Historically, car buyers have been less sensitive to swings in fuel prices than you might guess. People want the cars that they want, and most consumers seem to view energy price changes as temporary. New data shows that one part of the market maybe doesn’t look at it that way anymore.
I flew from NY to LA yesterday for the Galpin Car Show this weekend and I’m still recovering from the 60-degree swing in temperatures, so thanks to Thomas for taking over Morning Dump duties yesterday. I still have New York on my mind, and I’m glad to see the Chrysler Building is getting saved. You know who might not be saved? One or both of the brothers behind the First Brands fiasco, who appear to have turned against each other in the legal fight over the failure of the company.
Cars & Bids is putting up cars in its second hybrid/live auction, and there’s some great stuff being listed.
My Hybrid Theory Hits The Used Car Market
I’ve mostly discussed the Decade of the Hybrid as a new car phenomenon, as that’s where the initial wave of hybrid growth/EV stagnation first appeared. What about the used car market? New data from Cox Automotive shows that fuel economy is one of the best predictors of value change this year.
The wholesale value of a used car is how economists and dealers look at the used car market in general and the best source of this data is the Manheim Market Report (MMR). Here’s how the MMR normally breaks down values:
Normally, I think of car values in terms of class as well. Is it a luxury car? Is it a truck? That kind of thing. Props to the folks at Cox/Manheim, who made a chart I’ve never seen before and is super helpful:
Look how clear that is! Excluding EVs, in the first three quarters of the year the most obvious predictors of value change is now fuel economy. I feel like it’s not often these days that you’ll get a chart that’s so obvious.
Here’s Cox’s Jonathan Gregory with more details:
That’s a spread of about 25 percentage points in nine months between the least and most efficient vehicles. And because EVs aren’t in this chart, the efficiency premium isn’t just an EV story: hybrids and other high-mileage vehicles are gaining value while the rest of the market depreciates. Some overlap with segment remains, since the low-MPG buckets are still dominated by full-size pickups and large SUVs. But the gradient is steep and orderly enough that fuel costs are clearly part of the story. Diesel is the sharpest example. Diesel vehicles are only about 3% of the units on the ground at Manheim, but with diesel near $6.50 a gallon, diesel days’ supply rose to 39 days in September. That’s 11 days above the overall market and up 27% from a year ago
If you’re sitting on a slightly used hybrid vehicle you might consider that now isn’t the worst time to trade it in.
The Chrysler Building Is Saved
I love when people visit New York and look at the Chrysler Building and immediately go “Is that the Empire State Building?” I get it. The building, while no longer the tallest in the world, is still one of the most distinct.
It’s also been in a longstanding state of disrepair. Like the Chrysler brand itself, though, it sounds like the building is getting a new lease on life.
The skyscraper, opened in New York nearly 100 years ago, will see its Art Deco crown polished and restored during a refurbishment that will also involve the restoration of the building’s 77-storey façade.
Developer Tishman Speyer has taken over the lease from the Cooper Union for the Advancement of Science and Art, a private college.
Tishman Speyer and its partners will invest $235m (£178m) in the project, as part of which it will upgrade the 61st floor, which is home to huge eagle gargoyles and will also feature an “upscale” lounge.
That’s fun. The money from the building will apparently be used to return Cooper Union to a tuition-free campus.
The First Brands Fiasco Turns Fraternal
First Brands is/was the megaconglomerate behind many of the best known brands in the automotive aftermarket. The company had to file for bankruptcy after it was revealed that the leadership allegedly committed massive fraud to the benefit of its owner and founder.
According to Bloomberg, both the owner and his brother are requesting separate trials because they plan to blame the other brother for everything that happened:
Patrick, the company’s founder and former chief executive officer, said in court papers that he gave Edward a powerful position as executive vice president because he trusted his younger brother completely. Edward cultivated and managed lender relationships and entered into harmful side deals “which funneled tens of millions of dollars into Ed’s own pockets,” Patrick’s brief said.
“To keep his scheme afloat, Ed lied, shirked inquiry, and concealed his self-dealing from Patrick, who was focused on running the companies he founded,” Patrick’s lawyers said. “All told, Ed’s conduct shows that he alone organized, managed, and directed the alleged fraud.”
And the other side of this? Per Bloomberg:
Edward offers a starkly different account, saying Patrick controlled First Brands while he “played the exceedingly narrower role of sourcing working capital financing for the company.” His older brother got others “to brazenly falsify and misrepresent the company’s financials and pervert the legitimate financing structures that Patrick enlisted Ed to secure,” Edward’s lawyers said in a Sept. 4 filing.
That is messy.
Cars & Bids Goes Live
The renewal of Willow Springs is an exciting story, and long overdue. As part of the big Willow Springs Reimagined event celebrating the upgrades, the folks at Cars & Bids are going to do a hybrid auction (live and online at the same time, not of hybrids), and there’s some great stuff.
Obviously, Doug’s Ford GT is high on the list, having both the Doug provenance and being a Ford GT. There’s a Porsche by Singer, which many people find appealing.
I’m a simple man, though, and I think I’d be happy with the Renault Clio V6.
What I’m Listening To While Writing TMD
Now that I’m on West Coast time I have to adjust, because I’ve been living in a “New York Minute” as Don Henley sang… though I’m not sure what a New York Minute is.
The Big Question
Do you care more about fuel economy than you did five years ago?
Top photo: Cox, GM, Honda
The post This Chart Shows How Big Of An Impact Fuel Economy Is Having On Used Car Sales appeared first on The Autopian.
