CATA News

The U.S. government’s road safety agency is offering a smartphone app that will alert drivers if their vehicles are recalled.
 
The National Highway Traffic Safety Administration rolled out the free app for both Android and Apple phones on Aug. 27.
 
Owners key in or scan their 17-digit vehicle identification number, and the app will search the agency’s database for recalls. If there is an open recall, the app will send an alert, the agency said.
 
People also can add child seats, trailers and tires, and the app will check those for recalls.

 

Private services such as Carfax already offer similar apps for vehicle recalls, but this is a first by NHTSA, which is part of the U.S. Department of Transportation. Owners already could go to www.nhtsa.gov/recalls and check the NHTSA database for recalls. DriveChicago.com also has a prominent link to the NHTSA database.
 
Full information about the app can be found at www.nhtsa.gov/safercar-app.
 
The safety agency said vehicle information is kept on the owner’s phone and no personal information is shared with the government.
 
"The SaferCar app allows you to store your information locally on your device, and then the app goes to work to inform you of recalls as they occur," NHTSA Deputy Administrator James Owens said in a statement.
 
The NHTSA says that one in four vehicles now on the road has an unrepaired recall, which is a safety risk. Automakers must fix safety recall problems at no cost to owners. The CATA’s current advertising encourages car owners to take their vehicles to a new-car dealership to have them checked for open recalls, then to get the free recall service work.
 
Last year, 53 million vehicles, car seats, tires and equipment were recalled, according to the agency.

 

Since the proliferation of the coronavirus pandemic, cars are taking on even more functions, proving they’re not just for getting people from point A to point B.

 

Two separate surveys showed that many people are increasingly using their cars to get away from the people they live with, get a change of scenery, take a nap, make a personal or business call, get some "me" time or just to feel normal again.
 
"I had to drive out to the suburbs recently. I have two teens and it was my first time in a while being out of the house," said Jenni Newman, editor-in-chief of Cars.com in Chicago. "It was my first feeling that life was normal again. I was singing loudly and having a great time. It hit me, it was a fabulous soothing bond for my soul."
 
These new uses for vehicles are changing what consumers want to buy in their next cars. For example, some consumers said they now want off-road capability and more space in their next vehicle. Some people seek added technology so they can work in their car or have entertainment during road trips. In some metro areas, there has been an uptick in searches for sedans.
 
"The commute isn’t part of our life anymore, so getting back in the car is part of the fun and experiencing driving again," Newman said. "It’s a bubble on wheels for many of us."

 

The new date night
Kim Sperling and her husband Bruce, both 46, have reinvented their date night. Every Sunday afternoon when her parents babysit their 8- and 7-year-olds, the couple take off in their 2018 Chevrolet Suburban SUV.
 
"We go for a drive and that would be our date day," Kim said. "We go and get a milk shake and a lot of times end up taking a nap in our car. We talk for a while and turn on the air conditioning and fall asleep."
 
The suburban couple started the drive-dates in April because, "We realized we’d lose our mind if there wasn’t some way for my husband and me to connect," Kim said. Also, it was a chance to just get away from the kids and have a change of scenery.
 
In an April study by Cars.com, 53% of parents who responded to the survey said they "used their cars to hide from their kids, which is hilarious and also relatable," Newman said.
 
The study had 990 respondents, 445 of whom were parents. One in four of the respondents also said they use their vehicle as a makeshift office because it was quiet, Newman said.

 

Off-roading in Dr. Ben
A two-part study done by TrueCar found that 73% of the 2,000 respondents said they used their cars as a private space to get away from the people they live with. The first part of the study was done in March and the second part in July. TrueCar surveyed people ages 18 to 60-plus, an equal mix of men and women, said Wendy McMullin, director of research at TrueCar.
 
Her own colleagues were an inspiration to do the study, McMullin said.
 
"We have had Zoom meetings where their background is their vehicle," McMullin said. "They’re using it as an office when they need a quiet and isolated space or a place to escape. We also saw a good portion of people who said they were taking it out just for a drive, going nowhere, except to get time for themselves."
 
Beyond becoming a haven for "me time," other activities the TrueCar respondents said they use a car for:

 

• Leisurely drives (56% of respondents)
• Road trips (45% of respondents)
• To carry home improvement supplies (37% of respondents)
• A place to take business or personal phone calls (37% of respondents)
• As a makeshift office space (32% of respondents)
• Off-roading (26% of respondents)

 

Also, seven in 10 of the respondents said they think of their car as an extension of their home and as a part of their family. Car owners said they felt an emotional attachment to their cars, with 35% of respondents naming their vehicles. The most creative names included Betsy, Birtha, Bumblee, Cherry, Dr. Ben and Falcon.
 
