Cody Lusk Talks Tariffs, Trade, and Tesla with CBT News
It’s never a dull moment in the auto retail industry and so far this summer, there have been a lot of new developments to the stories we’ve been watching closely. To get an expert pulse on these events, CBT News turns to Cody Lusk, President and CEO of AIADA. Today, we’ll discuss the popular, ongoing industry topics that are currently making headlines like tariffs, trade, and Tesla. “The cloud of uncertainty is really hanging over the heads of the auto sector, and we met several weeks ago with a lot of different manufacturers. And even though the tariffs haven’t been imposed, just the threat is creating this uncertainty in this business climate and the economy that’s not really going as great as it once was, that’s causing some real concern amongst the automakers.” Watch the rest of Lusk’s interview with CBT News here.
Hyundai Poised for Long-Awaited U.S. Pickup
Hyundai Motor Co. expects to enter the U.S. pickup market soon with what’s likely to be an American-made vehicle aimed at luring buyers who aren’t traditional truck owners, an executive said Monday, reports Automotive News. “It’ll be a very versatile vehicle,” Michael O’Brien, vice president of product, corporate and digital planning for Hyundai’s U.S. unit, said in an interview. “That has the promise of creating a whole new class of buyers.” The South Korean automaker won’t say when it will roll out a pickup or provide details on its specifications. But Hyundai first provided clues of what it will look like 4 1/2 years ago, when it debuted a truck concept called Santa Cruz at the Detroit auto show. Hyundai's U.S. dealers have been enthusiastic about the vehicle for several months. Read more here.
Are Automakers the New Value Stocks?
Ford Motor Co. and General Motors Co. possess an unusual pairing of superlatives: The automakers boast two of the highest dividend yields in the S&P 500 while also having two of the lowest price-to-earnings ratios on a forward-looking basis, reports The Wall Street Journal. The two motor companies were battered heading into 2019, hurt by sluggish auto sales and fears of exposure to simmering trade tensions with China. Another overhang for the duo: higher interest rates, which make it more expensive for consumers to borrow money to buy cars. Ford finished 2018 down 39%, while GM’s stock lost 18%, compared with the S&P 500’s 6.2% decline. So far this year, automakers have recovered in step with the broader stock market. GM shares have rallied 14%, while Ford is up 33%. In addition to some progress in China-U.S. trade talks, the headwind of higher rates has largely dissipated, with interest rates falling and the yield on the 10-year U.S. Treasury note dipping below 2%. Read more here.
Why Fiat's Classic Italian Cars Are Struggling in the U.S.
Fiat faces a difficult future in the U.S., less than a decade after an attempted comeback, reports CNBC. The Italian car brand and arguable style icon is suffering from extremely low sales in a market that has less and less interest in the tiny cars that has made it famous. In 2018, Fiat sold more than 15,000 cars in the U.S., down from a high in 2014 of over 46,000. When the brand had first returned to the U.S. in 2010 after a 27-year absence, Fiat Chrysler and the late Sergio Marchionne, who served as CEO, had hoped to sell 50,000 Fiats in the country in its first year. “I think [Marchionne] wanted the Fiat 500 to be the Volkswagen Beetle of the Fiat brand,” said Jeff Schuster, president of global forecasting for LMC Automotive. “It has a history, it has a cult following to a degree. It is not just another small car. The brand wanted to connect with those buyers who remember the history of the 500.” But it did not have a Beetle-like impact. Read more here.
Ford, VW Preparing to Lock Down Expanded Alliance to Focus on EVs, Autonomous Vehicles
Volkswagen and Ford have effectively locked down the details of a major new alliance that will see them work together on the development of autonomous and electrified vehicles, reports The Detroit Bureau. The two automakers launched a joint venture in January focused on commercial vehicles and, at the time, confirmed they would look at other opportunities, including electric and self-driving vehicles. According to Reuters, the German automaker’s supervisory board is expected to consider the deal when it meets later this week, with Ford’s board of directors also expected to weigh in shortly. Sources have confirmed that scenario to TheDetroitBureau.com, as well. Officially, the two automakers continue to say only that talks are proceeding. It is not clear when a formal announcement will be made. Read more here.
Wells Fargo Dealer Desk Gives Your Business a Lift
Wells Fargo Auto announced it launched a new Dealer Desk team to support the administrative needs of its dealer customers. The Dealer Desk is a dedicated group, available nationally, created to help manage book sheet discrepancies, titles, dealer reserve statements, aftermarket cancellations, lien release and unwinds for dealers.
The Dealer Desk first launched as a pilot in January and started the national roll out in March. Since then, Wells Fargo Auto expanded the service to additional markets with the goal of creating a more streamlined and consistent experience for dealer customers.
“We want to keep finding ways to enhance our dealer customers’ experience and Dealer Desk is an example of that,” shared Eric Halvorson, head of Wells Fargo Auto Customer and Team Member Excellence. “Initial feedback has been positive and we’ll continue to look for opportunities to refine and expand the processes we offer dealers through this new service channel, so they can focus less time on administrative work and more time serving customers.”
The Dealer Desk is now available and can be reached by phone (1-844-794-6492) or via email: WFAutoDealerDesk@wellsfargo.com, between 8 a.m. and 5 p.m. local time.
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