High Valuations, Future Worries Spur Some Dealers to Sell Their Stores
Dealers are motivated to sell amid record prices for their stores and fears of possible higher capital gains taxes under President Joe Biden's administration, adding urgency to the uptick in buy-sell activity this year, brokers say. According to Automotive News, the buy-sell market over the past few months has seen a lessened interest in Volvo franchises following Volvo's March announcement that it plans in the future to sell its EVs online and at set prices, said Erin Kerrigan, managing director of sell-side firm Kerrigan Advisors in Irvine. While Volvo store valuations could be impacted, Kerrigan has not seen a rise in Volvo stores going on the market. Dealers' wariness isn't just with digital EV sales, Kerrigan said, but with "one-price" mandates for new vehicles. She said the change is big because dealers last year during the pandemic and even more so during the recent inventory shortage have been able to adjust pricing to help boost new-vehicle gross profits. Read more here (Source: Automotive News).
Porsche to Set Up Joint Venture with German Battery Maker
Volkswagen's luxury sports car unit Porsche AG is setting up a joint venture with Customcells to produce high-performance batteries that will significantly reduce charging times, the company said on Sunday. According to Reuters, the partnership with Customcells, a company in southern Germany specialising in lithium-ion cells, will aim to produce car batteries with higher energy density than prototypes used in Porsche's current electric cars, the company said in a statement. European carmakers are pushing to reduce their dependence on Asia for batteries as they roll out all-electric models to meet stricter emissions targets in the European Union. In addition to cutting charging time, improving energy density will mean reducing the amount of raw material needed in batteries to achieve the same range. It will also cut battery production costs, making electric cars more affordable. Porsche said it will invest a high double-digit million euro sum in the joint venture in which it will hold 80%. Read more here (Source: Reuters).
No Summer Break for the Chip Shortage
The global semiconductor chip shortage could create a steamy summer for the auto industry, reports Automotive News. As automakers cope with the supply chain crisis, production interruptions may overlap with normal summer factory shutdowns and model changes. AutoForecast Solutions estimates that the North American industry could lose more than 340,000 scheduled vehicles over the next two months. The summer's scheduled shutdowns will mean a lost opportunity to make up for missed production to date, Sam Fiorani told Automotive News. "Plant closures in July and beyond virtually eliminate the ability for manufacturers to make up any of the lost volumes this year," Fiorani said. But in a play to conserve its supply of microchips for key launches, Nissan Motor Co. is extending its previously scheduled two-week U.S. summer shutdown, halting some production at its Canton, Miss., and Smyrna, Tenn., assembly plants next month. Read more here (Source: Automotive News).
VW Planning "Massive" Change to U.S. EV Program
Volkswagen will “realign … in a massive way” its EV plans for the U.S., a senior company official said, responding to President Joe Biden’s push to boost electric-vehicle sales. According to The Detroit Bureau, the announcement echoes moves by other manufacturers, including Polestar, the Volvo battery-car spinoff, that said it will produce its next model at a plant in South Carolina, rather than importing it from China. Until now, VW plans entailed selling just three battery-electric vehicles in the U.S., including the recently launched ID.4 and another model yet to be identified. Both were to have begun being assembled in Chattanooga, Tennessee following the expansion of that plant. Now, it appears, there will be more BEVs in the pipeline for U.S. showrooms. The automaker is working to shift its BEV strategy and will “realign … this in a massive way,” the Volkswagen brand’s product development chief Thomas Ulbrich told reporters in Munich. Read more here (Source: The Detroit Bureau).
Car Travel Jumped by 55% in April Over 2020 Levels
U.S. motorists drove 55% more miles in April over pandemic levels in 2020 as more Americans return to offices and resume trips. According to Autoblog, the Federal Highway Administration said motorists drove 256.5 billion miles in April, up 90.6 billion miles over April 2020. In seasonally adjusted figures, travel in April was down 4.7%, or 12.3 billion miles, versus March 2021, the agency said. In a sign of the pandemic's continuing impact on road use, U.S. motorists drove 20 billion fewer miles in April versus April 2019. Many Americans continue to work from home or are only going into offices occasionally, and the New York Times recently reported on the lasting changes that could bring for traffic levels. For all of 2020, road travel fell 13.2% to 2.83 trillion vehicle miles, down 430 billion miles, the lowest in a year since 2001. Travel is starting to pick up in general, including air and transit, as more Americans get vaccinated and return to offices or take leisure or business trips. Read more here (Source: Autoblog).
Around the Web
AIADA Chairman Steve Gates Interviews Rep. Andy Barr [Watch]
Window Shop with Car and Driver [Car and Driver]
2022 Toyota Tundra First Look [MotorAuthority]
Used-Car Sales Up More Than 26% Through May [Auto Remarketing]
