Dealer Optimism Rides Into Q1
With dealership profitability riding high, franchised dealers came into 2021 still strongly optimistic about the market at hand. But the effects of the coronavirus pandemic and inventory shortages are high on their list of concerns about factors that could put a crimp in results, according to the latest Cox Automotive Dealer Sentiment Index survey. Automotive News reports that the first-quarter survey marked the third-straight quarter of strong optimism by franchised dealers after their outlook plunged in the second quarter of last year, during the peak of the industry's coronavirus crisis. Cox Automotive Chief Economist Jonathan Smoke said 2020 marked the "most dramatic year in history" for the index, which was launched in 2017. The roller coaster for dealer sentiment coincided with the most profitable year on record for U.S. dealerships, according to the National Automobile Dealers Association, which tracks the data. Read more here (Source: Automotive News).
A Tale of Two Earthquakes: In Japan, Some Lessons Learned, Others Deferred
A massive earthquake strikes off Japan's northeast Pacific coast, rattling buildings as far away as Tokyo, triggering widespread power outages, shutting down trains, unleashing landslides and sparking concern about tsunamis and radiation leaks from a nearby nuclear plant. In its wake, a critical Japanese semiconductor plant is thrown offline, and a broken supply chain forces Japanese automakers to suspend production at plants across the country. For those who remember, reports Automotive News, it sounds a lot like the devastating March 11, 2011, temblor that rocked Japan and the global auto industry 10 years ago this week. But in an eerie flashback, this quake struck only last month — on Feb. 13 — in almost the exact same place. The aftermath of this latest convulsion was a jolting reminder about just how fragile automotive supply chains remain, despite the best efforts to fortify them after the 2011 disaster. Read more here (Source: Automotive News).
Electric Vehicles Are the U.S. Auto Industry's Future – If Dealers Can Figure Out How to Sell Them
The Wall Street Journal reports that as auto executives and investors buzz about the coming age of the electric car, many dealers say they are struggling to square that enthusiasm with the reality today on new-car sales lots, where last year battery-powered vehicles made up fewer than 2% of U.S. auto sales. Most consumers who come to showrooms aren’t shopping for electric cars, and with gasoline prices relatively low, even hybrid models can be a tough sell, dealers and industry analysts say. Automakers are moving aggressively to expand their electric-vehicle offerings with dozens of new models set to arrive in coming years.Many dealers say that puts them in a delicate spot: They are trying to adjust, but unsure whether and how fast customers will actually make the switch. Read more here (Source: The Wall Street Journal).
Toyota VC Invests in AI Startups, Firms That Refine Everyday Processes
Toyota Motor Corp’s first venture capital fund is investing in startups that help the Japanese automaker refine everyday processes by bringing sharper supply-chain management and robotics to the factory floor, a fund executive said. According to Reuters, the Silicon Valley-based Toyota AI Ventures fund, with $200 million under management, has so far invested in 36 early-stage startups, including self-driving car software firm Nauto, factory video analytics company Drishti and air mobility firm Joby Aviation. Toyota, the world’s largest automaker by vehicle sales, and many car companies such as Volkswagen AG are funnelling money into startups to help gain an edge in artificial intelligence as investor interest shifts to self-driving cars. For instance Toyota, which has dozens of factories around the world, wants to be able to quickly share the lessons learned at one plant across other plants so that efficiencies are maximised, Jim Adler, the founding managing director of the fund, told Reuters in an interview. Read more here (Source: Reuters).
Manheim Index Shatters Record Fueled by February Price Jump
According to Auto Remarketing, Cox Automotive reported on Friday that wholesale used-vehicle prices (on a mix-, mileage- and seasonally adjusted basis) increased 3.79% month-over-month in February. That climb brought the index to 169.2, a 17.9% increase from a year ago, surpassing the previous high of 163.7 posted in August. Temperatures plunged last month and impacting auction activities as chronicled in this special series from Auto Remarketing. Meanwhile, the Manheim Market Report (MMR) showed values heated up and prices strengthened as the month progressed. Analysts indicated the 3-year-old MMR Index — which represents the largest model year cohort at auction — ticked up 0.9% during the closing week of the month, leaving prices 2.4% higher through the four weeks of February. “The increase last week was the strongest increase for that week for any year since 2014,” Cox Automotive said in commentary that accompanied the latest index update. Read more here (Source: Auto Remarketing).
Webinar: Charlie's Real Time Quarterly Market Update
Cox Automotive Senior Economist Charlie Chesbrough is back on the AutoTalk webinar on March 11 at 2:00 p.m. EST to present the most up-to-date, real time data. Topics to be reviewed include:
-
U.S. economic outlook: Is inflation on the horizon?
-
What’s expected in 2021 for new and used vehicle markets
-
New market trends in the post-COVID market
-
Obstacles for market recovery – affordability and inventory
To register for this and other upcoming AutoTalk webinars, click here.
Around the Web
Aston Martin Plans Electric Sports Car, SUV from 2025 [MotorAuthority]
10 New Cars You Can Get for Less Than $300 a Month [MarketWatch]
Traffic Deaths Rose 8% in 2020 [USA Today]
Porsche Increases Its Stake in Rimac as Joint Projects Start Taking Shape [Autoblog]
