Coda’s work in its own solution, then Coda’s rightly incensed here. Either way, this case has been dragged on a very long time and I can’t be avenged when two corporations are fighting. I just hope there were spies involved, at some point.

Reverse: Little Billy

It was on this day in 1933 — 90 years ago — that longtime NASCAR CEO Bill France Jr. was born. Junior replaced “Big Bill” to lead the sport in 1972 and grew it into the juggernaut it is today. Per the Florida History Network:

Bill France Jr. became head of NASCAR when “Big Bill” retired in 1972, 13 years after the opening of the Daytona International Speedway and the end of beach racing. Under Bill France Jr.’s leadership, NASCAR expanded into one of the nation’s most popular spectator sports, drawing national television audiences rivaling those for National Football League games. In 1979, he signed a deal with CBS Sports to television the entire Daytona 500 live for the first time, then 20 years later oversaw the signing of a $2.4 billion television contract with Fox, NBC and TNT, which required replacing the sport’s longtime title sponsor – Winston cigarettes – with the Nextel phone company.

Neutral: They Did It Again

Image: Genesis

Image: Genesis

Performance SUVs really don’t need to be a thing, but if automakers are intent on keeping them around, at least we’ll get some like the GV80 Coupe “Concept.” Somebody stop Genesis, because there’s no reason anything this big should look this good.

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