2021 AIADA Chairman Steve Gates and CEO Cody Lusk Discuss Challenges Facing the Auto Industry
2021 AIADA Chairman Steve Gates and AIADA President and CEO Cody Lusk joined CBT News to discuss the direction of the association and future challenges the industry could face in 2021. Gates was introduced to the new Chairman at AIADA’s 51st Annual Meeting, held virtually this year. Gates is a third-generation Kentucky dealer and President of Gates Auto Family. During the interview, he begins the conversation by discussing his thoughts on assuming the chairman position after an unprecedented 2020. He says that while it is certainly a crazy time to take on the role, it is also a very exciting time in the industry. Watch the full interview here (Source: CBT News – Subscription Required).
Dealer Profits Surge 48% to Record in a 'Unique' 2020
Despite a pandemic that shut down some stores' showrooms for most of last spring, U.S. dealerships on average posted their highest profits ever in 2020, reports Automotive News. According to the National Automobile Dealers Association, the average U.S. dealership recorded net pretax profit of $2.1 million last year, a 48 percent leap from 2019. The 2020 figure also blew by the previous record of $1.5 million, recorded in 2015. "There was just an improvement in the returns from your operations [in 2020] due to the unique market conditions that increased scarcity for both new and used vehicles," said NADA Chief Economist Patrick Manzi. Dealers "rose to the unique challenges that [2020] presented and ended up having a pretty good year." The money the average dealership earned on operations made an impressive jump in 2020, to $590,996, more than nine times its level in 2019 and a huge swing from 2018, when the average franchised store recorded a loss on operations. Read more here (Source: Automotive News).
In SPACs, Dealers See Viable Option to Go Public
The flood of special-purpose acquisition companies on the market has some dealers exploring a new way to take their companies public, reports Automotive News. If the strategy comes to fruition, it could lead to the first expansion to the ranks of the six publicly traded franchised dealership groups since the last of them, Asbury Automotive Group Inc., went public in 2002. With SPACs, also known as blank-check companies, on the lookout for investment opportunities, several dealership accountants, lawyers and buy-sell advisers told Automotive News they have clients closely weighing partnerships. Talks involving some dealers have accelerated over the past few months, advisers said. Going public via a SPAC could provide quick access to capital for a growing group to buy more stores or pay down debt, or give a dealer an exit strategy. The SPAC model also could shave months off the going-public process, accountants said. Read more here (Source: Automotive News).
Eight U.S. Auto State Governors Urge Biden to Press Semiconductor Firms on Chip Shortage
A bipartisan group of eight governors from U.S. auto states on Friday urged Democratic U.S. President Joe Biden to do more to press semiconductor firms to address a global shortage of automotive chips that has cut some vehicle production, reports Reuters. The governors of Michigan, Indiana, Ohio, Kentucky, Kansas, South Carolina, Alabama, and Missouri asked Biden in a letter to join foreign governments in urging semiconductor and wafer companies to expand production and “temporarily reallocate a modest portion of their current production to auto-grade wafer production.” Michigan Governor Gretchen Whitmer, a Democrat who led the effort to get other governors to sign, said she was urging Biden “to do everything in his power and to leave no stone unturned to protect auto jobs throughout the supply chain at risk because of this shortage.” Read more here (Source: Reuters).
Volkswagen Sees Strong Rebound After 'Containing' COVID
Reuters reports that Volkswagen expects deliveries, revenues, and margins to rebound strongly this year as the coronavirus pandemic eases, after an almost halving in profits in 2020 that was still better than the German carmaker originally expected. The global No.2 after Toyota by cars sold, Volkswagen is spending tens of billions of euros to reinvent itself as a leader in the market for electric vehicles, where Tesla has stolen a march on established rivals. “Last year, the Volkswagen Group succeeded in containing the effects of the pandemic on its business and laying important strategic foundations for its transformation at the same time,” finance chief Frank Witter said on Friday. Deliveries and sales, which were both hit by the pandemic in 2020, are seen up significantly this year, the company said, without being more specific. In 2020, sales fell 11.8% to 222.9 billion euros ($270.2 billion), while deliveries dropped 15.2%. Read more here (Source: Reuters).
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:
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U.S. economic outlook: Is inflation on the horizon?
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What’s expected in 2021 for new and used vehicle markets
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New market trends in the post-COVID market
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Obstacles for market recovery – affordability and inventory
To register for this and other upcoming AutoTalk webinars, click here.
Around the Web
Ford Family Puts Personal Station Wagons Up for Sale at Barrett-Jackson Auction [USA Today]
When Does an $8K Vehicle Cost $21K? [Car and Driver]
A Car You've Never Heard of From a Company That Deserves Admiration [The Detroit Bureau]
Nikola Admits Outsted Chairman Misled Investors as Legal Costs Mount [CNBC]
