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Auto Loan, Lease Values Up in Q3 Despite Sales Slump

The value of U.S. auto finance originations, in- driven by a shortage of computer chips. Used-vehicle
cluding loans and leases for new and used vehicles, prices are also up, analysts say.
was $198.8 billion for the third quarter, a substan- In addition, the New York Fed reports the share
tial increase of 18.2% vs. a year ago, and the sec- of subprime loan and lease originations increased
ond-highest quarterly total on record. slightly for the quarter, to 17%, vs. 16.8% a year ago.
That’s according to the third-quarter 2021 That’s below a subprime share of 18.9% of origina- Toyota Production Back on
Household Debt and Credit Report from the New tions in the third quarter of 2019. The New York Fed Track After Chip-Related
York Federal Reserve, published Nov. 9. The record is defines subprime as credit scores below 620.
$201.9 billion, for the second quarter of 2021, the Auto lenders likely tightened approval stan- Cutbacks
report says. dards for borrowers with subprime credit early in the
“This really reflects auto prices are quite high pandemic, New York Fed researchers say. Since then,
right now…rather than an increase in the number of results suggest lenders have loosened up somewhat, Production is back on track at Toyota, with all
loans originated,” researchers for the New York Fed but at 712 for the third quarter, the average credit plants and production lines in Japan operating nor-
say in a conference call. In keeping with Federal Re- score for originations is still high by historical stan- mally as of December.
serve policy, the researchers asked not to be quoted dards, the researchers report. Global production was projected to reach
by name. Meanwhile, serious delinquencies, defined as 800,000 units in December, up from 760,000 units
The researchers say they can’t share volume 90 or more days overdue, were below pre-pandemic the same time in 2020 as the company was racing to
numbers for finance contracts in the third quarter, levels in the third quarter of 2021, at 4.05% of out- recoup output from the pandemic slowdown.
but the volume number is inevitably down vs. a year standing balances, down from 4.82% a year earlier, Toyota said all 14 plants and 28 production
ago, even though the dollar amount is up. or 4.71% in Q3, 2019, the report says. lines in Japan would be "operating normally" for
Separately, Motor Intelligence reports new-ve- The researchers for the New York Fed report are the first time since May.
hicle sales were down 13.4% for the third quarter, Andrew Haughwout, Donghoon Lee, Daniel Man- The country's biggest automaker also kept its
to about 3.4 million cars and trucks combined. grum, Joelle Scally and Wilbert van der Klaauw. production forecast unchanged at 9 million units
That’s due to an industrywide new-vehicle shortage Source: WardsAuto for the fiscal year ending March 31, 2022. The au-
tomaker planned to manufacture 500,000 vehicles
overseas and 300,000 in Japan during December.
GM to Tap Dealer Network to Install 40,000 EV Chargers Toyota is coming off a production cut in No-
vember that followed similar cutbacks in Septem-
ber and October as the automaker felt the bite of
General Motors unveils a new community the pandemic and global microchip shortage.
charging program that will provide GM dealers with Toyota cautioned that there was a "continuing
up to 40,000 Level 2 electric-vehicle chargers to be shortage of some parts" but that the company was
installed across the U.S. and Canada, including in working with suppliers to "deliver as many cars to
underserved, rural and urban communities where our customers as quickly as possible."
charger access is limited. Toyota said in October that it expected output
Through the Dealer Community Charging to recover in December and that the company would
Program, GM will give each of its dealers up to 10 do all it can to make up lost volume later in the fiscal
Ultium Level 2 chargers that can be deployed at key year ending March 31, 2022.
locations in the dealer’s respective communities, assuring the optimal EV driving and charging ex- Toyota had largely confounded the industry
including workplaces, multi-unit dwellings, sports perience for our customers,” she says in an email to by ramping up output and notching record profits
and entertainment venues and colleges and uni- WardsAuto. despite the double hit of a pandemic and the micro-
versities, among others. These charging stations Huehne declines to comment on how many chip shortage. But over the summer, Toyota finally
will be available to all EV users, not just those who GM dealers overall are balking at a future tilting succumbed to the global slowdown and joined ri-
purchase a GM EV. Nearly 90% of the U.S. population heavily toward BEVs. vals in pulling back production.
lives within 10 miles (16 km) of a GM dealership, “For dealers who choose not to join us on the Despite the chip shortage, output cutbacks
the automaker says. EV journey, we have made a genuine effort to offer and stagnant sales, Toyota delivered a 48 percent
The dealer initiative, which begins in 2022, fair and equitable assistance if they elect to exit the surge in operating profit in its July-September fiscal
is part of GM’s recently announced commitment to business,” she writes to WardsAuto. second quarter.
invest nearly $750 million to expand home, work- GM also announces that its new line of three And citing aggressive cost control and benefi-
place and public charging infrastructure through its Ultium-branded Level 2 smart charging stations cial foreign exchange rates, Toyota also lifted its full-
Ultium Charge 360 ecosystem. will be offered to customers directly through dealer- year profit forecasts to near record levels, even as it
The offer of Level 2 chargers to dealers is an ships and online to provide more home or commer- trimmed its sales outlook
olive branch of sorts. cial charging options and help make EV charging Source: Automotive News
Last year, more than 100 Cadillac dealers said more widespread.
they would give up their franchises rather than “These two initiatives are part of our plan to put
make the considerable investments necessary to everyone in an EV, making access to charging even
sell battery-electric vehicles. Cadillac has said going more seamless than before,” GM President Mark Re-
forward, every new vehicle launched will be all-elec- uss says in a news release. “We want to give custom-
tric. ers the right tools and access to charging where and
GM spokeswoman Leah Huehne says dealers when they need it, while working with our dealer
remain a critical part of the retail and relationship network to accelerate the expansion of accessible
chain with customers. “However, as dealerships charging throughout the U.S. and Canada, including
transition to an all-EV future, GM believes it is crit- in underserved, rural and urban areas.”
ical that dealers meet the essential requirements, Source: WardsAuto
com
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