Recent Automotive News – 11,000 Ford Transit orders canceled, EPA wants 52 MPG ad more.

The pandemic is still causing all sorts of issues for the auto industry. The latest hit came from The New York International Auto Show being closed due to the increase in infections from the delta variant of Covid-19. The big three in Detroit reinstating mask mandates as many plants have been disrupted by a recent spike in infections. 

Despite the inability to fulfill demand for vehicles and many of their employees and dealerships struggling to stay afloat, GM is reporting a $2.8B 2nd quarter profit and in a letter to shareholders, GM’s CEO Mary Barra, is stating that their profit forecast before interest and tax this year is between $11.5B and $13.5B up from the last forecast of $10-$11B.

In other news that doesn’t make much sense to me, the Biden Administration and the EPA are pushing for stricter than expected emission rules. These proposed rules would mandate a company wide MPG average of 52 this is a 30% increase over this year’s mandate at 40 MPG. The administration is also calling for 50% of new vehicles sold to be EVs by 2030. I think everyone is for less pollution and better fuel economy but I am just worried that the auto manufacturers can’t produce enough inventory to meet the demand now. The supply chain issues that have caused this have not been changed that I can tell and with EVs requiring even more of the chips that are in such high demand this looks like a recipe for disaster but I guess only time will tell.

This week Ford announced to the dealers that over 11,000 Ford Transit orders have been cancelled. In previous years, with cancelled or balanced out orders, the orders would roll over to the next model year automatically and usually were given priority build dates for the start of the new model year production schedule.  In some cases the manufacturers would even price protect these orders and honor the previous years pricing.  This time it looks like the orders were just deleted and it does not look like any preference is going to be given to those customers or dealers who had orders cancelled.  Make sure, if you need vans especially, that you and your dealer are ready to order them the first day that it is available.

Last week, I reported that GM will be at full production at their Flint, Silao and the Fort Wayne Assembly plants.  These plants make GMs full size trucks. It’s one week later and they are now reporting that the 3 plants will be shut down again due to the chip shortage, with no restart dates mentioned. GM stated” The global semiconductor shortage remains complex and very fluid” which to me means they don’t have a plan and are still completely reliant on suppliers in which they have little or no control over.

This is another reminder to take all the information about the auto industry with a grain of salt right now.  No one really has their finger on the pulse of the industry as far as I can tell and there is also a lot of misinformation floating around as well.