Subaru Says Tariffs Threaten 87-Month Growth Streak
Subaru Corp.’s more than seven year-long string of monthly U.S. sales gains may end if the Trump administration increases tariffs on cars and auto parts on national security grounds, reports The Detroit News. “There’s no question” that the streak is at risk, Tom Doll, president and chief executive officer of Subaru of America, said on Bloomberg Television. “Ultimately what could happen is the prices of the cars go up, and therefore, how do you put people into payments? Most people today are buying either on a lease or a loan. They’re not paying cash for the vehicle, so the monthly payment becomes critical.” Subaru is the only carmaker to boost U.S. sales every year in the last decade and extended its growth streak to 87 consecutive months through February. The Commerce Department delivered a report last month to President Donald Trump on whether imports of cars and parts threaten national security. While the findings haven’t been made public, Commerce Secretary Wilbur Ross can recommend options for the president, who’s called for levies of as much 25 percent. Read more here.
U.S. Auto Sales Are Falling as Prices for New Vehicles Jump to Highest Ever
U.S. auto sales are falling as vehicle prices climb, indicating that buyers at the lower end are getting squeezed out of the new car market, according to a new industry forecast. CNBC reports that first-quarter auto sales are expected to drop by nearly 2.5 percent from a year earlier, to 4 million units, according to J.D. Power and LMC Automotive. Retail sales, which exclude sales to rental car companies and other commercial businesses, are expected to drop by about 5 percent to 2.9 million units. It's the first time first-quarter retail sales are projected to fall short of 3 million units in six years, said Thomas King, senior vice president of J.D. Power's data and analytics division. It's more evidence that vehicle sales in the world's second-largest auto market are sliding from the record levels they had achieved in the years following the financial crisis. Read more here.
Nissan Considers Sweeping Reforms in Wake of Ghosn Scandal
Nissan has been handed a list of proposed reforms aimed at eliminating the concentration of power and alleged abuse of privilege that critics say spiraled out of control under former Chairman Carlos Ghosn and triggered the carmaker’s current governance crisis. According to Automotive News, the recommendations came Wednesday in the final report of a special committee CEO Hiroto Saikawa set up in December to examine ways of improving corporate oversight. The seven-person Special Committee for Improving Governance proposed a sweeping overhaul that includes creating separate committees to handle everything from corporate auditing to executive remuneration and nomination. The goal is to avert a centralization of power in a single executive and to stamp out conflicts of interest with Nissan’s partners Renault and Mitsubishi. The committee recommended abolishing the office of company chairman and replacing it with a chairman of the board of directors whose task will be primarily to run its meetings. Read more here.
U.S. Consumer Confidence Declined in March
A measure of U.S. consumer confidence fell in March, reports The Wall Street Journal. The Conference Board on Tuesday said its index of U.S. consumer confidence declined to 124.1 in March from 131.4 in February. The decline was primarily driven by more pessimistic views about current business and labor market conditions, said Lynn Franco, senior director of indicators at the Conference Board. Economists surveyed by The Wall Street Journal had expected a 133 reading in March. Consumers who described business conditions as good fell to 33.4 percent in March from 40.6 percent. And the gap between those who said jobs were “plentiful” and those who said jobs were “hard to get” narrowed. About 42 percent said jobs were plentiful, down from 45.7 percent and 13.7 percent said they were hard to get, up from 11.7 percent. Consumer confidence hit a postrecession peak in October of 137.9 and has since fallen, suggesting optimism may be waning. Read more here.
Genesis Unveils 'All-Inclusive' Vehicle Leasing Program
Noting that it adds a "new layer of convenience" to the Service Valet that already comes standard on every new 2019 Genesis vehicle, luxury automotive brand Genesis has introduced the Genesis Spectrum all-inclusive leasing program. Auto Remarketing reports that Genesis Spectrum will be available in select markets on new, 2019 G70, G80, and G90 sedans, and includes auto insurance as part of the monthly payment. The program will be available through its affiliate, Genesis Finance. All Genesis vehicles offer the no-cost service program that the company says “elevates the luxury vehicle ownership experience.” Services include valet service appointments that can be scheduled using the Genesis mobile app, complimentary maintenance and Genesis Connected Services. “We designed Genesis Spectrum as a seamless leasing experience that acts as an extension of the Genesis brand and its values,” Erwin Raphael, chief operating officer of Genesis Motor America, said in a news release. “More than anything, the Genesis Spectrum premise respects our customers’ time, which is their most valuable luxury.” Read more here.
Federated Advisory Board Gets Retail Automotive Input
Nineteen business leaders, including Jason Courter from Honda Auto Center of Bellevue in Bellevue, WA, Christina Dawkins from CO’s Auto Group, Inc. in Loveland, CO and Brad Strong from Strong Volkswagen, Inc. in Salt Lake City, UT, all members of the American International Automobile Dealers Association, gathered in Scottsdale, Arizona on February 22 and 23 to participate in the 2019 Federated Insurance Advisory Council Meeting. In its 30th consecutive year, the meeting gave industry leaders an opportunity to converse about challenges facing their businesses.
On the first day, council members discussed the importance of building and maintaining a “risk management” culture within their organizations, as well as the importance of attracting and retaining talented employees to assist in reinforcing the culture. Additionally, there was education on insurance and risk management strategies. Day two’s agenda addressed continuing the business culture for future generations through succession and estate planning. Attendees also provided feedback and input on current and proposed product offerings.
Federated Insurance is a national insurance and risk management organization that serves the property, casualty, and life insurance needs of clients in select industries. The organization is rated A+ (Superior) by industry analyst A.M. Best®.
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