Dealer Lots Could Stay Emptier Long Term

First Up 02/22/21

AIADA Presents Lifetime Achievement Award to Late Indiana Dealer Bob Rohrman

AIADA has announced the late Bob Rohrman as the recipient of the 2021 David F. Mungenast Lifetime Achievement Award. “Those of us who knew Bob Rohrman and his legendary generosity saw that he embodied the spirit of the David F. Mungenast Lifetime Achievement Award more than almost anyone else in our industry. There are many things we remember Bob for, but at the very top was his giving spirit and commitment to leaving the world a better place than he found it,” said AIADA President and CEO Cody Lusk. Rohrman’s generosity was even bigger than his television personality. Highlights include a $15 million donation to Purdue University for Rohrman Field at Ross-Ade Stadium, $3.5 million for the Rohrman Performing Arts Center at Jefferson High School, and multiple other donations to organizations including Susan G. Komen, Meals on Wheels, and the Make-a-Wish Foundation. Read more here. 

Dealer Lots Could Stay Emptier Long Term

According to Automotive News' 2021 Dealer Outlook Survey of 183 dealership executives in January, most dealers — 59 percent of respondents — expect inventory to meet demand by the end of June, but 25 percent say that won't happen until at least next year. More than half of those surveyed said the lower stock has increased their new- and used-vehicle profit margins, but 40 percent doubt the staying power of those profits after inventories normalize. Automakers and dealers "have a taste of what happens with margins and profitability when supply is constrained, and I believe that is likely to factor into long-term production planning," said Jonathan Smoke, Cox Automotive's chief economist. Having 20 percent less inventory than in the past seems to be the sweet spot for most dealers, said Glenn Mercer, a consultant who wrote a study for the National Auto. Read more here (Source: Automotive News). 

Kia Hit by Hackers Temporarily Hampering Sales, Convenience Features

Kia acknowledged it was hit by a cyberattack that disrupted the company’s operations, reports The Detroit Bureau. Problems with its IT infrastructure surfaced earlier this week owners finding they were unable to make payments or unlock their vehicles remotely. Car owners weren’t the only one stuck as dealers discovered they couldn’t complete any transactions using the company’s proprietary portal. “Kia Motors America, Inc. has been experiencing an extended systems outage since Saturday but can confirm that the UVO app and owner’s portal are now operational. We anticipate remaining primary customer-facing affected systems will continue to come back online within the next 24-48 hours, with our most critical systems first in line. “We apologize for the inconvenience to affected customers, especially those impacted by winter storms, who felt the outage of our remote start and heating feature most acutely. Kia is wholly focused on fully resolving this issue and would like to thank our customers for their continued patience,” the company said in a statement. Read more here (Source: The Detroit Bureau). 

Let's Go Shopping, Say Public Retailers

Several public retailers that largely sat on the sidelines during the dealership acquisition action of the past few years say they are getting back in the game, reports Automotive News. AutoNation Inc., Penske Automotive Group Inc., Group 1 Automotive Inc., and Sonic Automotive Inc. each indicated this month that they again are shopping for franchised dealerships and looking to expand store counts. The plans by the four dealership groups come amid a recent surge in stock prices for public auto retailers and as competitors such as Lithia Motors Inc. and Asbury Automotive Group Inc. have snapped up stores. Dealership buy-sell activity has broadly skyrocketed following the early months of the coronavirus pandemic in 2020, when deals came to a short-lived standstill. Penske, the second-largest new-vehicle retailer in the country, last acquired U.S. dealerships in 2018 when it bought two Lexus stores in Texas. This month, Penske said it expects to add $600 million in annual revenue through three new franchised dealerships and what it described n a statement as "identified acquisition targets." Read more here (Source: Automotive News). 

Porsche CEO Warns 'Very Serious' Global Chip Shortage Could Affect Operations for Months

Porsche’s chief executive warned on Monday that the German luxury automaker’s daily operations could be affected over the coming months by a “very serious” global semiconductor shortage, reports CNBC. “The semiconductor topic is a very serious one because the whole industry is affected because of the big demand of consumer electronics and the faster return of the automotive sector,” Oliver Blume, chief executive of Porsche, told CNBC’s “Squawk Box Europe” on Monday. “We could be affected every day, so we watch very deeply (over) the next days and months what we can do. We have to relax short term and look for measures long term.” His comments come after a sudden upsurge in global car sales late last year coincided with a shortfall of essential chip components. The supply shortages brought assembly lines of the chip-reliant car industry to a standstill and halted the production of hundreds of thousands of vehicles worldwide. Read more here (Source: CNBC). 

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