"We asked about life moments experienced in the car and we had large portion say they got their first kiss in a car or shared major life news such as where they learned they’d become a parent," McMullin said.

 

Changing consumer desires
TrueCar also found people are starting to identify features they want in their next car compared to what they desired pre-pandemic, said McMullin.
 
"Comfort is the top one selected," she said. "People say they want to do more off-roading or have more space or better connectivity and more technology."
 
Close to one-third of those surveyed said they want off-roading capability in their next car. A third of the vehicles currently sold are not capable of off-road driving, McMullin said, adding, "So this represents more people saying they want that capability than we currently see in car sales."
 
The added technology satisfies people working in their cars to get quiet time. In the Sperlings’ case, they foresee more family road trips in the future, so they would pay to activate Bluetooth and have other in-vehicle technology.
 
"Our next car we get, we will buy a car with Bluetooth and built-in TVs in the car," Kim Sperling said. "We thought we’ll probably road trip now and wish we had that."

 

RVs and car sales rise
At Feldman Automotive, which has eight new-vehicle dealerships in Michigan and three in Columbus, Ohio, consumer preferences are shifting as people use their vehicles as an "escape" compared to pre-pandemic, said Dave Katarski, COO of Feldman.
 
"We have also seen it in the RV business," Katarski said, referring to Mark Wahlberg Airstream & RV in Columbus, Ohio, which the group co-owns. "People are buying RVs like crazy and they need a truck or SUV to tow the trailers."
 
Beyond that, Cars.com said consumer searches for vehicles with moonroofs and sunroofs inched up 1.5% compared with the year-ago period, said Allison Phelps, a spokeswoman for Cars.com. Cars.com also found that 29% of shoppers who were in the market to buy a vehicle over Labor Day weekend said they would be looking for a convertible. It was the third most popular choice.
 
"We also witnessed an uptick in search activity for sedans," Phelps said. "People searching for sedans increased 14 percentage points higher than the growth in overall search activity from April to June."
 
Phelps said major metro hubs saw more significant growth in sedan activity than the rest of the country. In New York City, sedan searches were 41 percentage points higher, Chicago was 24 percentage points higher, and Los Angeles was 4 percentage points higher than the overall increase in searches on the site, Phelps said.
 
"People are being hyper cautious about public transportation and ride-sharing and so they’re turning to vehicle ownership to get to where they need to go," Newman said.

 

Since the proliferation of the coronavirus pandemic, cars are taking on even more functions, proving they’re not just for getting people from point A to point B.

 

Two separate surveys showed that many people are increasingly using their cars to get away from the people they live with, get a change of scenery, take a nap, make a personal or business call, get some "me" time or just to feel normal again.
 
"I had to drive out to the suburbs recently. I have two teens and it was my first time in a while being out of the house," said Jenni Newman, editor-in-chief of Cars.com in Chicago. "It was my first feeling that life was normal again. I was singing loudly and having a great time. It hit me, it was a fabulous soothing bond for my soul."
 
These new uses for vehicles are changing what consumers want to buy in their next cars. For example, some consumers said they now want off-road capability and more space in their next vehicle. Some people seek added technology so they can work in their car or have entertainment during road trips. In some metro areas, there has been an uptick in searches for sedans.
 
"The commute isn’t part of our life anymore, so getting back in the car is part of the fun and experiencing driving again," Newman said. "It’s a bubble on wheels for many of us."

 

The new date night
Kim Sperling and her husband Bruce, both 46, have reinvented their date night. Every Sunday afternoon when her parents babysit their 8- and 7-year-olds, the couple take off in their 2018 Chevrolet Suburban SUV.
 
"We go for a drive and that would be our date day," Kim said. "We go and get a milk shake and a lot of times end up taking a nap in our car. We talk for a while and turn on the air conditioning and fall asleep."
 
The suburban couple started the drive-dates in April because, "We realized we’d lose our mind if there wasn’t some way for my husband and me to connect," Kim said. Also, it was a chance to just get away from the kids and have a change of scenery.
 
In an April study by Cars.com, 53% of parents who responded to the survey said they "used their cars to hide from their kids, which is hilarious and also relatable," Newman said.
 
