Dealers Try to Ward Off New Limits as Virus Surges
Automotive News reports that dealer association leaders are lobbying state and local governments to try to keep a fresh batch of COVID-19 restrictions at bay. Though some say they don't anticipate limitations as strict as those seen in the spring, the fear of another round of virus-related shutdowns is high for many dealers across the country as COVID-19 cases in the U.S. rise to the highest level seen during the pandemic. With consumers forced into their homes by the coronavirus pandemic, online sales have spiked to unprecedented levels and these well-funded digital disruptors are poised to take a sizable bite out of the market. John Devlin, CEO of the Pennsylvania Automotive Association, said dealers in his state are concerned about possible new shutdowns as cases surge. But he said he was reassured during a call with state officials the week of Oct. 26 in which it was communicated that the level of previous shutdowns wasn't being considered. Pennsylvania's closures this spring were among the most stringent for auto retailers across the U.S. and had dealership sales departments shuttered for months. Read more here (Source: Automotive News).
Gridlock in Congress Set to Stall Biden's Auto Agenda
As votes were counted late last week to determine the winners of the 2020 presidential and congressional elections, at least one likely outcome was emerging: another divided Congress with Republicans controlling the Senate and Democrats running the House. That means the auto industry could be caught in the middle of more congressional gridlock for at least the next two years. For Joe Biden, a continued stalemate between the two chambers would prevent a number of legislative efforts to reshape the industry from reaching the chief executive's desk. The fate of fuel-efficiency standards and California's authority to restrict tailpipe emissions as well as the speed of development and adoption of electric vehicles and autonomous cars hangs in the balance. Read more here (Source: Automotive News).
Mazda Posts Second-Quarter Loss, But Helped by Rebound in North America Sales
Mazda Motor Corp. on Thursday posted a 7.59 billion yen ($73.4 million) operating loss in the three months ended Sept 30 as sales contracted amid the coronavirus pandemic. The loss, calculated by Reuters from the company’s half-year result, compares with an 18.9 billion profit in the same quarter last year and a 45.3 billion yen loss in the first three months of the business year, which was its worst in quarter in 11 years. Mazda posted a smaller loss in the second quarter after it benefited from a rebound in sales in North America, its biggest market. Vehicle sales there rose 1% from a year earlier. Japan’s No.5 automaker kept its full-year forecast for an operating loss of 40 billion yen. That is better than the average full-year estimate for a 53.3 billion yen operating loss from 17 analysts polled by Refinitiv. For the full business year the maker of the CX-5 SUV crossover and Mazda3 sedan kept its full-year prediction for global vehicle sales to fall 8.5% to 1.3 million units, the lowest in seven years. Read more here (Source: Reuters).
VW CEO Says Existential Electric Race Awaits After Pandemic
Volkswagen AG Chief Executive Officer Herbert Diess vowed to pursue a sweeping transition to electric cars, declaring it a matter of survival even as the coronavirus risks upending business in the near term, reports The Detroit News. While the world’s largest carmaker has a “healthy order bank,” its development in the coming months hinges on major economies controlling the disease and averting restrictions that would hurt demand and operations, Diess said Thursday. Despite the uncertainties, VW will press ahead with aggressive investment in new technology to avoid falling behind as the auto industry fundamentally changes. “If you’re not fast enough, you’re not going to survive,” Diess said during a virtual Bloomberg event. “In the long run, climate change will be the biggest challenge mankind is facing.” Read more here (Source: The Detroit News).
Toyota President: Tesla Has 'Not Created a Real Business in the Real World Yet'
During a Toyota Motors earnings call on Friday, executives answered questions about how they plan to compete in the expanding field of electric vehicles, and mentioned Tesla’s sky-high valuation. CNBC reports that Toyota President Akio Toyoda acknowledged that Tesla’s valuation of around $400 billion is sky high, exceeding that of all seven Japanese automakers combined. He also said Toyota could learn from Tesla’s success with investors, and its business model, which includes revenue from electric vehicles, regulatory credits, software and renewable energy products. But, the exec went on to compare Tesla’s business to a restaurant still promoting its recipes, while Toyota is more like a restaurant already serving a huge number of customers. “I am hesitant to say this — Tesla’s business, if you want to use the analogy, is like that of a kitchen and a chef,” Toyoda said. Read more here (Source: CNBC).
Webinar: An Update on COVID-19's Impact on U.S. Auto Sales
Cox Automotive Senior Economist Charlie Chesbrough returns to AutoTalk on Thursday, November 12 at 2:00 p.m. EST for an update.
Topics to be reviewed include:
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Economic forecast and impact as we close out the year
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Consumer sentiment and buying behaviors
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Stock market, interest rates, and employment
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An outlook for vehicle sales
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Current view of new and used retail sales and prices
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