J.D. Power: Sales Down, Dealer Profits up in First Quarter of 2019
The automotive industry had a "surprisingly strong" first quarter – depending on what metrics you look at, reports Automotive News. Thomas King, senior vice president of data and analytics at J.D. Power, said Tuesday that while overall sales fell and consumer spending dropped in the first quarter, average transaction prices, automaker revenue, and dealer profits all rose. Overall, he said, the industry was in better shape than many analysts predicted and the rest of 2019 is likely to play out like the first three months. "The industry is much more than just its SAAR," King said, speaking at the Automotive Forum in New York. "You have to be careful what metrics you use to define the health of the industry." If you look only at sales, King noted, there were "pretty alarming signs of softening." Overall new-vehicle sales fell 1.7 percent in the first quarter, thanks largely to a 3.9 percent drop in retail sales, according to J.D. Power. Fleet sales, meanwhile, rose 5.8 percent. But, King said, other factors helped offset the overall decline. Read more here.
Toyota Likens Trump's Auto Tariffs to Pulling Pin Out of Grenade
Toyota Motor Corp. warned the Trump administration will inflict serious economic damage if it elects to hit cars and components with tariffs on national security grounds, reports Bloomberg. Implementing the levies will be like “pulling the pin out of the grenade,” Bob Carter, executive vice president of sales for Toyota Motor North America, said Tuesday at a conference affiliated with the New York International Auto Show. Read more here.
U.S. Raises Trade Deficit Concerns with Japan, No Deal on Individual Issues
The United States has raised concerns over its “very large” trade deficit with Japan in the first round of negotiations between the two nations on a new bilateral trade deal. According to Reuters, no agreement was reached on individual issues after two days of discussions, Japan’s economy minister said, but the two sides discussed trade issues focusing on goods, including farm products, both nations said. The two-day meeting came after U.S. President Donald Trump and Japanese Prime Minister Shinzo Abe agreed last September to start trade talks in an arrangement that protects Japanese automakers from further tariffs while negotiations are under way. Trump has made clear he is unhappy with Japan’s trade surplus with the United States – much of it from auto exports – and wants a two-way agreement to address it. During the talks this week, Washington highlighted the “very large trade deficit with Japan – $67.6 billion in goods in 2018,” according to the USTR statement. Read more here.
Mitsubishi's Fred Diaz: Increased Dealer Network Will Help Double Sales
Fred Diaz, CEO of Mitsubishi Motors North America, said Tuesday the automaker is looking to add dealers in select markets in an attempt to double sales. Automotive News reports that speaking at the J.D. Power Automotive Forum in New York, Diaz said he's looking to increase the 367 U.S. dealerships Mitsubishi has. While he declined to say what number the Japanese brand is targeting, he said it would be "nowhere near" the roughly 650 dealers it had in the late 1990s. "There's an old saying: 'If you want to sell more hot dogs, put up more hot dog stands.' I don't subscribe to that at all," Diaz said. "The most important thing we're focused on is when we add these points, our dealers are profitable. Our strategy isn't simply to add more dealers without a proper network plan." That plan, he said, involves targeting cities and high-volume regions. Each dealer must agree to investing in a new showroom that's part of what Mitsubishi calls a new "visual identity program." The company's 367 dealers represent about 61 percent of the U.S. market today, he said. He hopes to grow that number north of 90 percent. Read more here.
Toyota's 3-Row Highlander Gets a Redesign
Toyota unveiled a redesigned version of its Highlander SUV on Wednesday as competition heats up for three-row family vehicles. According to The Detroit Free Press, the 2020 Highlander is making its debut at the New York Auto Show. The gas engine model will be available for sale in December and the hybrid version will hit dealerships in February. Toyota did not release pricing for the redesigned Highlander, but the 2019 model ranges from $31,330 to $47,010, according to car-buying advice site Edmunds. With millions of consumers transitioning from passenger cars to SUVs and pickups, the Highlander has become an increasingly essential part of the Toyota lineup. But with the Hyundai Palisade, Kia Telluride, Subaru Ascent, and Volkswagen Atlas recently joining the category of three-row SUVs, Toyota will be under pressure to maintain the allegiance of its family-oriented customers. The Highlander will be sold in five trim levels, including a Platinum version that gets a 12.3-inch touchscreen display. Read more here.
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