AIADA Joins Groups Asking for Liability Protections During Pandemic

First Up 05/28/20

AIADA Joins Groups Asking for Liability Protections During Pandemic

Auto dealers are navigating new challenges and liability concerns related to the coronavirus as they reopen their doors to customers, reports Automotive News. The American International Automobile Dealers Association has joined a growing list of trade associations and other groups calling for Congress to pass temporary and targeted liability relief legislation related to the coronavirus pandemic. In a letter sent Wednesday, more than 200 groups urged members of Congress to "enact temporary liability protections for businesses, nonprofit organizations and educational institutions that work to follow applicable public health guidelines against COVID-19 exposure claims." The groups also are asking members to protect health care workers and facilities providing critical care and services; manufacturers, donors, distributors and users of personal protective equipment and other supplies; and public companies "targeted by unfair and opportunistic" securities related to the coronavirus. Read more here. 

Nissan to Cut Production Capacity by 20% After Suffering Worst Year Since 2009

Nissan committed on Thursday to slashing production capacity by 20% and closing a plant in Spain as part of a sweeping overhaul announced after the Japanese carmaker revealed its first annual operating loss in more than a decade, reports CNN Business. The company posted an operating loss of 40.5 billion yen ($376 million) for its fiscal year ended in March, compared to an operating profit of 318 billion yen ($2.9 billion) for its previous fiscal year. It was the company's worst performance since 2009. More pain could be on the way. Given the uncertainty surrounding the coronavirus pandemic, "it is difficult to reasonably forecast an outlook for fiscal year 2020 at this time," CEO Makoto Uchida said at an earnings presentation on Thursday The announcements come one day after Nissan, Renault, and Mitsubishi said they would deepen their alliance. The companies will make fewer models, share production facilities and focus on the existing geographic and technological strengths of each carmaker as they try to slash costs and ride out the coronavirus pandemic. Read more here. 

Automakers' Catch-Up Plan? Skip Summer Breaks

American Honda, BMW, and Mercedes-Benz are canceling their traditional summer factory downtime at U.S. and Canadian plants in order to boost vehicle inventory as sales improve thanks to easing stay-at-home guidelines. Automotive News reports that the automakers are eager to replenish inventory after their factories were idled for several weeks in accordance with government coronavirus rules. Detroit 3 automakers have until next week to notify the UAW of planned changes in their own production calendar. Full-size pickups, in particular, have seen falling inventories as sales have remained surprisingly brisk during the lockdown. Honda lost seven weeks of production from March 23 to May 11 as factories across North America shut down to reduce coronavirus transmission. Now it is adding production days on June 27, 29 and 30 that had previously been designated as days off for plant workers, the company said in an email to Automotive News. BMW said it has canceled its planned break June 29 to July 2 and will build for most of that week at its plant in Spartanburg, S.C. July 3 remains a factory holiday. Read more here. 

May Sales to Drop as Fleet Sales Collapse

Automakers are looking at 32% sales decline in May, exacerbated by the drop in fleet sales led by rental car companies not buying new vehicles, reports The Detroit Bureau. New vehicle sales are expected to drop by almost a third in May, dragged down by the collapse of fleet sales highlighted by the recent bankruptcy by Hertz. ALG Inc., a subsidiary of TrueCar Inc., expects new vehicle sales will reach 1.008 million units in May 2020, down 32% from a year ago. This month’s seasonally adjusted annualized rate for total light vehicle sales is an estimated 11.8 million units, a level last seen during the Great Recession. Excluding fleet sales, ALG expects U.S. retail deliveries of new cars and light trucks to be 1,008,916 units, a decrease of 21% from a year ago. Fleet sales, one the other hand, are expected to drop 21%. Rental companies, led by Hertz, have stopped buying new vehicles in response to the collapse of the travel industry and state and local governments are being forced to rein in spending for police cars, vans and other vehicles as they cope with the fallout from the pandemic. Read more here.  

U.S. States Sue Trump Administration Over Fuel Economy Rollback

A group of 23 U.S. states and the District of Columbia filed a lawsuit on Wednesday challenging a Trump administration decision to weaken Obama-era fuel efficiency standards, reports Reuters. In March, the administration issued final rules requiring 1.5% annual increases in vehicle fuel efficiency through 2026 - far weaker than the 5% increases set under former President Barack Obama. The Trump administration also abandoned its August 2018 proposal to freeze requirements at 2020 levels through 2026. New York City, Denver, San Francisco, and Los Angeles are joining the challenge by California, New York, Illinois, Massachusetts, Michigan, Nevada, and 17 other states. Separately, 12 environmental groups including the Environmental Defense Fund, Sierra Club, and Union of Concerned Scientists also sued over the rules. Read more here. 

Webinar Today: Today's Wholesale Market – Will the Buyers and Sellers Return?

Join Tom Kontos, Senior Vice President and Chief Economist at KAR Global, today at 2:00 p.m. EDT for a data driven, real-time look at today’s wholesale car market, part of AIADA's AutoTalk COVID-19 webinar series.

Today at 2:00 p.m. EDT, Tom will discuss:

  • What is the duration and impacts to the wholesale market from COVID-19

  • Wholesale used vehicle price, volume and conversion rate trends pre- and post- COVID pandemic onset

  • Possible wholesale supply patterns for off-rental, off-lease, off-fleet repo and dealer consigned units

Click here to register

Around the Web

Mitsubishi Recalls 141K Lancers, Outlanders, and Outlander Sports [Autoblog]

Despite the COVID-19 Pandemic, a Small Car Manufacturer is on the Rise [Forbes]

Tesla Price Cuts Show Realism in Face of Coronavirus Slowdown [CNBC]

Subprime Borrowers Getting Fewer New Car Loans [WardsAuto]

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