Dealers Struggle to Move 2019 Models After Only Recently Selling All 2018s
Automotive News reports that U.S. dealerships — which should by now have lots of 2020 model year vehicles for sale — are still stocked full with a near-record proportion of vehicles in the current model year, in this case, 2019s. The main reason, according to J.D. Power? Dealers just now got rid of most of their leftover 2018 models — some four months late. And those leftover 2018s hung around on dealer lots too long because they were crowded out earlier in their model year by an overabundance of 2017s. At the heart of the problem is this: Manufacturers haven't sufficiently slowed production to match slowing retail sales, said Tyson Jominy, vice president of data and analytics for J.D. Power. "We are behind," Jominy said of industry retail sales. As of mid-October, about 26 percent of dealership retail sales were of the coming model year (2020), compared with 32 percent of 2019 models at the same point a year ago. Meanwhile, sales of previous model-year vehicles — in this case, 2018s — were 40 percent higher than a year ago, when dealer lots were clearing out remaining 2017s. Read more here.
European Autos Surge to Six-Month High on Trade Optimism
European automotive stocks soared to the highest level in six months after U.S. Commerce Secretary Wilbur Ross said the White House may not need to put tariffs on imported cars later this month, reports Bloomberg. The Stoxx 600 Automobiles & Parts Index jumped as much as 3.1% Monday and was the best-performing sector in Europe after Ross told Bloomberg Television on Sunday that the U.S. has had “good conversations” with automakers in the European Union, Japan and elsewhere. Progress on a U.S.-China trade deal also emerged from a meeting between Ross and Chinese Premier Li Keqiang, further boosting investors’ sentiment on the tariff-sensitive car industry. The threat of U.S. tariffs on cars from the EU has been holding back stocks for awhile, so, “these comments are a welcome boost at a time when the sector appears to be stabilizing,” Michael Hewson, chief market analyst at CMC Markets UK, said by email. Read more here.
UAW President Gary Jones Goes on Paid Leave Amid Corruption Probe
United Auto Workers President Gary Jones stepped aside Saturday, 16 months into a rocky tenure leading one of the nation's largest and most powerful labor unions — a union beset by corruption and accusations he helped steal $2.2 million from blue-collar workers, reports The Detroit News. Jones did not resign as president of the union, his attorney, Bruce Maffeo, told The Detroit News. Jones is taking paid leave from a post that pays more than $200,000. Effective Sunday, Vice President Rory Gamble, head of the union's Ford Department, will serve as interim president and become the UAW's first African American president in the union's 84-year history. “The UAW is fighting tooth and nail to ensure our members have a brighter future. I do not want anything to distract from the mission," Jones said in a statement following a vote by the union's Executive Board. "I want to do what’s best for the members of this great union.” Read more here.
Honda, Hyundai, and Mazda Enjoy Strong October Sales Results
The Hyundai Santa Fe enjoyed strong sales in October, pushing the company to an 8.4% sales jump last month, reports The Detroit Bureau. With interest rates remaining lower, Honda, Mazda and Hyundai increased sales in October, while Toyota and Volkswagen’s slipped, according to new monthly sales totals for last month. The Detroit Bureau reports that the industry is expected to post a small increase for October. Automakers will not finish reporting sale until Nov. 4, according to Cox Automotive. Toyota Motor North America (TMNA) today reported October 2019 sales of 188,787 vehicles, a decrease of 1.2% on a volume basis and down 4.9% on a daily selling rate (DSR) basis versus October 2018. Toyota division posted October sales of 165,644 units, down 1.6% on a volume basis and down 5.3%. Lexus division posted October sales of 23,143 vehicles, up 1.9% on a volume basis and down 1.9%. American Honda Motor Co. reported a 7.6% gain in October, selling 131,443 cars and trucks. The Honda brand set a record with an 8% gain, with its trucks – led by the CR-V and HR-V – which rose 17.5% and set a new October benchmark. Acura trucks also set an October record as division nets 2.4% gain. Read more here.
Peugeot's Bold CEO to Take the Wheel in Deal with Fiat Chrysler
Carlos Tavares stunned the auto world when he left his post as heir apparent to Carlos Ghosn at the globe-spanning Renault-Nissan alliance six years ago and then took the reins of struggling rival Peugeot, which sold relatively few cars outside Europe. Now, reports The Wall Street Journal, the 61-year-old chief executive of Peugeot’s owner, PSA Group of France, is stepping back onto a wider stage. Mr. Tavares negotiated a nearly $50 billion merger with Fiat Chrysler Automobiles that, if completed, will mark one of the biggest auto-industry deals in decades and leave him CEO of the combined company. The deal presents Mr. Tavares with new challenges. He rescued Peugeot largely by cutting costs and focusing on the bottom line, and he has touted the virtues of staying nimble rather than chasing scale in a rapidly changing industry. “We are not market-share addicts,” Mr. Tavares said in a March interview with The Wall Street Journal. “We believe agility is very important.” Read more here (subscription required).
Webinar: How to Protect Your Used Car Margins
AutoTalk's car gurus are back!
On Tuesday, November 19 at 2:00 p.m. EST, tune in as Bob Grill, Carfax Senior Partner Development Manager, along with Automotive Consultant Mike Rossman deliver a robust presentation detailing how to:
-
Drive buyers, not just traffic
-
Create better listing descriptions
-
Skillfully win more trades
-
Increase your closing ratio while holding your gross margins
Around the Web
Here's Why You Still Can't Legally Buy a Brand-New Replica Car [Autoblog]
Electric Cars May Be Powering Ahead, But It Will Be a Long Way Before They Go Mainstream [CNBC]
How Close Are We to Seeing Flying Cars? [USA Today]
Sales of New Classic Cars and SUVs Stalled in Limbo [Detroit Free Press]
