Light Trucks Propel Toyota, Hyundai, Subaru Sales
Toyota Motor Corp., Hyundai, and Mazda racked up October U.S. sales gains on demand for crossovers and other light trucks, in the latest sign the market continues to claw back amid the coronavirus pandemic, reports Automotive News. At American Honda, volume fell 3.4 percent on weaker car and light-truck deliveries, with sales off 3.7 percent at the Honda division and 1.2 percent at Acura. Volume rose 8.8 percent to 205,349 at Toyota Motor – a record for the month – with sales up 7.8 percent at the Toyota division and 15 percent at Lexus. Overall, Toyota Motor said light-truck deliveries rose 14 percent, helping to offset a 0.4 percent dip in car volume. Combined deliveries of Toyota's two pickups -- Tacoma and Tundra -- jumped 22 percent to 33,773. Subaru also set an October record, with volume rising 11 percent to 61,411. Read more here (Source: Automotive News).
Elon Musk Says Tesla Was 'About a Month' from Bankruptcy During Model 3 Ramp
On Tuesday, Tesla CEO Elon Musk tweeted that his electric car company had been about a month away from bankruptcy in recent years when it was still figuring out how to mass-produce the Model 3 electric sedan. CNBC reports that in the middle of a discussion about Tesla’s fundraising history, a follower asked, “How close was Tesla from bankruptcy when bringing the Model 3 to mass production?” Musk replied: “Closest we got was about a month. The Model 3 ramp was extreme stress & pain for a long time — from mid-2017 to mid-2019. Production & logistics hell.” Musk has often spoken about what he calls the “production and logistics hell” of taking a new electric vehicle into high-volume manufacturing. However, Musk and the company had never disclosed exactly how little runway they had before facing a possible bankruptcy. Read more here (Source: CNBC).
Subaru Raises Profit Outlook as U.S. Market Rebounds More Than Expected
Subaru Corp raised its operating profit forecast on Wednesday by more than a third to 110 billion yen ($1.05 billion) because U.S. vehicle sales rebounded more than it expected after the coronavirus pandemic hurt demand. Reuters reports that like other automakers, Subaru, which sells two-thirds of its cars in the United States, had to shutter vehicle factories earlier in the year as the coronavirus spread. Customers also stayed away from dealerships leading to a drop in production and sales. The improved profit outlook by Japan’s No. 7 automaker compared with a previous prediction of 80 billion yen. It is 48% less than it posted in the year that ended March 31 and also less than an average estimate for a 114 billion yen annual profit compiled from 19 analysts polled by Refinitiv. Read more here (Source: Reuters).
BMW Warns of Pandemic Risks as Third-Quarter Profit Rebounds
BMW's third-quarter profit rose almost 10% thanks to Chinese demand for luxury cars, but the German automaker warned a new wave of coronavirus infections sweeping Europe and the United states posed a "considerable" risk to its business, reports Reuters. Sales of luxury models such as the 8 series and X7 helped the carmaker reach a new sales record in the quarter, but the cautious outlook sent BMW shares lower on Wednesday. “After a more stable phase in the economic environment in the third quarter, the pandemic is now clearly regaining momentum,” BMW said. “If the pandemic takes an even more serious course and the global economy experiences a perceptible downturn, the risk exposure could be considerable, particularly on the demand side.” Read more here (Source: Reuters).
Uber, Lyft Win in Calif. Bid to Keep Drivers as Contractors
Gig economy giants including Uber Technologies Inc., Lyft Inc,. and DoorDash Inc. have won their effort to pass a hotly contested ballot measure that will exempt the companies from a state law requiring them to classify most of their workers as employees, reports Automotive News. Uber and Lyft soared more than 14 percent in pre-market trading after California voters, in the most expensive ballot initiative in state history, approved a ballot measure exempting gig-economy companies from the state labor law known as A.B. 5. Almost 58 percent of voters were supporting the proposition versus 42 percent against, with more than 80% of the vote reported, according to the California Secretary of State’s Office. Drivers for Uber, Lyft, DoorDash, and the like will receive some new corporate perks but won’t be eligible for full employment benefits and protections as lawmakers had intended. Uber and Lyft alone will save more than $100 million a year on employment costs, according to one estimate. Read more here (Source: Automotive News).
Webinar: An Update on COVID-19's Impact on U.S. Auto Sales
Cox Automotive Senior Economist Charlie Chesbrough returns to AutoTalk on Thursday, November 12 at 2:00 p.m. EST for an update.
Topics to be reviewed include:
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Economic forecast and impact as we close out the year
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Consumer sentiment and buying behaviors
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Stock market, interest rates, and employment
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An outlook for vehicle sales
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Current view of new and used retail sales and prices
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