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How new car shortages may impact your buying experience

If you want further proof that the auto industry is bouncing back, look no further than the empty lots and forecourts of your local dealership. According to a story by The Wall Street Journal, continued high demand for mainstream cars is overtaxing automakers' ability to produce enough models. Several dealers interviewed for the story are reporting two-week supplies as opposed to the typical two-month allocations.
With sales expected to hit 1.4 million units when August numbers arrive shortly and incentive spending down to its lowest amount since January, these limited supplies are pushing prices even higher. For example, according to the WSJ, the average price of a Ford Fusion is up past $26,000. Unfortunately, it's difficult for manufacturers to increase production quickly. If it invests in its facilities, as many manufacturers have done, it risks wasting cash if growth suddenly slows. At the same time, the momentum gained over the past several years could be short lived if vehicle supplies continue to dwindle. "Manufacturers are in a precarious situation," notes Karl Brauer, a senior director at Kelley Blue Book.
Low interest rates and a wealth of desirable features are also allowing customers to purchase more expensive vehicles while justifying their higher overall price tags, a situation that is compounding supply shortages. Even now, during the annual end-of-summer clearance season, deals on new vehicles are remarkably difficult to come by. According to the report, the Toyota Corolla is in a self-inflicted state of shortage, as Toyota clears out inventory in anticipation of the new 2014 generation arriving in dealers. Ford's supplies should rebound as Fusion production comes on line at its Flat Rock, Michigan factory. The Chevrolet Impala, Honda Odyssey, Civic, and Accord and Subaru Forester are also facing shortages.

Struggling McLaren-Honda F1 partners near 'fork in the road'

WOKING, England - McLaren's partnership with Honda has not worked so far, and the team is now approaching a "fork in the road," executive director Zak Brown said on Wednesday. Speaking to Reuters in his office at the Formula One team's headquarters, Brown (pictured above) indicated clearly that a parting of the ways was a real option under consideration by management. The American said engine upgrades promised for this weekend's Canadian Grand Prix were not ready, and the Japanese manufacturer could not say when they might be. And while McLaren still wanted to win championships with Honda, there were serious concerns as to whether that was achievable. "Honda's working very hard, but they seem a bit lost," said Brown, who replaced Ron Dennis at the helm late last year. "We were only told recently that we wouldn't have the upgrade coming (for Montreal) ... and we don't have a definitive timeline, which is concerning because the pain is great and we can't sit around forever. "We were eagerly awaiting this upgrade as were our drivers, and it's a big disappointment that it's not coming. It's not lack of effort, but they are struggling to get it to come together."FAILURE AND EMBARRASSMENT McLaren, the second oldest and most successful team in Formula One after Ferrari in terms of race wins, are the only ones yet to score a point this season. They have not won a race since 2012. The renewed partnership with Honda in 2015 was billed as a return to the glory days, when French great Alain Prost and the late Brazilian Ayrton Senna dominated the late 1980s and early 1990s. Instead it has brought failure and embarrassment to the former world champions, whose cars have failed to finish races -- and sometimes even start them -- due to engine failures. Spanish driver Fernando Alonso, a double world champion whose future is uncertain, said in March that "we have only one problem, and that is the power unit. There is no reliability and there is no power." Honda's engine troubles even plagued Alonso at the Indy 500, where a failure took him out of the race. McLaren were ninth in 2015, sixth last year and this season could become their worst ever. MARCHING ORDERS "The executive committee have now given us our marching orders," said Brown, who is also chairman of the fast-growing Motorsport Network media group. "We're not going to go into another year like this, in hope." "I don't want to get into what our options are.

Average transaction prices climb to a record $36,270 in January

The automotive sector made a hash of the numbers last month, a mess of pluses and minuses clogging the transaction-price charts according to Kelley Blue Book. The overall industry rose one percent, even though buyers bought fewer cars and light vehicles in January 2018 vs 2017 using the selling-day adjusted rate. Due to January transaction prices rising to $36,270, a record for January, the value of new vehicles sold climbed more than $1 billion compared to January 2017. KBB's transaction prices don't include customer incentives, which changes the complexion slightly; average incentive spending rose to just over ten percent. The average transaction price in December 2017 was $36,756, so January dropped a bit - nothing unexpected, with the month annually blamed for "January doldrums." More revealing is the fact that the average transaction price in January 2017 was $34,910. This year's plumped-up figure came courtesy of the continued shift to crossovers, SUVs, and light trucks, which shouldn't surprise anyone who's read an automotive blog in the past 20 years. That category comprised nearly 70 percent of new vehicle sales for the month. Some manufacturers profited more than others, though. Fiat Chrysler managed 12.8 percent fewer sales in January compared year-on-year, but the company's vehicles sold for $1,300 more. The Ford brand suffered a 6.3-percent dip in sales, but brand transaction prices increased $2,000, while a Lincoln sold for $8,700 more on average. General Motors sold more cars and sold them for more money; overall GM transaction prices rose four percent, or $1,270, while a GMC traded hands for seven-percent more than in January 2017 and a Cadillac got $2,300 more on average. Of KBB's listed automakers, the Volkswagen Group got the most of out its customers, transaction prices rising at the German automaker by 5.6 percent to $42,243 in January 2018 compared to a year earlier. American Honda followed with a 4.3-percent increase to $28,991, GM in third at 4.1 percent to $40,313. Find your next car at Autoblog using our new and used car listings or the Car Finder tool. Broken out by segment, minivans rocked the table, transaction prices leaping by 7.9 percent to $35,380 compared to January a year earlier. Luxury cars boasted the next-highest rise, at 3.6 percent to $58,533.