Mazda's 2% Solution

First Up 05/15/17

Tax Reform Shapes Up on Capitol Hill 
The Hill reports that House Speaker Paul Ryan (R-Wis.) on Sunday said Congress is likely to pass a major overhaul of the tax code by the end of the year, but cautioned that Republicans "don't want to put an artificial deadline" on reform. "We don't want to put an artificial deadline on tax reform because we want to get it right," Ryan told radio host John Catsimatidis. "So this is really a plan for 2017, and we are convinced that we can get this done in 2017 so that the economy can really start to take off." Ryan also defended his proposal for a border adjustment tax. President Trump floated the idea as a candidate, but his administration has since backed away from such a tax. Treasury Secretary Steve Mnuchin also cast doubt on the idea last month, saying administration officials "don't think it works in its current form." Click here to find out why the border adjustment tax doesn’t add up. For the latest on Speaker Paul Ryan’s comments on tax reform, click here.

Mazda's 2% Solution 
There's 2 percent. And then there's a "good" 2 percent. According to Automotive News, that's how Mazda's North American chief frames the objective of the brand's "Mazda Premium" strategy, a potentially 10-plus-year journey to elevate its image in a way that brings higher brand loyalty and dealer profits. Masahiro Moro said the Japanese automaker wants to transform Mazda's roughly 2 percent U.S. market share into a "good" 2 percent that commands higher average transaction prices with lower incentives, and he wants to offer a better customer experience. "I am not comfortable with 2 percent. I'm comfortable with a good 2 percent," he said last week during an interview here. "A good 2 percent means our dealer network becomes profitable and becomes sustainable." He stressed that the goal is to have the overall network's profits "steadily increase" through improved customer experience efforts and brand loyalty. For more, click here.

Rising Inventories Due Mostly to GM 
The combined inventories of all automakers except GM rose just 0.6 percent in April. Inventories of unsold vehicles have been essentially flat across the U.S. auto industry in the past year, with one notable exception: General Motors. According to Automotive News, GM's inventory as of May 1 reached a 9.5-year high, up 37 percent from a year ago. The inventories of all other automakers combined rose just 0.6 percent. GM, with U.S. market share of 17.1 percent so far this year, now accounts for 22 percent of total industry inventory. With auto sales slowing and discounts already at heights unseen since the recession, GM has waded into territory that could spell trouble if its forecasts prove too optimistic. "The inventory build leaves some question as to whether GM might see payback later in the year," Barclays Capital analyst Brian Johnson wrote in a recent report, "either via higher incentives or production cuts, which would reduce earnings upside." For more on GM’s rising inventory, click here.

U.S. Used-Car Glut is a Dealer's Dream, Automaker's Nightmare 
The deluge of used cars is good news for used-car dealers, auto auction houses, and car buyers, who stand to benefit from a bountiful supply of high quality, off-lease vehicles rolling into the U.S. market, reports Reuters. By the end of 2019, an estimated 12 million low-mileage vehicles are coming off leases inked during a 2014-2016 spurt in new auto sales. That's helping independent dealers such as Reel, who can turn a quick profit on vehicles bought cheaply from auction companies. Big players like AutoNation also aim to benefit from selling late-model vehicles at a discount versus brand new cars. Consumers seeking great deals are in luck. Used-vehicle prices at auction fell about 3 percent last year, according to Carmel, Indiana-based KAR Auction Services Inc (KAR.N), which facilitated the sale of 5.1 million used and salvaged vehicles in 2016. Used prices should drop around 3 percent annually for the next couple of years, according to KAR's chief economist Tom Kontos. For more on the used car glut, click here.

Lyft, Waymo Strike Self-Driving Car Deal as Uber Rivalry Intensifies 
The company that began as Google's driverless car project has reached a deal to collaborate with ride-hailing app Lyft on tests of self-driving vehicles, reports USA Today. The deal intensifies the bitter rivalry between Waymo, a division of Google parent Alphabet, and ride-hailing market leader Uber. It also gives Lyft a powerful new ally in the self-driving car race against its more well-funded adversary Uber. And it places Waymo a step closer to becoming a business with real-world customers. Although details of the alliance between Waymo and Lyft were not released, the deal is expected to involve a pilot program in which consumers will ride in vehicles equipped with Waymo's self-driving system. "Lyft’s vision and commitment to improving the way cities move will help Waymo’s self-driving technology reach more people, in more places," Waymo said in a statement. For more, click here.

Around the Web

Amazon to Debut Detailed LeMans Documentary [MotorAuthority

2018 Honda Odyssey as a Mobile Parenting Tool [Autoblog

These Are the 10 Fastest Police Cars in America [Business Insider

What Do Car Consumers Really Want? [WardsAuto

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