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November U.S. new car sales mixed as automakers deepen discounts

DETROIT — Major automakers posted mixed U.S. November new vehicle sales on Friday and predicted a competitive December as they rushed to sell vehicles and boost their numbers before 2017 ends. Automakers are trying to sell down 2017 model-year vehicles, offering high discounts to consumers as the year-end nears. In 2016, the industry reported record annual sales of 17.55 million units. According to consultancies J.D. Power and LMC, discounts have been above 10 percent of the average transaction price for 16 of the past 17 months, a level experts say is unhealthy and unsustainable. The November sales results come as the National Automobile Dealers Association said on Friday it expects new vehicle sales to decline to 16.7 million units in 2018, after dropping to 17.1 million for the full year in 2017. If that forecast comes true, the race to move new vehicles off dealers' lots will only intensify next year. Brandon Mason, a director at PwC's automotive practice, said a worrying trend for the industry was a rising number of subprime loans. He said subprime levels are at just over 20 percent of originations, against more than 30 percent prior to the Great Recession, but recent increases remain a concern. "That's a bit of a red flag," Mason said. "It's something to keep an eye on as we move into 2018." November results by automaker: General Motors: Sales fell 2.9 percent, with sales to consumers flat against the same month in 2016. Much of the decrease was driven by lower fleet sales. GM said strong SUV and crossover sales pushed its average transaction price for the month above $37,000 for the first time. The level of unsold cars, which has been a concern for analysts and the industry, rose slightly to 83 days' supply, from 80 days at the end of October. "More vehicles are sold in December than any other month, and we are very well positioned because we have momentum in so many segments, but especially in crossovers," said Kurt McNeil, U.S. vice president of sales operations. Fiat Chrysler Automobiles: Fleet sales are low-margin, and FCA in particular has targeted a significant reduction in this type of sale in 2017. It posted a 4 percent overall decrease in sales for November, but fleet sales were down 25 percent while sales to consumers were up 2 percent on the year. Ford: The No. 2 U.S. automaker reported a 6.7 percent increase for the month, with fleet sales up nearly 26 percent and retail sales 1.3 percent higher than in November 2016.

Ford Explorer, Jeep Grand Cherokee flunk IIHS passenger-side crash test

The Insurance Institute for Highway Safety (IIHS) has uncovered major safety-related problems while crash testing a number of popular midsize SUVs. Among those that scored an overall rating of "poor," the lowest possible score, are the Ford Explorer and Jeep Grand Cherokee. Both SUVs showed a high risk of injury to a front passenger during the IIHS' passenger-side small overlap front crash test. This test simulates what might happen if a car or SUV strikes an immovable object, like a telephone pole, at 40 mph and with roughly 25-percent of its front width. "Although some vehicles in this group offer very good protection, in other models, the airbags, safety belts and structure showed serious deficiencies," says IIHS chief research officer, David Zuby. "In those SUVs, a front-seat passenger would be at risk of injuries to the head, hip or leg in a right-side small overlap front crash." In the 2018 Ford Explorer, the front of the SUV showed the structure was "seriously compromised" during both driver- and passenger-side small overlap crash testing, according to the IIHS. The lower and upper door hinge pillar showed intrusion levels of 15 and 13 inches, while the door sill itself was pushed inward 6 inches toward the crash test dummy. The IIHS states these results indicate a high probability that a front occupant would suffer injuries to their right hip and lower left leg. The 2018 Jeep Grand Cherokee didn't fare much better. Not only did the Jeep exhibit 10 inches of intrusion at the lower door hinge pillar, the front passenger crash test dummy's head hit the dashboard through the front airbag. Worse still, the side curtain airbag didn't deploy and the front passenger door opened. The IIHS says there is a strong chance this would result in right leg injuries, along with the possibility of a serious head injury. Even vehicles that earned an "acceptable" in the small overlap front crash test showed definite room for improvement. The 2018 Honda Pilot, for example, showed good structural performance during the crash itself. But the front passenger crash test dummy's head slid off the deployed airbag and hit the dashboard hard, indicating a head injury might result in a similar real-world crash scenario. Two other SUVs that scored "acceptable" ratings included the 2018 Nissan Pathfinder and 2018 Toyota Highlander. Scoring top marks of "good," the highest rating, in these IIHS crash tests were the 2018 Volkswagen Atlas, 2018 GMC Acadia, and 2019 Kia Sorento.

Ford F-150 could be affected by tornado-damaged supplier in S.C.

The disruption caused by a tornado that severely damaged a South Carolina auto-parts plant and killed a contract security guard last week could be felt by more automakers than just Ford and affect more than just its best-selling F-Series pickup, which is due for an update. And there’s still no estimate for when operations might resume at the plant. The Detroit Free Press reports that the BorgWarner plant in Seneca, near Greenville, makes transfer cases for F-150 and Super Duty pickups, the Ford Explorer and Expedition, Transit cargo vans, and Lincoln Navigator and Aviator SUVs. ItÂ’s also a supplier for the Ram 1500 and Toyota Tundra trucks. Transfer cases shift power from the transmission to the front and rear axles in four-wheel-drive vehicles. BorgWarner says it still has no update for when it might partially or fully resume operations. The tornado that ripped through the area in the western part of the state on April 13 tore the roof, walls and signage off the factory and killed a 77-year-old contract worker when the security building he was sheltering in collapsed. Only four or five others were inside the plant, which has been idled because of the coronavirus outbreak, when the tornado struck. In an SEC filing on Friday, Ford said it has sent employees to the site to help BorgWarner and assess the damage to FordÂ’s tooling. “Initial assessments indicate that the Ford tooling was not materially damaged in this incident,” Ford said in the filing. “We do not have sufficient information to estimate when the facility will be back on-line or whether or the extent to which this incident will impact our plans to resume production of four-wheel drive and all-wheel drive vehicles.” A Fiat Chrysler spokeswoman also told the Freep the company was working with BorgWarner on recovery plans. A Toyota spokesman told Autoblog that "we are collaborating with BorgWarner to help restore production for transfer cases for Tundra assembly. We are confident that theyÂ’ll fully recover over time." Like other automakers, Ford shut down production at its U.S. plants last month as a precaution against the coronavirus pandemic. But Ford hasnÂ’t yet said when it plans to reopen its factories. FCA is targeting May 4 to resume production. Models like the F-150 and Lincoln Navigator are major sources of profit for Ford, which estimated it lost $2 billion in the first quarter.