Hyundai, Kia Set Monthly Records on Strong Retail Volume

First Up 06/02/21

Out of the Gates: Paying Consumers to Buy Union-Built Vehicles is Un-American

In his last blog post, Chairman Steve Gates wrote that President Biden’s buy-American, pro-union rhetoric “scared the heck out of me.” Today, he writes that it would have been nice to have his fears proven unfounded, but instead, Democrats in the Senate moved to tie electric vehicle incentives not just to vehicles built in U.S. plants, but to vehicles built in UNIONIZED U.S. plants. To be precise, Democrats on the Senate Finance Committee supported language in the Clean Energy for America Act to raise EV incentives from $7,500 to $12,500 – a huge increase with an even bigger catch: consumers are eligible for a $7,500 tax credit if they buy an EV, an additional $2,500 If the vehicle is assembled in the U.S., and another $2,500 if it is assembled in a plant whose workforce is represented by a union. This is curious language for a bill meant to fight for climate change in the United States. Sadly and obviously, stuff like this happens all the time. And it’s up to us, America’s international nameplate retailers, to push back against it. Join Chairman Steve Gates in moving from scared to mad. Then you can click here to send a letter to your lawmakers calling this proposal what it is: un-American. Read more here. 

Hyundai, Kia Set Monthly Records on Strong Retail Volume

Hyundai said U.S. retail sales rose across the entire lineup, with utility-vehicle volume up 34 percent and car demand up 105 percent, in May. At Genesis, utility-vehicle sales continued to outpace combined car sales last month, reports Automotive News. Hyundai and Kia, deftly navigating the supply crunch that has upended the industry as the economy reopens in the wake of the pandemic, set U.S. sales records for the third straight month in May, helped in large part by robust retail demand for light trucks. Volume jumped 56 percent to 90,017 at Hyundai and 75 percent to 80,298 at Kia, compared with May 2020, when the nation was still hunkered down in the early months of the outbreak. Kia noted "significantly accelerated showroom traffic" over the Memorial Day holiday as consumer activity rebounds and restrictions on households lift. Read more here (Source: Automotive News). 

Local Car Dealers Urged to Sell Long-Distance

Now is the time for local car dealers to begin extending their reach to become regional – even national auto retailers, reports WardsAuto. So says Jade Terreberry, Cox Automotive’s director-dealer sales analytics, who adds that many “progressive” dealers already have done so using digital tools. Because of the current auto retailing circumstances of high demand and low inventory, it’s sometimes a hard sell to convince dealers to sell long-distance. To some of them, that’s akin to watering the lawn when it’s raining. Terreberry says some dealers tell her: “‘We can’t keep inventory on the lot. We’re making more profit per unit than ever before.’ “I remind them stimulus checks aren’t going to keep flowing. Tax refund checks aren’t going to come year-round. This rare combination of circumstances (high demand and lean inventories) will change. It is going to be volatile in some quarters.” In a WardsAuto Q&A, she tells how and why dealers should sell to more than just locals. Read more here (Source: WardsAuto).

Tesla Failed to Oversee Elon Musk's Tweets, SEC Argued in Letters

Securities regulators told Tesla Inc. last year that Chief Executive Elon Musk’s use of Twitter had twice violated a court-ordered policy requiring his tweets to be preapproved by company lawyers, according to records obtained by The Wall Street Journal. Tesla and the Securities and Exchange Commission settled an enforcement action in 2018 alleging that Mr. Musk had committed fraud by tweeting about a potential buyout of his company. Mr. Musk paid $20 million to settle that case—Tesla also paid $20 million—and agreed to have his public statements on social media overseen by Tesla lawyers. In correspondence sent to Tesla in 2019 and 2020, the SEC said tweets Mr. Musk wrote about Tesla’s solar roof production volumes and its stock price hadn’t undergone the required preapproval by Tesla’s lawyers. The communications, which haven’t been previously reported, spotlight the running tension between the nation’s top corporate regulator and Mr. Musk, who publicly mocked the SEC even after settling fraud claims with the agency. Read more here (Source: The Wall Street Journal). 

Toyota Finds New Niche in Small Crossovers with 2022 Corolla Cross

Toyota will become the latest brand to double up in the growing, competitive subcompact-crossover segment with the arrival of the 2022 Corolla Cross, which aims to give consumers a midpoint between the brand's subcompact C-HR hatchback and its popular compact RAV4. According to Automotive News, the new model, making its U.S. debut here on Wednesday and expected to arrive this fall, shares the TNGA-C platform with the Corolla sedan and borrows the powertrain from the car's sportier grades. The 169-hp inline-four engine is mated to a continuously variable transmission and is capable of towing up to 1,500 pounds. With standard front-wheel drive, the Corolla Cross is expected to be rated at 32 mpg combined. All-wheel drive is optional. Toyota is building the Corolla Cross at a new joint-venture factory it operates with Mazda in Huntsville, Ala. Read more here (Source: Automotive News). 

It's Time to Get Creative with Used Car Acquisitions

According to the US Bureau of Labor Statistics, used car prices have jumped 21% since April. This unprecedented price hike comes at a time when new vehicles are sparse because of global chip shortages slowing production, which heavily shifted demand to used vehicles. Bad news: this makes acquiring inventory challenging and expensive. Good news: demand hasn’t gone down, so dealers who continue acquiring vehicles have the advantage.

Here are some tips for getting creative with used car acquisitions:

  • Improve your website’s “we buy cars” messaging. For example, change language from “value your trade” to “we buy cars”. If a consumer doesn’t see anything in inventory to trade with, they may not realize they can still sell their car to you.

  • Run “we buy cars” campaigns. If new vehicle inventories are low, shift marketing dollars towards other campaigns for the time being to focus on branding, service, used inventory and “we buy cars” efforts.

  • Quote cash offers to your fixed ops customers and follow-up. Appraise every vehicle that comes through your service lanes. Highlight the vehicles in high demand on a service board where customers will see it! Create a CRM follow-up plan that keeps your offers top-of-mind.

Learn more here.


Around the Web

BMW Shares U.S. Info, Pricing on 2022 i4 and iX Electric Cars [Car and Driver]

Tesla Recalls Nearly 6,000 U.S. Cars Over Potentially Loose Belts [Reuters

Edmunds Looks at Five Fully Loaded Cars Worth the Price Jump [U.S. News & World Report]

2022 Toyota GR Supra A91-CF Edition Adds Carbon Fiber [Autoblog