The study had 990 respondents, 445 of whom were parents. One in four of the respondents also said they use their vehicle as a makeshift office because it was quiet, Newman said.

 

Off-roading in Dr. Ben
A two-part study done by TrueCar found that 73% of the 2,000 respondents said they used their cars as a private space to get away from the people they live with. The first part of the study was done in March and the second part in July. TrueCar surveyed people ages 18 to 60-plus, an equal mix of men and women, said Wendy McMullin, director of research at TrueCar.
 
Her own colleagues were an inspiration to do the study, McMullin said.
 
"We have had Zoom meetings where their background is their vehicle," McMullin said. "They’re using it as an office when they need a quiet and isolated space or a place to escape. We also saw a good portion of people who said they were taking it out just for a drive, going nowhere, except to get time for themselves."
 
Beyond becoming a haven for "me time," other activities the TrueCar respondents said they use a car for:

 

• Leisurely drives (56% of respondents)
• Road trips (45% of respondents)
• To carry home improvement supplies (37% of respondents)
• A place to take business or personal phone calls (37% of respondents)
• As a makeshift office space (32% of respondents)
• Off-roading (26% of respondents)

 

Also, seven in 10 of the respondents said they think of their car as an extension of their home and as a part of their family. Car owners said they felt an emotional attachment to their cars, with 35% of respondents naming their vehicles. The most creative names included Betsy, Birtha, Bumblee, Cherry, Dr. Ben and Falcon.
 
"We asked about life moments experienced in the car and we had large portion say they got their first kiss in a car or shared major life news such as where they learned they’d become a parent," McMullin said.

 

Changing consumer desires
TrueCar also found people are starting to identify features they want in their next car compared to what they desired pre-pandemic, said McMullin.
 
"Comfort is the top one selected," she said. "People say they want to do more off-roading or have more space or better connectivity and more technology."
 
Close to one-third of those surveyed said they want off-roading capability in their next car. A third of the vehicles currently sold are not capable of off-road driving, McMullin said, adding, "So this represents more people saying they want that capability than we currently see in car sales."
 
The added technology satisfies people working in their cars to get quiet time. In the Sperlings’ case, they foresee more family road trips in the future, so they would pay to activate Bluetooth and have other in-vehicle technology.
 
"Our next car we get, we will buy a car with Bluetooth and built-in TVs in the car," Kim Sperling said. "We thought we’ll probably road trip now and wish we had that."

 

RVs and car sales rise
At Feldman Automotive, which has eight new-vehicle dealerships in Michigan and three in Columbus, Ohio, consumer preferences are shifting as people use their vehicles as an "escape" compared to pre-pandemic, said Dave Katarski, COO of Feldman.
 
"We have also seen it in the RV business," Katarski said, referring to Mark Wahlberg Airstream & RV in Columbus, Ohio, which the group co-owns. "People are buying RVs like crazy and they need a truck or SUV to tow the trailers."
 
Beyond that, Cars.com said consumer searches for vehicles with moonroofs and sunroofs inched up 1.5% compared with the year-ago period, said Allison Phelps, a spokeswoman for Cars.com. Cars.com also found that 29% of shoppers who were in the market to buy a vehicle over Labor Day weekend said they would be looking for a convertible. It was the third most popular choice.
 
"We also witnessed an uptick in search activity for sedans," Phelps said. "People searching for sedans increased 14 percentage points higher than the growth in overall search activity from April to June."
 
Phelps said major metro hubs saw more significant growth in sedan activity than the rest of the country. In New York City, sedan searches were 41 percentage points higher, Chicago was 24 percentage points higher, and Los Angeles was 4 percentage points higher than the overall increase in searches on the site, Phelps said.
 
"People are being hyper cautious about public transportation and ride-sharing and so they’re turning to vehicle ownership to get to where they need to go," Newman said.

 

In a surreal year in which everything seems to be going wrong, it probably comes as little surprise that consumers are increasingly frustrated with the auto industry. A new study found customer satisfaction has fallen to its lowest level since 1999.
 
Only a handful of brands found a way to keep customers happy, according to the American Customer Satisfaction Index, which reported the industry slipping overall by 1.3% this year. It was the third consecutive annual decline, and it marks a significant turnaround after customers reported satisfaction levels soaring to record levels following the Great Recession.
 
"The drop in satisfaction was more alarming a year ago, with 21 of 27 nameplates registering ACSI declines, but this ongoing slide pulls the auto industry into uncharted waters," said David VanAmburg, managing director at the ACSI.
 
