Industry Tailwinds Offset Headwinds, Toyota Exec Says
A top Toyota U.S. executive foresees “a solid car market for everyone” in the industry this year and next following a shaky 2020 because of COVID-19’s widespread effects, reports WardsAuto. I’m very bullish,” says Bob Carter, Toyota North America’s executive vice president-sales, a 40-year veteran of the industry who started as a Toyota dealer. He predicts sales of 16.2 million to 16.3 million in 2021. “There are headwinds but I think tailwinds will offset them,” Carter tells Cody Lusk, president of the American International Automobile Dealers Assn. Their discussion last week was part of the trade group’s series of online events. On the negative side, Carter says, “There’s still the pandemic, the industry in general has low inventory and the supply chain remains extremely fragile,” particularly because of a current microchip shortage. Read more here (Source: WardsAuto).
Watch Carter’s full Q&A with AIADA President and CEO Cody Lusk, part of AIADA’s 51st Virtual Annual Meeting here.
Biden Executive Orders Demand Solution to Semiconductor, EV Battery Problems
In the months since his election, President Joe Biden has explained what he wants to see from the automotive industry in the years ahead. Yesterday, he signed executive orders to help make some of those things happen. The order addresses some of the supply chain issues hampering U.S. automakers now and moving ahead, such as dealing with the current shortage of semiconductors and increasing the production volumes of batteries for electric vehicles. It starts with an “immediate 100-day review across federal agencies to address vulnerabilities” in the supply chains for certain areas, including semiconductor chips. “Make no mistake, we’re not simply planning to order up reports. We are planning to take actions to close gaps as we identify them,” the administration official added, according to Reuters. Biden looks to solve the problem from the inside, saying that despite leading the way in the development of semiconductors, we’re now behind. Read more here (Source: The Detroit Bureau).
Enforcement Likely From New CFPB Administration
Enforcement actions from the Consumer Financial Protection Bureau under its new director are likely, according to senior executives at the American Financial Services Association. Automotive News reports that Danielle Fagre Arlowe and Celia Winslow, senior vice presidents at AFSA, said state and federal scrutiny in the automotive finance industry will sharpen under Democratic leadership. Their remarks were made during a Tuesday presentation at the organization's virtual conference. "The CFPB is going to pick up exactly where it left off with [former director Richard] Cordray," Winslow said. "There's going to be a renewed determination to get back to its roots, but possibly, [there will] be a little bit more of a focus on enforcement." There's been anxiety in the automotive sector that under new leadership from President Joe Biden and a Democratic majority in Congress, a larger focus will be placed on compliance than occurred during the Trump administration. Read more here (Source: Automotive News).
Aston Martin Says Back on the Road to Profitability After 2020 Loss
Aston Martin expects to almost double sales and move back towards profitability this year after sinking deeper into the red in 2020, when the luxury carmaker was hit by the pandemic, changed its boss and was forced to raise cash, reports Reuters. The British company’s shares jumped 9% in early Thursday trading after it kept a forecast for around 6,000 sales to dealers this year as new management turns around its performance. The carmaker of choice for fictional secret agent James Bond has had a tough time since floating in 2018, as it failed to meet expectations and burnt through cash, prompting it to seek fresh investment from billionaire Executive Chairman Lawrence Stroll. The firm made a 466-million pound ($660 million) loss last year, compared with a 120 million pound loss in 2019, as sales to dealers fell by 42% to 3,394 vehicles, hit by the closure of showrooms and factories due to COVID-19. Read more here (Source: Reuters).
Volvo, Geely Back Away from Merger
Volvo Car Corp. and Geely Automobile Holdings Ltd. said Wednesday that they would combine their engine and transmissions business but backed away from a full-blown merger of the Chinese and Swedish companies that are owned by Chinese billionaire Li Shufu. According to The Wall Street Journal, the move highlights a trend, increasingly favored by investors, for companies to sharpen their focus rather than become entangled in larger conglomerates that often dilute the value of their constituent businesses. The agreement leaves the two auto makers as stand-alone entities under the umbrella of Mr. Li’s Zhejiang Geely Holding Group. It allows Geely Auto to move forward with plans to raise the equivalent of nearly $3 billion through a share listing on Shanghai’s STAR Market for growth stocks. The decision also renews speculation that Volvo could seek an independent stock-market listing. Mr. Samuelsson said that the companies realized during the past year’s discussions that the bulk of savings they could achieve together would come from sharing software, rather than conventional savings from using common hardware components such as chassis and powertrains. Read more here (Source: The Wall Street Journal).
CARFAX Incident Information Helps Dealers with Acquiring Inventory and Building Consumer Confidence
CARFAX estimates as many as 40% of vehicles on U.S. roads have sustained damage during their lifetime; that’s about 110 million cars. CARFAX data also shows one in four cars are sold within a year of the incident. That’s why accident history is the No. 1 thing used-car shoppers look for in a vehicle’s history, and for good reason. The average impact on retail price is about $500, but that average impact on wholesale price is more than $1,000. If the vehicle has sustained severe damage, the average impact on wholesale value is nearly $2,300. CARFAX has a free valuation tool, History-Based Value, that takes into account vehicle-specific information, such as accidents, to calculate pricing.
Not all damage events are created equal. Dealers can use the CARFAX Vehicle History Report to see if there’s damage reported to CARFAX, and also help to determine the severity by digging a little deeper into the damage history.
You can get CARFAX accident information for your dealership by calling (833-807-8899) or visiting the CARFAX for Dealers website.
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