Car Dealers Push Online Sales to Make Up for Coronavirus Losses
With millions of Americans stuck at home, dealers and auto makers are giving their online car-selling operations a push in an effort to salvage some business as vehicle sales collapse and customers forgo service work and repairs, reports The Wall Street Journal. While the idea of buying a car online has largely failed to catch on, some in the industry are hopeful this time buyers might give it a try as large parts of the country shut down and people adjust to conducting more business remotely. AutoNation Inc. and Sonic Automotive Inc., two of the nation’s largest dealership chains, are pushing their online-retailing services, including sending sales associates to customers’ homes—where social-distancing regulations allow it—and adding new features to their websites that make completing more of the process over the internet easier for customers. Read more here.
Ford to Restart Some Plants in April; Toyota, Honda, Others Extend Closings
Ford Motor, Toyota Motor Corp., and Honda Motor Co. on Thursday updated plans to resume North American light-vehicle output, reports Automotive News. Ford Motor Co. will restart production at some of idled North American plants in early April. It expects to reopen a Hermosillo assembly plant in Mexico with one shift on April 6 and plans to restart production April 14 at Dearborn Truck, Kentucky Truck, Kansas City Assembly, and Ohio Assembly. Toyota, citing a decline in vehicle demand, said it will extend the shutdown of all light-vehicle and components plants in North America, including Canada and Mexico, through April 17, with output to resume April 20. The company planned to restart plants on April 6. Read more here.
Automakers Could See New Rollouts Delayed Because of Pandemic
As the coronavirus pandemic halts auto production and puts the economy into a spin, on edge with millions filing for unemployment, automakers are considering how it might delay new vehicles, reports The Detroit News. The uncertainty of when production will restart, what the economy will look like after the pandemic scare and how that affects demand for new vehicles is likely to lead to changes in how, when and to what extent automakers stay on schedule with new-vehicle programs, especially those further out. "We are going to see some of the electrification programs delayed just as they try to push off some spending," said Sam Abuelsamid, automotive analyst at Navigant Research. "Stuff that is already in progress they will try to continue and keep as close to on schedule as they can." Industry-wide, Abuelsamid believes cuts will have to be made to some of the automakers' electric and autonomous plans because of their high cost, low gas prices, an impending recession and slumping auto sales. Read more here.
GM Temporarily Cuts Pay By 20% for 69K Salaried Workers
Amid Coronavirus PandemicGeneral Motors on Thursday told its entire salaried workforce — about 69,000 employees — it will temporarily cut 20% of their salaries as the automaker attempts to save cash to weather the coronavirus crisis. According to CNBC, the reduced pay, which begins Wednesday, will be repaid in a lump sum with interest no later than next March 15, according to a list of actions announced by the company obtained by CNBC. About 6,500 U.S. employees who cannot work from home will go on paid leave, which the company is calling a “salaried downtime paid absence.” The workers will receive 75% of their pay, keep seniority and retain health benefits. In addition to the 20% salary deferral for white-collar workers, executives are also taking cuts of 5% or 10% to their cash compensation, excluding bonuses, stock options or other incentives. The GM board will take a 20% reduction in total compensation. Read more here.
Toyota Seeks $9 Billion Credit Line, Reports Say
Toyota is seeking a 1 trillion yen ($9 billion) line of credit from Sumitomo Mitsui Banking Corp. and MUFG Bank Ltd., people familiar with the matter said, as the automaker ensures it has ample funding if necessary with the coronavirus pandemic intensifying across the world. Although Japan’s biggest automaker has the strongest credit profile among the country’s car manufacturers, its cost of credit is going up, reports Automotive News. On Thursday, Moody’s Investors Service cut Toyota’s credit rating to A1 from Aa3, and put it under review for a further downgrade. The rating firm also downgraded the ratings of other global auto giants. Kyodo News reported on the credit line earlier on Friday. “We continually evaluate our funding needs,” said Kensuke Ko, a spokesman for Toyota. “At this moment nothing has been decided regarding the report.” Read more here.
Webinar: Federal Stimulus Information – How the Program Can Benefit You and Your Employees
Join AIADA's AutoTalk on Monday, March 30th at 2:00 p.m. EDT to hear Part Two of our COVID-19 series as experts from Moss Adams Automotive and Dealer Services Group talk to the Federal Stimulus package and explain how the program can benefit you and your employees.
Topics covered include:
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Latest information on Federal stimulus package and key tax provisions
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Small Business Administration Loan Programs
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Federal tax filing and payment deadline relief
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Tax Update on The Families First Coronavirus Response Act
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