Exactly how the pandemic might have played into the downward performance this past year isn’t quite clear, but there is no doubt the industry struggled simply to do business this year. Factory closures have left retailers short of some of their most popular products. Dealers in many states were forced to close their doors, at least temporarily, then adapt to doing much of their business online.
 
If there’s been any good news for the industry, it’s that other owner surveys, such as the J.D. Power Initial Quality Study, have indicated that the latest crop of cars, trucks and crossovers suffer from fewer problems. The IQS contained a few surprises, notably including the fact that Fiat Chrysler, normally an industry laggard, had several of its brands finish at the top this year.
 
Coincidentally, and perhaps surprising to some, that is mirrored by the ACSI which ranked Ram tied as its No. 1 mainstream brand, outscoring traditional competitors such as Honda and Toyota. Ram scored 80 points out of a possible 100, just behind the study’s overall winner, Lexus. And while the score for Ram was flat year-over-year, the Japanese luxury marque saw its own score slip by 2 points for 2020.
 
Ram tied with Toyota which slipped a point in this year’s study.
 
Fiat Chrysler’s pickup brand was a relatively rare exception. It was joined by only one other domestic marque, Cadillac, in the ACSI top 10. The Japanese had five brands in that list, the Germans three.
 
As good as FCA did with Ram, however, its truck brand anchored this year’s customer satisfaction list, with a score of 73%. At least it was pointing in the right direction with a 3-point gain, one of only a handful of brands to improve their scores this year.
 
Korean manufacturers, which have seen a big surge in quality in recent years, didn’t fare all that well in terms of customer satisfaction, with Kia coming in at 77 points, Hyundai at 76.
 
Experts warn that even with good quality, a manufacturer scoring poorly in terms of customer satisfaction needs to worry about retaining owner loyalty.
 
Following a combined 4.9% decline over the past two years, "automobiles and light vehicles hit an industry low not seen since 1999 and far below the peak score of 84," said VanAmburg.
 
Whether manufacturers will be able to resolve their customer satisfaction problems after the pandemic will be one of the industry’s big challenges.

 

Arthur J. (Art) Bilek, who worked 60 years in law enforcement for Chicago and Illinois and who was the father of CATA staffer Mark Bilek, died Aug. 13. He was 90.

 

While growing up in Chicago, Mr. Bilek followed firefighters on calls, then took pictures of the fires and sold them to Chicago newspapers. After serving in the U.S. Army during World War II, he became a special investigator for the Cook County state’s attorney’s office. He later became the first Chicago police officer dedicated to stopping organized crime in the city.

 

Mr. Bilek worked to implement the world’s first Criminal Justice college curriculum, and he taught at several universities. He later led the Illinois Law Enforcement Commission, where he worked to improve local police departments and enact uniform requirements across the state.

 

After a series of break-ins and assaults at hotels across the country, hotelier Barron Hilton hired Mr. Bilek to become the world’s first security director for a major hotel chain. He later became vice president of product development and government affairs for the famed Pinkerton Corporation.

 

As recognition and appreciation for his six decades of contributions to law enforcement in the city and Illinois, Dec. 31, 2014 was proclaimed Arthur J. Bilek Day in Chicago.

 

In addition to Mark Bilek, survivors include his wife, Mary Ann; daughters Mary Lu and Judith; son Arthur III; 11 stepchildren; nine grandchildren; and two great-grandchildren. Two wives, Angela and Ellen, preceded him in death. Memorials appreciated to the 100 Club of Chicago.

 

After more than 36,000 people were killed in U.S. traffic accidents in 2019, the Transportation Department’s Office of Inspector General said Aug. 11 that it would audit oversight of U.S. vehicle safety standards.
 
The inspector general’s office said it was launching a review of the National Highway Traffic Safety Administration’s efforts to set and enforce Federal Motor Vehicle Safety Standards (FMVSS).
 
"Given the importance to the traveling public that all new vehicles and components meet federal safety standards, we are initiating a review of NHTSA’s FMVSS process," the inspector general’s office wrote.
 
The NHTSA said in a statement it would "work with the Office of Inspector General to provide any pertinent information requested."
 
In March, NHTSA proposed sweeping changes to U.S. safety requirements to speed the deployment of self-driving vehicles without human controls. It proposed rewriting 11 vehicle safety standards that require traditional manual controls "by revising the requirements and test procedures to account for the removal of manually-operated driving controls."
 
