Auto Supply Pinch Likely Held Back Retail Spending in May
Shoppers likely pulled back on auto purchases last month while boosting spending on other items and at restaurants, as more people got vaccinated against Covid-19 and business restrictions were further eased, reports The Wall Street Journal. Economists estimate that Tuesday’s Commerce Department report will show that overall retail sales declined 0.6% in May. They expect that sales excluding autos rose a solid 0.5% from a month earlier. Stronger overall spending is helping propel the broader U.S. economy, which grew at a 6.4% annual rate in the first quarter. Economists project that by the end of this year gross domestic product will reach the path it was projected to follow had the pandemic never happened—and then exceed it, at least temporarily. Vehicles, however, are in short supply as a global computer-chip shortage has left car dealers with a dearth of inventory. As a result, auto sales likely fell last month. Read more here (Source: The Wall Street Journal).
Jaguar Land Rover to Test Defender Fuel Cell Prototype
Jaguar Land Rover will begin testing a hydrogen fuel cell electric vehicle prototype later this year based on the Land Rover Defender, the company said. According to Automotive News, the vehicle will be developed using technology and input from partners including engine specialist AVL and Marelli Automotive Systems. The concept will be partially funded by an 8.7 million pound ($12.3 million) grant from the UK’s government-supported Advanced Propulsion Centre, which aims to support development of future automotive technologies in the country. Jaguar Land Rover said in 2019 it was looking at fuel cells as an alternative to battery-electric powertrains as a way of powering its heavier Land Rover SUVs. The concept is part of JLR’s push to achieve zero tailpipe emissions by 2036, and net-zero carbon emissions across its supply chain, products and operations by 2039. Read more here (Source: Automotive News).
Hyundai, GM Serious About 'Flying Car' Effort
Hyundai Motor Co and General Motors Co said on Monday they are pushing ahead with developing flying cars, with the South Korean company expressing optimism it could have an air-taxi service in operation as soon as 2025, reports Reuters. A GM executive said it could take until 2030 for air-taxi services to overcome technical and regulatory hurdles and reach commercialization. The zero-emissions aircraft, which take off and land like helicopters and carry passengers and cargo, are being developed by a number of startups as well as aircraft makers and automakers, but they face a long road to profitability. read more Hyundai is ahead of its previously stated timetable for rolling out air-mobility vehicles, Jose Munoz, the company's global chief operating officer, said in an interview broadcast on Monday at the Reuters Events Car of the Future conference. Read more here (Source: Reuters).
Ghosn Pledges Lengthy Fight to Clear His Name
Fugitive former auto executive Carlos Ghosn said on Monday he was prepared for a lengthy process to clear his name with French authorities, and vowed to challenge an Interpol warrant that is barring him from travel outside of Lebanon. The architect of the Renault-Nissan auto alliance has been fighting multiple probes since fleeing to Lebanon from Japan in late 2019, and has said he hopes to clear his name in financial misconduct cases against him. Ghosn was chairman of both Nissan and Mitsubishi and CEO of Renault when he was arrested in Japan in 2018 on charges of under-reporting his salary and using company funds for personal use. He has denied wrongdoing. Read more here (Source: Automotive News).
Hyundai Plant in Alabama Pauses Manufacturing Due to Car Chip Shortage
No new vehicles will be rolling off the floor at Hyundai Motor Company in Alabama this week due to a temporary shutdown caused by an ongoing global semiconductor shortage, reports NPR. The South Korean automaker's Montgomery-based manufacturing facility employs roughly 3,000 people. Robert Burns, a spokesman for Hyundai Motors Manufacturing Alabama, told WFSA, that between 800 to 900 employees will be impacted by the week-long shutdown that began Monday. The stoppage in Alabama is the latest production interruption caused by the semiconductor industry hit hard by the coronavirus pandemic. Other carmakers, from Ford to Porsche, have also had to press pause on manufacturing. Read more here (Source: NPR).
Federated Insurances' Claim of the Month: Could It Happen to You?
An auto dealer hired a general contractor to complete building renovations. The general contractor utilized a modular building for limited, temporary operations on the dealership’s property. While construction was ongoing, someone assaulted one of the dealership’s customers in the modular building during the daytime. The contract in place with the general contractor did not have language that required the contractor to indemnify the dealership, nor was the dealership an additional insured under the general contractor’s insurance policy.
CLAIM AMOUNT: $450,000.00
Claim advice:
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Obtain a certificate of insurance from any contractor working on premises to confirm adequate limits of insurance.
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Consider requesting additional insured coverage from contractors working on premises.
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Have qualified counsel review any proposed contracts to be entered into for work being completed on premises in order to confirm hold harmless and indemnity agreements are as discussed and agreed to.
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In addition to the above, consider enhancing your dealership’s security presence in high crime locations. Construction activity can attract unwanted individuals to the premises.
Visit federatedinsurance.com or contact your local marketing representative for resources you can use to create or enhance your own risk management program.
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