International Nameplate Dealers Applaud $2T Senate Stimulus Package
Members of the American International Automobile Dealers Association (AIADA) today welcomed the Senate’s passage of the Coronavirus Aid, Relief, and Economic Security Act, which provides economic stimulus and relief to Americans and American businesses reeling from the impact of the Covid-19 coronavirus. “The Senate’s actions show us that it is serious about providing assistance to American workers and small businesses. We urge the House of Representatives to move swiftly to send the legislation to the president’s desk. Among other provisions, the bill gives dealerships quick and efficient access to SBA loans, which will allow them to continue to make payroll and give them and their employees a fighting chance in the months ahead,” said AIADA President and CEO Cody Lusk. Read the full statement here.
The Wall Street Journal reports that Senators approved the legislation 96-0, with four senators absent, after round-the-clock negotiations between the Trump administration and leading senators. If passed, the new law would provide loans and other disbursements to a wide swath of the economy, including direct payments to Americans and loans to large and small companies. Steny Hoyer (D., Md.), the House majority leader, said late Wednesday that the House would consider the stimulus bill on Friday. Read more here.
Report: Auto Sales T-Boned by COVID-19 Restrictions
The Detroit News reports that the COVID-19 virus could slash sales of new vehicles by more than a third this month, according to automotive forecaster J.D. Power. With state-mandated shutdowns in major markets accelerating across the country from New York to Detroit to San Francisco, the company says sales are already off 19% from its original March forecast. If current trends hold, J.D. Power expects sales by the end of the month to be off 32-40% from pre-virus forecasts. Globally, IHS Markit forecasts a “stalling of demand in 2020” worse than the 8% global recession with car sales dropping 12% from 2019 to 78.8 million units. Among major markets through last week, Detroit was least impacted with sales up 2% in March. San Francisco saw sales drop 41% this month, including the 86% weekend plummet after its March 17 shelter order. Seattle, once the U.S. epicenter of the pandemic, is now the fourth most affected market, dropping behind San Francisco, Sacramento, and San Diego. Read more here.
Group 1 Furloughs 3K Employees, Closes Stores Abroad
Group 1 Automotive Inc. on Wednesday laid out steps it's taking to respond to the "dramatic decrease" in business as a result of the coronavirus pandemic, including furloughing 3,000 U.S. employees for at least 30 days, slashing executive salaries and closing stores in the U.K., and Brazil, reports Automotive News. The Houston-based retailer is the first of the six publicly traded dealership groups in the U.S. to share details about its response. Group 1 said that its U.S. vehicle sales volumes are down 50 to 70 percent from a typical March and that "[b]ased on discussions with our OEM partners, this sales decline is consistent with that experienced by other dealers." Nearly all of its U.S. dealerships are located in markets that are affected by "shelter-in-place" or similar restrictions. The company's service facilities remain open, and no Group 1 store in the U.S. is completely closed. Read more here.
Asbury Terminates Park Place Acquisition
Asbury Automotive Group has terminated its $1 billion purchase of most of the luxury Park Place Dealerships in Texas days before the deal was scheduled to close, reports Automotive News. Asbury, in a regulatory filing, said it notified the sellers Tuesday that it was ending its transaction agreements and would pay $10 million in damages. It did not specifically give a reason for the termination but said in the filing that it has borrowed $237 million from a revolving credit line and $110 million from its used-vehicle floorplan loan. "The company increased its borrowing as a precautionary measure in order to increase its cash position and preserve financial flexibility in light of current uncertainty in the global markets resulting from the COVID-19 outbreak," Asbury said in the filing. The Asbury-Park Place deal was expected to be one of the largest buy-sell deals in at least a decade. Asbury announced in December that it would buy 10 luxury Park Place stores in Texas with 17 new-vehicle franchises in the Dallas and Fort Worth markets. Read more here.
GM Taps Credit Lines to Guard Against Virus Impact
In a sign of the financial stress facing automakers, General Motors Co. disclosed it plans to draw $16 billion from its revolving credit lines, taking what it described as austerity measures, reports The Detroit Bureau. GM Chairman and CEO Mary Barra described the $16-billion drawdown as a proactive measure to increase the company’s cash position and preserve financial flexibility in light of the current uncertainty in global markets due to the COVID-19 pandemic. “We are aggressively pursuing austerity measures to preserve cash and are taking necessary steps in this changing and uncertain environment to manage our liquidity, ensure the ongoing viability of our operations and protect our customers and stakeholders,” Barra said in a statement. “Over the past several years, we have made necessary, strategic decisions and structural changes that have transformed the company and strengthened the business, better positioning us for downturns,” added Barra, who sold off GM’s operations in Europe and shutdown GM’s operations in India and Australia, focusing the company’s resources on profitable enterprises. Read more here.
Webinar Today: Customer Care and Business Guidance During the Pandemic
Join AIADA’s Chairman and dealer, Jason Courter from Honda of Kirkland, and industry leader Kendall Billman TODAY for a special webinar on how to nurture your customers and keep your business viable.
Kendall will discuss how to:
-
Address customer concerns and struggles, example: let the dealer become the liaison with the captive or bank
-
Manage the service lane during this crisis
-
Data-mine the correct customers
Jason Courter will share his firsthand experience from the west coast pandemic epicenter of Kirkland, Washington.
WHEN: TODAY, Thursday, March 26 - 2:00 p.m. EDT.
Around the Web
Best New Overland Vehicles [MotorTrend]
Bugatti Expands the Use of 3D Printing on Latest Hypercars [MotorAuthority]
Teachers Formed 50-Car Parade to Visit Their Students [CNN]
Some Tolls on U.S. Roads Suspended Due to Coronavirus [Autoblog]