The NHTSA proposed revising rules for occupant protection, steering controls, glazing materials, door locks, seating systems, side impact protection, roof crush resistance and child restraint anchorage systems.
 
Companies such as General Motors, Alphabet Inc’s Waymo, Uber Technologies and Ford are aggressively testing automated vehicles.
 
David Friedman, who was an NHTSA deputy administrator during the Obama administration, said the agency under President Donald Trump has failed to adopt any significant life-saving regulations.
 
"That is a clear failure to fulfill (the) NHTSA’s mission to save lives and prevent injuries, especially when you consider that there are technologies out there now that could cut the annual death toll in half," Friedman said.
 
It often takes NHTSA years to finalize changes or adopt new motor vehicle safety standards.
 
After Congress demanded rules in 2010, the NHTSA in February 2018 finalized rules requiring "quiet cars" such as electric vehicles to emit alert sounds to warn pedestrians of their approach.

 

Established automakers and suppliers are reeling from the COVID-19 pandemic, looking ahead to years of depressed sales and are burning through cash in pursuit of electrification, two industry analysts said.
 
Startup companies in the sector, meanwhile, mostly are committed to battery-electric and hybrid vehicles, have ready access to capital and don’t need to shore up their finances by selling internal-combustion-engine vehicles, John Casesa and Rod Lache said during a presentation this month at the Center for Automotive Research’s online management briefing seminars.
 
"Technology is making the automobile into something different" from what is on the road today, said Casesa, a partner in Guggenheim Investments and a former executive for General Motors and Ford. "(EV maker) Tesla is the closest thing to a preview of the automotive industry."
 
Casesa and Lache, of Wolfe Research, both say capital is flowing toward new technologies while legacy OEMs struggle with their bottom lines, both now and in the future.
 
Current light-vehicle sales have been crippled by COVID-19 and likely won’t exceed 15 million units annually over the next five years, compared with 17 million in the prosperous 2016-2017 period, Lache said. The pandemic’s effects on consumer demand aren’t fully known, he said.
 
Demand for ICE-powered vehicles has matured, but well-capitalized legacy OEMs "will find great values in consolidation," said Casesa, citing the pending merger of Fiat Chrysler Automobiles and French automaker PSA.
 
Lache mentions cooperative research agreements that fall short of mergers, such as those between Ford and Volkswagen, and GM and Honda.
 
For startups, meanwhile, there is "a ton of money sitting on the sidelines in private equity," Lache said. "These companies are going to eat the legacy automakers’ lunch."
 
Kristin Dzieczek, vice president of research at CAR and the panel’s moderator, asked, "Why does Wall Street view the legacy manufacturers so negatively?" Meanwhile, financial backing is available for "companies that haven’t built a car," she said.

 

The legacy OEMs’ outlook isn’t totally bleak, the analysts said. "There’s much more pent-up demand than we realize," said Casesa.
 
Lache noted that GM almost broke even in the second quarter despite its manufacturing plants being shut down by COVID-19 for almost two months.
 
GM also is pressing ahead with electrification, spending $2.3 billion on a joint venture with LG Chem to manufacture EV batteries in Lordstown, Ohio, and $2.2 billion to convert its Detroit-Hamtramck Assembly Plant for production of EVs.

 

With its Lucid Air set to go on sale in the coming model year, Lucid Motors, a California-based EV maker, plans to unveil its first production model during a web event in September.
 
The startup is just one of a long list of new brands hoping to crack the U.S. market during the next several years, a list that also includes the likes of Fisker, Lordstown Motors, Faraday Future, Bollinger, Vantas, BYD, Great Wall and others.
 
The U.S. automotive market has long been a relatively closed club. While a handful of new brands have pried open the door in the past half century, far more have either shut down or walked away. But if even a fraction of these new entrants actually makes it into showrooms, American buyers soon will have more brands to choose from than at any time since World War II.
  
Automakers "have always wanted to get into the U.S. It’s a coveted market," said Stephanie Brinley, principal automotive analyst with IHS Markit. "It’s a difficult market to get into, but not impossible (though) it takes a lot of volume to be profitable."
 
During the past 120 years, the U.S. has seen more than 800 brands come and — mostly — go, according to the archives of the Henry Ford museum in Dearborn, Michigan. The vast majority of them popped up during the industry’s pioneering days, with names such as Chalmers, Maxwell and Duesenberg. The Great Depression wiped out hundreds of them. Others, such as Studebaker and Packard, struggled on through World War II but couldn’t generate the economies of scale needed in an increasingly costly business and were gone by the 1960s.
 
