Auto Trade, Environmental Policy at Stake in U.S. Election
Automotive News reports that in an unpredictable year upended by the coronavirus pandemic and the resulting recession, next week's presidential election should answer at least one question: Who will shape the nation's policy affecting the auto industry over the next four years? Incumbent Donald Trump and challenger Joe Biden, though starkly different in campaign rhetoric and approach, do converge on some key issues: Both support the changes negotiated in the United States-Mexico-Canada Agreement, promote efforts to strengthen American manufacturing and bring back jobs, and say they'll take a harder line on China. Where they may differ is on trade and the environment. Read more here (Source: Automotive News).
Public Retailer Profit Surges in Q3
The coronavirus and its recession had nothing on the three biggest U.S. auto retailers in the third quarter, reports Automotive News. Thin inventory and strong demand sent gross profits soaring on both new and used vehicles for AutoNation Inc., Penske Automotive Group Inc., and Lithia Motors Inc., all of which reported record results with bottom-line increases topping 80 percent. "We do not have the inventory on the new side or the pre-owned side to meet the demand that's out there," AutoNation CEO Mike Jackson told investors last week. "So we've adjusted pricing to balance the situation." After the shock of forced shutdowns over much of the country — cushioned for many privately held dealers by forgivable federal loans — retailers reduced head count and streamlined processes to become more efficient. Asbury Automotive Group Inc., Group 1 Automotive Inc. and Sonic Automotive Inc. officially report results this week; all have said that profits will rise sharply. Read more here (Source: Automotive News).
Daimler and Renault News Signal an Auto Revival
Daimler AG raised its full-year profit forecast and Renault SA topped revenue estimates, the latest signs the global auto industry is emerging from its worst slump in decade, reports The Detroit News. Daimler, maker of Mercedes-Benz cars and trucks, now sees 2020 earnings before some items matching last year’s level, rather than declining. At Renault, sales of its battery-powered Zoe more than doubled in the third quarter, while orders rose and inventories fell. The upbeat news from two of Europe’s biggest automakers, which helped send the region’s car stocks higher Friday, follows better-than-expected results from BMW AG and Tesla Inc. The spotlight will move to Ford Motor Co., Volkswagen AG, and merging companies PSA Group and Fiat Chrysler Automobiles NV, as investors look to see whether their results confirm the trend. Read more here (Source: The Detroit News).
China Trade War Didn't Boost U.S. Manufacturing Might
President Trump’s trade war against China didn’t achieve the central objective of reversing a U.S. decline in manufacturing, economic data show, despite tariffs on hundreds of billions of dollars of Chinese goods to discourage imports. According to The Wall Street Journal, the tariffs did succeed in reducing the trade deficit with China in 2019, but the overall U.S. trade imbalance was bigger than ever that year and has continued climbing, soaring to a record $84 billion in August as U.S. importers shifted to cheaper sources of goods from Vietnam, Mexico, and other countries. The trade deficit with China also has risen amid the pandemic, and is back to where it was at the start of the Trump administration. Job growth in manufacturing started to slow in July 2018, and manufacturing production peaked in December 2018. An industry-by-industry analysis by the Federal Reserve showed that tariffs did help boost employment by 0.3%, in industries exposed to trade with China, by giving protection to some domestic industries to cheaper Chinese imports. Read more here (Source: The Wall Street Journal).
Hyundai Motor Swings to Quarterly Loss as Engine Issues Batter Earnings
Reuters reports that South Korea's Hyundai Motor Co. said on Monday it swung to a net loss for July-September, missing market estimates by a wide margin, as costs related to engine quality issues and recalls smashed what would otherwise have been strong earnings. Hyundai, the world's fifth-biggest automaker when combined with affiliate Kia Motors Corp. reported a net loss of 336 billion won (228 million pounds). The average of 12 analyst estimates complied by Refinitiv was 1.2 trillion won in profit. The automaker said it booked 2.1 trillion won to cover charges related to engine defects that increased the risk of stalling and fire. The years-long quality problems have cost Hyundai and Kia nearly $5 billion and left the pair subject to a probe by U.S. authorities over the manner of their recalls. Read more here (Source: Reuters).
Join Tomorrow's AutoTalk Webinar: Used Car Super Session
Join the next AutoTalk TOMORROW, October 27 at 2 p.m. EDT, where a panel will cover wholesale pricing and volume outlooks, as well as some best practices to stay ahead of the curve. Tune in to hear what some of the most successful dealer groups are doing to meet the shortage of used cars.
Guests will include:
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Tom Kontos, Chief Economist, KAR Global: To provide real-time wholesale pricing and volumes through the various auction channels, and outlook for the remainder of the year.
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Bob Grill, Senior Partner Development Manager at Carfax and Mike Rossman, Automotive Consultant: Will share some innovative and contemporary best practices to address the current used car sourcing challenges.
Around the Web
Auto Startups Chasing Tesla Race Past Red Flags to Go Public [Autoblog]
Bentley Will Be Put Under Audi's Control, Report Says [Automotive News]
How Aston Martin is Trying to Save Its Iconic Brand [CNBC]
Nikola, Hyundai, Toyota, Daimler Pursue Hydrogen Fuel Cell Trucks [USA Today]
