As a result of high gas prices and used vehicle supply, ALG is reducing residuals by 2% from the May/June guide. ALG believes increasing new vehicle sales will improve used car inventory and place downward pressure on used vehicle prices.
The National Highway Traffic Safety Administration has started an extensive investigation into whether the lithium-ion batteries that will be used in most electric vehicles have any possible fire risk. The study will focus on whether or not the cells can catch fire while being charged or when in a collision.
While US new vehicle sales have been softening lately, National Automobile Dealers Association chief economist Paul Taylor sees the trend reversing in July throughout the rest of the year. Increasing inventory levels and decreasing gasoline prices will lead to increased sales for a full mix of new cars and trucks.
As gas prices fell about 20 cents a gallon in late May, full-size truck sales picked up on what would otherwise have been a dismal month. But experts doubt full-size pickup sales will ever return to their glory days of 2.5 million units.
Ford has changed direction with the release of its new C-Max van by dropping the gas-only version and adopting a hybrid-only strategy for the vehicle. Ford believes it needs a "halo" hybrid vehicle to compete with the Prius and will improve its marketing by emphasizing the vehicle for hybrid-only powertrains.