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Average new-vehicle transaction price hits a whopping new peak in December

Elevated prices for products and higher borrowing rates led to record high transaction prices for new vehicles in December, with the average cost in the U.S. rising to a record $49,507, according to data from Kelley Blue Book released today. The report notes that ATPs — average transaction prices — have climbed above suggested retail prices — MSRPs — for more than a year. Sales volumes were up in December on a year-over-year basis by more than 5%, a situation Kelley attributed to improved supply. Overall sales for 2022, however, were off 8% year over year. “The transaction data from December clearly indicates overall prices showed no signs of coming down as we headed into year-end,” said Rebecca Rydzewski, research manager of economic and industry insights for Cox Automotive. “Luxury prices fell slightly in December, but non-luxury transaction prices were up. Truck sales were particularly strong last month, and with many trucks selling for more than $60,000, a new record was all but inevitable.” Industry analysts claim the most obvious headwinds in the new car market are generated by higher interest rates, forced by the Federal Reserve's rate hikes intended to tame inflation, and by generally limited inventory. A recent report from J.D. Power showed that the average monthly payment for a new vehicle loan in December was $718, up $47 from a year ago. But 16% of consumers in December took out loans with monthly payments of over $1,000. Consumers think vehicles, and electric vehicles especially, are way too expensive. Fortunately, manufacturersÂ’ incentives, all but extinct in the past two years, are returning, especially in the electric-vehicle and luxury market, the Kelley data suggest. Plus, "With the new tax credits on the way, electric vehicle ATPs will drop lower for qualifying vehicles,” Rydzewski said. Non-luxury brands, such as Honda and Kia, showed particularly strong performance in December, with the average price paid at $45,578 — a record high and an increase of $994 month over month. Meanwhile, the average luxury buyer paid $66,660 for a new vehicle last month. Mercedes-Benz and Land Rover showed the most price strength in the luxury market, transacting between 2.6% to 6.5% over sticker price. But luxury brands Audi, BMW, Infiniti, Lexus, Lincoln, and Volvo showed the least price strength with some discounting in effect, selling 1% or more below MSRP in December, according to the survey.

Kia negotiating to build $1.5B auto plant in Mexico

After a string of recent announcements from automakers, Kia may be the next business to break ground on a factory south of the border. The Korean company is reportedly nearly finished with negotiations to build a $1.5-billion plant near the city of Monterrey in the Mexican state of Nuevo Leon. The state's secretary of economic development confirmed the news to Reuters and anticipated talks to be completed in the first two weeks of August. Unnamed insiders also said that the location was aiming for an annual production capacity of 300,000 vehicles.
Rumors from a month ago first suggested the possibility of the new factory. It would reportedly build two models of small cars, and assembly could potentially begin as soon as 21 months after breaking ground. Currently, Kia only has one North American plant, in Georgia, that builds the Sorento and Optima.
In the last few years, Mexico has become of hotbed of North American automobile production. Mazda, Honda and Volkswagen all recently opened new or expanded factories to build cars there. There are even more on the way with a joint venture plant from Mercedes-Benz and Infiniti and BMW's announcement of its own $1 billion undertaking in Mexico.

2018 Kia Rio Quick Spin Review | A grown-up subcompact for grown-ups

The 2018 Kia Rio is doing itself few favors, if any, with its name. Maybe it's the nameplate's terrible early generations or that it sounds a bit like a tropical disease you picked up from a mosquito in Ecuador. In any event, saying "I own a Kia Rio" just seems like something you'd say under your breath and preferably not at all. Which is a damn dirty shame, because the Rio is in fact a terrific little car that anyone should be quite proud to own. There is a grown-up vibe to it that greatly outpaces whatever expectations you might have for a sub-compact car. It is handsome, well-equipped, seemingly well-made, and most surprisingly, extremely competent to drive. Let's start with the exterior styling. Although at first glance it seems a tad conservative for the segment, and perhaps not as expressive as its predecessor, it's handsome and well-proportioned. It is indeed more grown-up in appearance, especially in our test car's Urban Grey paint. It may not be flashy, but it also looks like a real car that just happens to be small, and I think you'd be much happier picking up a date in the Rio than in a Honda Fit or Ford Fiesta. That notion carries over to the interior, which itself is an impressive upgrade over what was already one of the nicest cabins in the segment. Now, not every Rio gets the benefits of our test car's Red Accent package (although it's only a $130 option and includes leather upholstery), but it's nevertheless a visually appealing place to spend time. There's an attractive minimalism to the design (note the cool HVAC controls) and a definite European vibe that, again, looks grown-up. Materials quality is good for the segment, though the test car's leather seats and steering felt a cut above the rest. Then there's the touchscreen that sprouts up from the dash like just about everything these days. Included on the EX trim level, it's 7 inches, easy to see and reach, and comes with Apple CarPlay, Android Auto and satellite radio. Down below, there's a handy shelf for your plugged-in smartphone above another bin for whatever else. In terms of space, the six-way manually adjustable seats provided just enough room for this 6-foot-3 editor's legs, which is far from a sure thing among subcompact cars. I'm one unhappy guy after about 10 minutes in a Honda Fit. Sure, putting the front seat all the way back pretty much cancels out back seat room, but this is a subcompact car, what are you expecting?