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The next steps automakers could take after sales drop again in April

DETROIT (Reuters) - Major automakers on Tuesday posted declines in U.S. new vehicle sales for April in a sign the long boom cycle that lifted the American auto industry to record sales last year is losing steam, sending carmaker stocks down. The drop in sales versus April 2016 came on the heels of a disappointing March, which automakers had shrugged off as just a bad month. But two straight weak months has heightened Wall Street worries the cyclical industry is on a downward swing after a nearly uninterrupted boom since the Great Recession's end in 2010. Auto sales were a drag on U.S. first-quarter gross domestic product, with the economy growing at an annual rate of just 0.7 percent according to an advance estimate published by the Commerce Department last Friday. Excluding the auto sector the GDP growth rate would have been 1.2 percent. Industry consultant Autodata put the industry's seasonally adjusted annualized rate of sales at 16.88 million units for April, below the average of 17.2 million units predicted by analysts polled by Reuters. General Motors Co shares fell 2.9 percent while Ford Motor Co slid 4.3 percent and Fiat Chrysler Automobiles NV's U.S.-traded shares tumbled 4.2 percent. The U.S. auto industry faces multiple challenges. Sales are slipping and vehicle inventory levels have risen even as carmakers have hiked discounts to lure customers. A flood of used vehicles from the boom cycle are increasingly competing with new cars. The question for automakers: How much and for how long to curtail production this summer, which will result in worker layoffs? To bring down stocks of unsold vehicles, the Detroit automakers need to cut production, and offer more discounts without creating "an incentives war," said Mark Wakefield, head of the North American automotive practice for AlixPartners in Southfield, Michigan. "We see multiple weeks (of production) being taken out on the car side," he said, "and some softness on the truck side." Rival automakers will be watching each other to see if one is cutting prices to gain market share from another, he said, instead of just clearing inventory. INVESTORS DIGEST BAD NEWS Just last week GM reported a record first-quarter profit, but that had almost zero impact on the automaker's stock. The iconic carmaker, whose own interest was once conflated with that of America's, has slipped behind luxury carmaker Tesla Inc in terms of valuation.

Lexus prices the new 2021 IS below most of its main rivals

As an outlier in a shrinking segment, the 2021 Lexus IS faces an uphill battle. Product planners know this, so they've priced the new model below most of its main rivals without compromising on content or performance. Unveiled in June 2020, the 2021 IS range consists of the entry-level 300 and the sportier 350 F-Sport, and each is offered with rear- or all-wheel drive. Pricing for the rear-wheel drive IS 300 starts at $40,025 including a mandatory $1,025 destination charge, which represents a mere $440 increase over the outgoing 2020 model. Adding all-wheel drive raises that figure to $42,025. Motorists who step up to the 350 F-Sport will need to pay $43,925 if they want power sent to the rear axle, or $45,925 if they want it channeled to the four wheels. The list of standard features includes 18-inch wheels (an inch bigger than before), numerous electronic driving aids, power-adjustable front seats (10-way for the driver; eight-way for the front passenger), dual-zone automatic climate control, and an eight-inch touchscreen that's nearly five and a half inches closer to the driver than the outgoing model's. Motorists can pay extra for 19-inch wheels, a power-operated moonroof, and a 10.3-inch touchscreen. And, at last, the IS is available with Apple CarPlay and Android Auto connectivity. Lexus shuffled its trim hierarchy for 2021, so the F Sport package is no longer available on the IS 300, but it's fitted to every IS 350 built for the American market. It bundles a cold-air intake, a specific exhaust system, a sound generator, 19-inch wheels, a sprinkling of F Sport badges, plus a body kit that adds bits like a rear spoiler and a diffuser integrated into the rear bumper. Heated and ventilated front seats are included, too. 2021 Lexus IS View 25 Photos Power for the rear-wheel drive IS 300 comes from a turbocharged, 2.0-liter four-cylinder engine, which develops 241 horsepower and 258 pound-feet of torque. It's bolted to an eight-speed automatic transmission. While you'd assume the all-wheel drive model simply gains a pair of driven wheels, the transformation is more complex. It also receives a 3.5-liter V6 with 260 horsepower and 236 pound-feet of torque on tap, plus a six-speed automatic transmission. Lexus notes the system can send up to 50% of the engine's output to the front axles. Selecting the IS 350 brings an evolution of the 3.5-liter six that's rated at 311 horses and 280 pound-feet of twist.

Lexus pushing upmarket as others move down, LF-LC production hinted [w/video]

Jeff Bracken, Lexus' US group vice president and general manager, knows his company lost its position as America's biggest luxury brand back in 2011, and it's a mantle that his employer probably won't be getting back any time soon. That's because Lexus is electing not to follow the luxury segment's downmarket trend any more than its $32,500 CT 200h hybrid hatchback. "Since we won't be going down below $30,000, it will be very difficult for us to ever regain luxury leadership," Bracken admitted on Autoline After Hours late last week.
Rivals Mercedes-Benz, BMW and Audi all have new low-end entries on sale or in the wings to entice new buyers and fortify their CAFE scores, but Lexus has Toyota and Scion to capture sales underneath its lineup. Instead, Bracken hints that Lexus is going upmarket and higher-performance, fueling ongoing rumors of a LFA successor, or perhaps a new offering based on the lauded 2012 LF-LC coupe concept shown above, a production version of which could also slot in where the unloved SC convertible left off. "We need to begin bringing to market luxury performance... higher performance vehicles. IS-F certainly was the beginning of that, maybe on the lower end," says Bracken.
Later in the online video interview show, Bracken gets even more candid: