Latest news with #MarkWakefield
Forbes
30-06-2025
- Automotive
- Forbes
Tariffs May Add Almost $2,000 Price On Average, But It's A Wide Range
Vehicles queued up for export in Bremerhaven, Germany. New tariffs on imported vehicles and auto parts are likely to raise the consumer cost per new vehicle by an average of almost $2,000, but that average includes a very wide range for specific vehicles, from less than $1,000 to as much as $5,000, depending on where vehicles and their parts come from, according to an analysis from AlixPartners. 'We don't think it will be spread out evenly,' said Mark Wakefield, Global Automotive Market Lead at AlixPartners. The impact is also likely to be difficult to attribute directly to tariffs, Wakefield said in a phone interview. Manufacturers will likely avoid adding a line item on the price tag, specifically for tariffs, he said. Rather, the effects are more likely to be passed along in the form of higher or lower incentives, or more or fewer product features. 'Manufacturers Suggested Retail Price will probably be the last thing we see change,' Wakefield said. 'It's incentives, finance rates, dropping residuals,' which will change instead, he said. Manipulating residual values on leases is a common way for manufacturers to raise or lower monthly payments without changing the sticker price, and without advertising the change as blatantly as the presence or absence of a cash rebate would, or a cut-rate loan on a purchase. In leasing, the customer finances the difference between the up-front price of the vehicle, minus the residual value, an estimate of how much the vehicle will be worth at the end of the lease. A higher residual value means the customer has to borrow less. A lower residual means the customer has to borrow more. In a separate analysis, from J.D. Power and Global Data, analysts said vehicle prices are expected to rise overall, but less than the full amount of the tariff-related increase. 'It will likely be at year's end before manufacturers' new pricing and incentive strategies fully materialize,' the two firms said in a joint forecast.
WIRED
25-02-2025
- Automotive
- WIRED
Ads Popped Up on Drivers' Screens. There May Be More on the Way
Feb 25, 2025 7:33 AM When Jeep owners complained ads were appearing while driving, the carmaker said it was a glitch. But as auto makers consider connected car opportunities, in-vehicle selling might be too tempting to ignore. Photo-Illustration: Wired Staff; Getty Images Last week, a Jeep driver turned to Reddit to do what people do best on the site—complain. Every time they hit the brakes on their Jeep, they wrote, a promotion for an extended warranty plan popped up in the center console. 'Press the 'call' button to speak to a specialist,' they say the ad encouraged, welcoming the user to use their Bluetooth connection to complete the upsell then and there. Ads are annoying and occasionally insidious; an ad that repeatedly appears inside one's own car more so. According to other online posts on Reddit and Jeep forums, the issue goes back several years, affecting several models of Jeeps. Stellantis, which owns Jeep, says the repetitive nature of the promotion was a glitch. 'This is an isolated incident affecting fewer than ten vehicles at this time limited to the US,' Dan Reid, a spokesperson for the automaker, wrote in a statement. He acknowledged, though, that Stellantis shows other drivers in-vehicle promotions too. Dodge owners, for example, get an infotainment push after 60 days of purchase offering the 'Dodge Complete Performance Package,' a comprehensive warranty offering.' Stellantis says that, on average, customers receive about two in-vehicle messages annually, containing safety, maintenance, or marketing information. Should ads be showing up inside cars at all? Safety experts have serious questions about the practice. But as automakers continue to explore how to make more money off their increasingly digitized and internet-connected wheels, the temptation to upsell on the center console may be too good to pass up. The Data-Powered Upsell Today's new cars come stuffed with some 1,000 to 3,000 semiconductor chips that help to control and coordinate everything from lowering windows and adjusting mirrors to deploying airbags, enabling collision avoidance systems, pairing phones with center consoles and displays, and coordinating navigation. Add in the internet and drivers' cell phones, and you get an ongoing "conversation" of data between individual cars and the manufacturers that build them. Those manufacturers' vision of the future has been pretty consistent over the past few years, says Mark Wakefield, the global automotive market lead at consulting firm AlixPartners. 'In an ideal world, they've totally blended the mobile phone and different services and apps into a nice, big coherent ecosystem that travels from work to play to home,' he says. It's the perfect platform for advertising, for upselling, and for pushing premium trimmings. As with Jeep's extended warranty offer, many services can show up with just a remote software push. Selling a car is a tight margin business; selling software-enabled features, less so. AlixPartners research estimates the connected vehicle services market will be worth more than $473 million globally this year, accounting for 11 percent of automotive revenue streams. By 2032, it could be worth $1.68 billion—more than a quarter of manufacturers' revenue. Some of these software-related plays have already worked out for automakers. General Motors brought in some $2 billion in revenue last year from OnStar, its subscription-based security and entertainment services division, and executives are sticking with a prediction first made in 2021 that the automaker will eventually make more than $20 billion annually in software-related revenue. Customers have already shown that they're willing to shell out a few bucks for services that heats or cools drivers' cars before they get in, or turn on the garage lights when they get back home. Other software plays have not worked well at all. General Motors settled a lawsuit this year with the US government after allegations it collected, used and sold drivers' data without their consent. Customers were horrified when BMW offered to turn on drivers' seat heaters for a monthly fee. (The subscription was available in a handful of countries, including the UK, Germany, and South Korea.) The automaker discontinued the program after an outcry. These experiences suggest there's a limit to customers' patience for data-enabled auto add-ons, and the advertisements automakers use to promote them. 'The guy in the black turtleneck with the frameless glasses in the design studio still thinks the extended digital environment in the vehicle is going to happen,' says Wakefield. 'The customer service rep probably thinks it's never going to happen.' The question is how long drivers are willing to put up with being trapped in their cars with tiny, digital car salesmen before they all take to Reddit—or buy different vehicles altogether. Driven to Distraction Safety advocates, meanwhile, say any kind of in-car screen pop-up can be dangerous. 'People's attention can be easily pulled by that sort of thing, and it's vitally important that the demands on drivers' attention be kept in check,' says William Wallace, who directs safety advocacy at Consumer Reports. He calls a snafu like Jeep's alleged glitch "unacceptable.' Auto safety research suggests that when messages are sent to a car's infotainment systems, and how long they're displayed, determines whether they're safe, says William Horrey, a technical director with the AAA Foundation for Traffic Safety. Generally though, 'messages sent during any driving trip can be detrimental to safety as they pull drivers' eyes away from the roadway,' he writes in an email. Even messages that draw drivers' eyes away from the road—and potential road hazards—during a red light can lead to accidents, both because drivers can start driving again with being fully aware of their surroundings, and because research shows that the effects of distraction can linger even seconds after drivers' eyes return to the road. Stellantis didn't respond to questions about promotion messages and road safety. Neither did the National Highway Traffic Safety Administration, the US' top road safety regulator, though it published guidance more than a decade ago suggesting that displaying images or video unrelated to driving or requiring reading of more than 30 characters of text 'inherently interfere with a driver's ability to safely operate the vehicle.' Nathan Proctor, who follows auto issues as the senior director of US Public Interest Research Group's right to repair campaign, says the Jeep ad snafu points to the need for wider reform in the internet-of-autos sector. 'I think we should have a mandatory internet off switch in cars,' he says. 'What am I getting out of my car being connected to the internet? I get cybersecurity risk, privacy invasion, they can subpoena info from my car.' So far, the switch doesn't exist. Maybe some drivers really want the opportunity to buy a cheaper extended warranty. Proctor says it's far from worth the tradeoff.
