LMP Automotive Holdings Agrees to Purchase Majority Stake in N.Y. Dealership Group for $608M
LMP Automotive Holdings Inc., an emerging public auto retailer and subscription provider, said it agreed to purchase a majority stake in New York's largest dealership group in a transaction valued at $608 million, reports Automotive News. The deal, announced late Friday, would advance LMP's aggressive acquisition goal to grow to as many as 50 franchised new-vehicle stores within a year of starting from scratch. Pending closing conditions, LMP plans to purchase a 70 percent stake in Atlantic Auto Group, which is owned by John Staluppi Sr. It represents the largest chunk of Staluppi Auto Group, which is ranked No. 9 on Automotive News' annual list of the top 150 U.S. dealership groups, based on 2019 retail new-vehicle sales. Staluppi Auto Group includes stores owned by John Staluppi Jr., which are not involved in the transaction. Staluppi Auto Group sold 62,570 new retail vehicles last year at a combined 43 dealership locations. Alongside previously announced acquisitions, the deal would bring Fort Lauderdale, Fla.-based LMP to a total of 26 dealership locations. Read more here (Source: Automotive News).
Used-Vehicle Demand Boosts Values on Repos
Repossession activity slowed this spring as the coronavirus pandemic raged across the U.S., with several state governors declaring the practice nonessential in much of the country, reports Automotive News. As repossessions resumed, however, auto lenders likely benefited from boosts in used-vehicle values. That's because, aftermarket experts say, flipping cars for higher values this summer may have helped lenders write off fewer losses and reduced the remaining balance for customers with repossessed vehicles. Other marketplace factors unique to the pandemic are impacting the types of vehicles coming into auction. Repossessed vehicles typically account for 12 to 16 percent of cars sold at auction annually, said Tom Kontos, chief economist at KAR Auction Services. Vehicles from dealerships make up about 50 percent. As dealerships buy back as many off-lease and trade-in vehicles as possible, repossessions are making up a greater percentage of a lower volume of vehicles in the auction pipeline, he said. Read more here (Source: Automotive News).
Nissan Confirms Plan to Abandon North American Commercial Van Market
Confirming months of rumors, Nissan said it will end production of commercial vans – like the NV200 – at plants in the U.S. and Mexico next year, a move that comes as part of a broad cost-cutting program aimed at helping the troubled Asian automaker reverse recent losses. According to The Detroit Bureau, the move puts an end to an aggressive program Nissan launched following the Great Recession, when it launched production of its full-size vans at its Canton, Mississippi assembly plant. The pullout also will impact production at the sprawling Nissan manufacturing complex in Cuernavaca, Mexico. The automaker hoped to carve out space in a market segment traditionally dominated by Detroit’s Big Three – and even supplied some of its vans, for a few years, to General Motors. But vehicles like the NV200 simply failed to catch on and Nissan is now paring back to its core product lines. Read more here (Source: The Detroit Bureau).
NADA Show to Go Virtual Next Year, Move to Feb.
The National Automobile Dealers Association has opted to make its annual convention completely virtual and move it to February amid uncertainty surrounding the coronavirus pandemic. Until last week, when NADA's executive committee decided on a virtual alternative, the organization had been tentatively moving ahead with plans to host its annual show Jan. 21-24 at the Ernest N. Morial Convention Center in New Orleans. The event typically draws tens of thousands of dealers, vendors and other visitors from across the U.S. and other countries. The virtual show is set for Feb. 9-11 — a rare Tuesday to Thursday schedule. On Oct. 3, the city of New Orleans moved to Phase Three of its response to the pandemic, which allows more business and restaurant activity but still blocks trade shows. "If the show were to be this month, we would be prohibited flat-out from doing it," NADA CEO Peter Welch told Automotive News. He said there was no way to predict where the city will be in its pandemic response come January, just three months away. Read more here (Source: Automotive News).
China Quarterly Car Sales Shift Out of Reverse for First Time in Two Years
China’s car market recorded its first quarter of year-over-year sales growth in two years as a broad economic recovery bolstered consumer confidence and discounts boosted demand, especially for electric vehicles, reports The Wall Street Journal. Retail passenger-car sales in the country increased by 7.9% in the three months ended Sept. 30 compared with a year earlier, the China Passenger Car Association said Tuesday. For just the month of September, sales increased by 7.3% from last year, reaching 1.91 million vehicles, the Beijing-based body said. The strong quarter, the industry’s first in two years, has raised hopes for a more sustained rebound through the end of the year after the coronavirus crushed a market already struggling with nearly two years of sales contractions. A broader economic rebound in China, which began in the industrial sector in the spring, is now beginning to wash over the country’s consumers, raising hopes for gross-domestic-product growth to regain its pre-coronavirus rate of between 5% and 6% when third-quarter numbers are released next week. Read more here (Source: The Wall Street Journal).
Webinar: Used Car Supersession
Join the next AutoTalk on October 27 at 2 p.m., where a panel will cover wholesale pricing and volume outlooks, as well as some best practices to stay ahead of the curve. Tune in to hear what some of the most successful dealer groups are doing to meet the shortage of used cars.
Guests will include:
-
Tom Kontos, Chief Economist, KAR Global: To provide real-time wholesale pricing and volumes through the various auction channels, and outlook for the remainder of the year.
-
Bob Grill, Senior Partner Development Manager at Carfax and Mike Rossman, Automotive Consultant: Will share some innovative and contemporary best practices to address the current used car sourcing challenges.
Around the Web
Survey Says: Millennials and Gen Z Care About Classic Cars After All [MotorAuthority]
The New Kink in Automotive Hiring: Amazon [Automotive News]
What It Takes for Risky Borrowers to Get a Car Loan [USA Today]
Why Jeep Didn't Make the New Grand Wagoneer Retro with Wood Panels [Autoblog]