The post-War period did see the arrival of a new wave of import brands, including European marques such as Renault, Volkswagen, BMW and Mercedes-Benz, as well as Japanese players such as Toyota, Honda and Nissan. Even among them, many struggled. The 1990s kicked off a new exodus, with names including Renault, Peugeot, Fiat, Daihatsu and Suzuki falling by the wayside.
 
Detroit’s Big Three, meanwhile, have pared back. Ford dropped Mercury and the short-lived Merkur, while Chrysler — in its various incarnations — abandoned names such as Plymouth and Eagle. And, following its bankruptcy a decade ago, General Motors pulled the plug on Hummer, Pontiac, Saturn and Saab.
 
It’s not that there haven’t been plenty of wannabes. After World War II, industrial magnate Henry Kaiser hoped to launch his own brand, announcing at an industry confab that he was ready to back it up with a $100 million investment. "Give that man one white chip," responded GM’s then president. Kaiser didn’t last long, nor did Malcolm Bricklin, who tried to launch his own brand in the 1970s.
 
But some things have changed and the door appears to be opened wider than it has been in years. The nascent shift from internal combustion to electric power is offering significant opportunity, especially for companies hoping to ride the coattails of Tesla.
 
Up-and-coming EV makers can only hope to enjoy a fraction of the recent success of the California-based automaker — currently the most valued car company, measured by market capitalization — in the world. Ignoring a slew of naysayers — indeed, mocking a great many of them — the company has broken from the pack. Notably, Fisker, which debuted at the same time and was largely seen as a rival, became the biggest seller of electric vehicles in the U.S. and the world.
 
After starting with a small roadster with limited range, the company now offers four models, with a next-edition roadster in the works as well as a pickup truck and a semi-truck on the horizon. Its growth has been rocket-like in recent months, prompting the company to announce a five-for-one stock split in an attempt to make the shares "more affordable for employees and investors."
 
Not including Tesla, the list of EV startups is a long one, with some of the most promising thought to be Lucid, Detroit’s Rivian and Nikola. The latter firm took advantage of the latest means of raising lots of money fast, a "special purpose acquisition company," also known as a "blank-check company," allowing it to quickly list on a stock exchange. Fisker and Lordstown plan to use that strategy, too, later this year.
 
How many of these EV entrepreneurs will make it is far from certain, and the road to market is already littered with fallen brands such as AMP and Bright Automotive, while others, such as Faraday Future, are barely holding on.
 
"The jury is still out on the new electrics," said Brinley. "They’ve got a long way to go before we know if they really will be a presence."
 
Part of the challenge is that EVs currently account for barely 1% of the U.S. market. While many experts are forecasting a big surge this decade, that remains to be proven out and the start-ups will have to face down not only Tesla but the established automakers which are investing tens of billions each year in new electric models.
 
Not all the new brand entrants are going electric. Vantas is sticking with conventional automotive technology but hoping to follow the low-ball pricing strategy first used by the Japanese, and then the Koreans who followed to the U.S. in the late 1980s. If it sticks to its timetable, Vantas could become the first new marque dealing in Chinese-made vehicles — though it likely won’t be the last. There are plenty of carmakers which hope to make that leap, including Great Wall and BYD, the latter already setting up a U.S. headquarters in Los Angeles.
 
Peugeot this month confirmed its own plans to set up U.S. distribution though, in this case, it is looking to return after a nearly 30-year absence. It was one of numerous European brands to pull out of the States in the 1990s due to declining sales — and regretting that decision ever since. The brand hopes to get a boost as it returns, since it is one of the flagship marques for Groupe PSA, which is finalizing a merger with Fiat Chrysler Automobiles.
 
Whether it can pull off a revival is far from certain, however. FCA had little luck reviving the Fiat brand in the U.S. And it hasn’t done much better with the other Italian brand it relaunched, Alfa Romeo.
 
There’s another group of new-marques headed for U.S. showrooms. These are spinoffs of familiar brands, such as Volvo’s new all-electric Polestar, and Hyundai’s high-line Genesis.

 

Others more accurately are referred to as sub-brands. BMW’s all electric i was one of the first. Now, Ford is positioning the revival of its Bronco nameplate as the launch of a new family of vehicles that will be marketed independently – even though they will be sold out of existing Ford showrooms. Hyundai is taking a similar approach with Ioniq, a BEV sub-brand, as is Volkswagen with its battery-powered ID models.

