How Import Auto Dealers Drive Success for Their Brands
Global vehicle franchises require organized communities of import auto dealers in countries like America, where direct-to-consumer sales models are largely banned. Franchised dealership networks are crucial to these corporations, as they can drive higher sales and penetrate new markets for their brands. On this episode of CBT News’ Inside Automotive, hosts Jim Fitzpatrick and Shyann Malone are joined by Cody Lusk, president, and CEO of AIADA, and Mike DeSilva, the association’s chairman and co-owner of Liberty Auto Group in New Jersey. As AIADA leaders, Lusk and DeSilva have worked tirelessly with import car manufacturers to develop mutually beneficial strategies for both OEMs and import auto dealers while also driving retail and service excellence among their association members. Now, they join the show to discuss how the vehicle import sector is navigating the current automotive landscape. "We like to bring the members of Congress to the dealership...We want them to understand how complicated and exciting and dynamic our business is before they go making laws that can negatively impact us." — Cody Lusk. Click here for the full interview.
Dealers Fear Cash for Clunkers Scenario as EV Credit Transfer Nears
As car dealers anxiously await details on how tax credits will be applied to eligible electric vehicles at the point of sale as soon as Jan. 1, some are worried about a Cash for Clunkers scenario that could leave them footing the bill for several months. According to Automotive News, starting in 2024, eligible EV buyers will be able to transfer federal tax credits to dealers and use those funds as a down payment. The credit transfer is allowed under the IRA’s Section 30D credit for new EV purchases and Section 25E credit for used EVs, which provide consumers with up to $7,500 and $4,000, respectively, if certain requirements are met. AIADA Chair Mike DeSilva said he'd like to see reimbursement within 48 hours — but he's also realistic. "A fair repayment time would be within five to seven days," he said. "Once it starts to be any longer than that, dealers will be less likely to lay out the money and wait for it. … We don't want to see a repeat of Cash for Clunkers." Click here for the full story.
Dealer Outlooks Rest on Used-Car Availability
Franchised dealers are a bit more optimistic about the current market than they were three months ago, the Q3 Cox Automotive Dealer Sentiment Index finds. Independents, meanwhile, are decidedly less confident. One area is responsible for that divergence, Jonathan Smoke, Cox Auto’s chief economist, tells Wards. “Separate what they are saying about the used-car market,” he says. “Franchised (dealers) are positive and independents negative.” Of course, independent dealers only sell used cars but used cars are an important source of income and profit for franchised dealers. And the outlook for that part of a franchised dealers’ business is doing well and will continue to do so, says Smoke. Supply is the key. “Franchised (dealers) have had an advantage because they have greater sources of (used) inventory and in particular during the pandemic, the access to off-lease (inventory) is not only a source but also a source of particular strength in profits for franchisees,” says Smoke. As the supply of new vehicles became constrained by the chip shortage and other supply chain disruptions, the market price of used vehicles shot up, he explains. Vehicles coming off lease had positive equity. “Historically, that number is negative,” he says. Click here for the full story.
Supercar Brands Search for Sustainable Performance
Supercar brands are staring into the maw of an existential crisis. According to Automotive News, the automakers must find a way to comply with tightening global emissions rules without sacrificing the world-class performance that their one-percenter clientele demands. Brands from Aston Martin to Rolls-Royce are speeding down different roads to reach that balance. Aston Martin is racing into the EV era by upping the horsepower of several combustion engine models while also rolling out hybrid and all-electric vehicles. A deal with Lucid Motors will see the first of Aston's electrified lineup take to the road in late 2025, powered by the same electric motors and batteries used in the Lucid Air, which is capable of more than 1,200 hp and 0 to 60 mph in under 2 seconds. Maserati is dropping V-8 engines this year as it begins to electrify its lineup. Ferrari's attempt to build a performance legacy in the EV world begins in 2025 when it unveils its first zero-emission model. Porsche, buoyed by the demand for the electric Taycan fastback, is proving electric motors can match the flat-six in delivering driving thrill and performance. Click here for the full story.
$23K Used to Buy a 3-Year-Old Car in 2019, Now it Can’t Even Get You a 6-Year-Old One
If you’ve been shopping for a used car lately, you’ve undoubtedly noticed prices have gone through the roof. While this isn’t exactly news, a study is shining light on how bad the problem has gotten. According to Carscoops, the findings are striking as “used car shoppers have to buy cars more than twice as old as what the same money bought them in 2019.” In particular, $23,000 used to be able to get you a three-year old used car, but today that same amount of money couldn’t even get you something six-years old. As part of the study, iSeeCars looked at over 21 million used cars sold in 2019 and 2023. They found that the “average age of used cars sold increased from 4.8 years to 6.1 years, while the average price across all ages increased 33 percent, from $20,398 to $27,133.” That’s a sizable jump and the increase in price and age can be blamed on a variety of factors including inflation, demand, and the coronavirus pandemic, which brought new car production to a halt. Even when factories reopened, it was far from smooth sailing thanks to the chip crisis and part shortages. Click here for the full story.
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