Car Leasing Plummeted During Pandemic, Could Take Years to Recover
Vehicle leasing — once a path for nearly one-third of American buyers to get behind the wheel of a new car — has faded since the pandemic. Now it is likely to be years before the U.S. lease market returns to normal, executives and analysts say. The leasing falloff is largely tied to the vehicle shortage that has plagued the car business for more than two years. Auto makers generally make more money selling cars outright, rather than leasing them, which typically involves a heavier subsidy from the manufacturer, reports The Wall Street Journal. With inventory constrained, car companies have significantly dialed back attractive lease deals that had been a staple of auto retailing. Auto makers are unlikely to revert to more-generous lease terms until vehicle availability rebounds closer to pre-pandemic levels, executives and analysts say. Even then, the relative dearth of people who leased cars in recent years will produce a lag effect, drying up what is normally a steady stream of customers returning to dealerships. It could take the better part of this decade for the lease market to normalize, some analysts say. Click here for the full story.
Toyota to EV-Only Extremists: Science Says You're Wrong
Toyota Motor Corp. has come under fire for what critics call foot-dragging on pure electric vehicles. Now the world's biggest automaker is fighting back with its most robust retort. Its message to those who say EVs are the only way forward in the global battle to cap carbon dioxide emissions: Science says you're wrong. Automotive News reports, Toyota is rolling out new facts and figures to back its strategy of taking a multipronged approach, blending EVs with hybrids and other green technologies. Toyota insists new data shows that EV-only strategies, all the rage in some corners, fall short. Toyota's Chief Scientist Gill Pratt made that pitch in a presentation at the World Economic Forum in Davos this month. More recently, he repeated the message from Tokyo. "Time will show that our point of view is actually the correct one," Pratt said at a roundtable here. "One way or the other, there will be a diversity of powertrains used throughout the world." Click here for the full story.
Survey Shows Dealers Increasingly Worried About the Economy
Dealers are increasingly worried about the economy and the possibility of recession even as improving inventory levels have them more optimistic about the new-vehicle business in 2023. Dealership executives who answered Automotive News’ 2023 Dealer Outlook Survey say economic conditions that took root in the last year have caused their concerns about maintaining profits to grow. Several now believe rising interest rates and a potential recession, on top of intensifying vehicle affordability challenges, could ultimately disrupt their business this year. “We’re in an affordability crisis,” said Patrick DiCesare, dealer principal of Eastside Volkswagen in Willoughby Hills, Ohio, a suburb of Cleveland. Eastside Volkswagen’s customers are largely driven by budget and payments and have historically gravitated to the leasing market, DiCesare told Automotive News. But with some lease payments up 50 percent for the same product compared with years past, customer demand is cooling, he said. The 264 dealers and dealership managers who answered Automotive News’ survey in January have mixed outlooks. Click here for the full survey results.
Nissan Ariya’s U.S. Allocation to Be Limited This Year
U.S. supplies of the all-electric Nissan Ariya will be limited this year despite the car having already been delayed from its initial planned launch of mid-2021. During a recent National Automobile Dealers Association meeting, the company told dealers that Ariya supplies would be limited due to high battery material costs. Carscoops notes that many of the retailers who attended the meeting were eager to know why they aren’t receiving more units this year. Nissan has not said how many Ariya models will be allocated to the U.S. this year, although an unnamed source claims that some 6,000 units were allocated for fiscal 2022 which ends on March 31, 2023. Nissan Dealer Advisory Board chairman Tyler Slade, who is also an operating partner at Tim Dahle Nissan Southtowne in Salt Lake City, says his store has received interest from 100 customers for the Ariya and noted that it has started accepting deposits. “Every dealer was saying how many customers they have waiting or wanting to order one,” Slade said. Click here for the full story.
Vehicle Sales Up for January Despite Ongoing Challenges
With talk of recession widely circulating as well as rising interest rates and prices driving up monthly payments, sales of new vehicles are expected to hold steady, if not rise a bit in January, sparking optimism about the outlook for the rest of the year and production increases. January new vehicle sales are expected to rise, largely due to fleet sales results, reports The Detroit Bureau. Thomas King, president of the data and analytics division at J.D. Power, noted in a new forecast, supply chain disruptions continue but are becoming less severe. “This is leading to an increase in the number of vehicles being delivered to dealerships and fleet customers,” he said, noting inventory remains above 1 million units for the fourth consecutive month. “This year is off to an encouraging start from an inventory and sales standpoint. Retailer profitability is softening as expected but remains well above historical norms. Looking forward to February, the industry sales pace will continue to be inventory constrained despite improving production levels.” Click here for the full story.
High-Tech and High Touch: Enterprise on Meeting Changing Consumer Expectations
Enterprise is well known for its hallmark customer service and the tagline, “we’ll pick you up.” What many people may not know is the decades-old tagline started as a branch manger’s idea to help customers by providing them with a free ride to rental locations. Enterprise listened and the employee’s idea soon became a companywide success and one of Enterprise’s distinguishing features. This is just one example of how founder Jack Taylor’s business philosophy, “take care of your customers and employees first and the rest will follow,” drives the company.
Decades later, Enterprise is still listening to employees and customers to determine innovative ways to meet customers’ evolving needs. A recent study conducted by Enterprise showed that customers want seamless interactions and the choice to come in and out of technology as it is convenient to them. Enterprise recognizes the importance of adapting to change by adopting new technology. But redefining the customer experience must involve listening and responding to what customers actually want. As Jack Taylor knew – that’s the basis for everything that follows.
Learn more about Enterprise’s vision for the future in this video clip of CEO Chrissy Taylor.
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