 

"These sub-brands may be a temporary thing," said Sam Abuelsamid, principal analyst with Navigant Research, pointing to how Toyota originally positioned Prius as a sort of sub-brand with a "family" of hybrid variants. Today, Toyota is focusing on hybridizing virtually its entire lineup, and Prius sales have dropped to niche levels.

 

Overall, Abuelsamid said, some of the new brands will crack the code and enter the U.S. market but, "I suspect some of the (others) won’t come to fruition. I just don’t think the market will grow enough to support all these new entrants."

 

With its Lucid Air set to go on sale in the coming model year, Lucid Motors, a California-based EV maker, plans to unveil its first production model during a web event in September.
 
The startup is just one of a long list of new brands hoping to crack the U.S. market during the next several years, a list that also includes the likes of Fisker, Lordstown Motors, Faraday Future, Bollinger, Vantas, BYD, Great Wall and others.
 
The U.S. automotive market has long been a relatively closed club. While a handful of new brands have pried open the door in the past half century, far more have either shut down or walked away. But if even a fraction of these new entrants actually makes it into showrooms, American buyers soon will have more brands to choose from than at any time since World War II.
  
Automakers "have always wanted to get into the U.S. It’s a coveted market," said Stephanie Brinley, principal automotive analyst with IHS Markit. "It’s a difficult market to get into, but not impossible (though) it takes a lot of volume to be profitable."
 
During the past 120 years, the U.S. has seen more than 800 brands come and — mostly — go, according to the archives of the Henry Ford museum in Dearborn, Michigan. The vast majority of them popped up during the industry’s pioneering days, with names such as Chalmers, Maxwell and Duesenberg. The Great Depression wiped out hundreds of them. Others, such as Studebaker and Packard, struggled on through World War II but couldn’t generate the economies of scale needed in an increasingly costly business and were gone by the 1960s.
 
The post-War period did see the arrival of a new wave of import brands, including European marques such as Renault, Volkswagen, BMW and Mercedes-Benz, as well as Japanese players such as Toyota, Honda and Nissan. Even among them, many struggled. The 1990s kicked off a new exodus, with names including Renault, Peugeot, Fiat, Daihatsu and Suzuki falling by the wayside.
 
Detroit’s Big Three, meanwhile, have pared back. Ford dropped Mercury and the short-lived Merkur, while Chrysler — in its various incarnations — abandoned names such as Plymouth and Eagle. And, following its bankruptcy a decade ago, General Motors pulled the plug on Hummer, Pontiac, Saturn and Saab.
 
It’s not that there haven’t been plenty of wannabes. After World War II, industrial magnate Henry Kaiser hoped to launch his own brand, announcing at an industry confab that he was ready to back it up with a $100 million investment. "Give that man one white chip," responded GM’s then president. Kaiser didn’t last long, nor did Malcolm Bricklin, who tried to launch his own brand in the 1970s.
 
But some things have changed and the door appears to be opened wider than it has been in years. The nascent shift from internal combustion to electric power is offering significant opportunity, especially for companies hoping to ride the coattails of Tesla.
 
Up-and-coming EV makers can only hope to enjoy a fraction of the recent success of the California-based automaker — currently the most valued car company, measured by market capitalization — in the world. Ignoring a slew of naysayers — indeed, mocking a great many of them — the company has broken from the pack. Notably, Fisker, which debuted at the same time and was largely seen as a rival, became the biggest seller of electric vehicles in the U.S. and the world.
 
After starting with a small roadster with limited range, the company now offers four models, with a next-edition roadster in the works as well as a pickup truck and a semi-truck on the horizon. Its growth has been rocket-like in recent months, prompting the company to announce a five-for-one stock split in an attempt to make the shares "more affordable for employees and investors."
 
Not including Tesla, the list of EV startups is a long one, with some of the most promising thought to be Lucid, Detroit’s Rivian and Nikola. The latter firm took advantage of the latest means of raising lots of money fast, a "special purpose acquisition company," also known as a "blank-check company," allowing it to quickly list on a stock exchange. Fisker and Lordstown plan to use that strategy, too, later this year.
 
How many of these EV entrepreneurs will make it is far from certain, and the road to market is already littered with fallen brands such as AMP and Bright Automotive, while others, such as Faraday Future, are barely holding on.
 
"The jury is still out on the new electrics," said Brinley. "They’ve got a long way to go before we know if they really will be a presence."
 
Part of the challenge is that EVs currently account for barely 1% of the U.S. market. While many experts are forecasting a big surge this decade, that remains to be proven out and the start-ups will have to face down not only Tesla but the established automakers which are investing tens of billions each year in new electric models.
 
Not all the new brand entrants are going electric. Vantas is sticking with conventional automotive technology but hoping to follow the low-ball pricing strategy first used by the Japanese, and then the Koreans who followed to the U.S. in the late 1980s. If it sticks to its timetable, Vantas could become the first new marque dealing in Chinese-made vehicles — though it likely won’t be the last. There are plenty of carmakers which hope to make that leap, including Great Wall and BYD, the latter already setting up a U.S. headquarters in Los Angeles.
 
Peugeot this month confirmed its own plans to set up U.S. distribution though, in this case, it is looking to return after a nearly 30-year absence. It was one of numerous European brands to pull out of the States in the 1990s due to declining sales — and regretting that decision ever since. The brand hopes to get a boost as it returns, since it is one of the flagship marques for Groupe PSA, which is finalizing a merger with Fiat Chrysler Automobiles.
 
Whether it can pull off a revival is far from certain, however. FCA had little luck reviving the Fiat brand in the U.S. And it hasn’t done much better with the other Italian brand it relaunched, Alfa Romeo.
 
There’s another group of new-marques headed for U.S. showrooms. These are spinoffs of familiar brands, such as Volvo’s new all-electric Polestar, and Hyundai’s high-line Genesis.

 

Others more accurately are referred to as sub-brands. BMW’s all electric i was one of the first. Now, Ford is positioning the revival of its Bronco nameplate as the launch of a new family of vehicles that will be marketed independently – even though they will be sold out of existing Ford showrooms. Hyundai is taking a similar approach with Ioniq, a BEV sub-brand, as is Volkswagen with its battery-powered ID models.

 

"These sub-brands may be a temporary thing," said Sam Abuelsamid, principal analyst with Navigant Research, pointing to how Toyota originally positioned Prius as a sort of sub-brand with a "family" of hybrid variants. Today, Toyota is focusing on hybridizing virtually its entire lineup, and Prius sales have dropped to niche levels.

 

Overall, Abuelsamid said, some of the new brands will crack the code and enter the U.S. market but, "I suspect some of the (others) won’t come to fruition. I just don’t think the market will grow enough to support all these new entrants."

 

Two forecasters offered contrasting takes on U.S. auto sales for the rest of 2020 vary, one more optimistic and one more pessimistic, in separate webinar presentations this month.
 
The optimist is Tyson Jominy, J.D. Power vice president of data & analytics. During a webinar hosted by The Wall Street Journal, Jominy said a lack of new-vehicle inventory is the biggest factor holding back sales.
 
He acknowledges an increase in subprime delinquencies but said auto lenders are not "stacking" risk as they had in the run-up to the Great Recession, for instance, by offering long loans to subprime customers with large amounts of negative equity.
 
Provided automakers can ramp up production to meet demand in the fourth quarter, Jominy said sales have "a shot to get back to zero." That is, 0% change by the end of 2020 in monthly sales from a year ago.
 
The pessimist is Charlie Chesbrough, senior economist for Cox Automotive. He’s more worried about consumer willingness and ability to buy. During a webinar hosted by the American International Automobile Dealers Association, Chesbrough said business shutdowns and job losses this year have damaged the U.S. economy and consumer confidence so badly that it could be three or four years before auto sales recover to pre-pandemic levels.
 
"The key takeaway is, we’re still in a very, very difficult position economically," Chesbrough said. "Even though tens of millions of people were losing their jobs, the hope was that once everything opened back up again, all these jobs would be reopened, too, and everybody would get back to work."
 
Since then, businesses are running more efficiently with fewer people, less office space and less travel. Meanwhile, he said Wall Street is applauding the trend with higher stock values. "What we’re concerned with now is if all these furloughed employees are going to become permanent layoffs."
 
But both analysts concur on many points, too. They agree lease customers who have been extending their leases during the pandemic represent additional pent-up demand when they eventually return to the market.
 
Both also acknowledge inventory is a major problem for both new- and used-vehicle sales. The recent drop in new-vehicle sales means fewer trade-ins today, and fewer nearly-new used vehicles three years from now, Chesbrough said.
 
And both worry about the potential for a "W-shaped" recovery. That is, an uptick in COVID-19 cases could cause a repeat of widespread business shutdowns. Jominy calls that scenario "the elephant in the room." But he also argues businesses can recover more quickly because of their prior experience.