Subprime Shrinks Amid COVID-19 Sales Conditions
Automotive News reports that as vehicle sales fell sharply in the second quarter amid coronavirus pandemic conditions, the amount of subprime consumers originating auto loans slipped to its lowest recorded level, credit bureau Experian said this month. Melinda Zabritski, senior director at Experian Automotive, said subprime market shares have contracted for years after peaking in 2013. COVID-19 conditions likely expedited the pullback, particularly in the new-vehicle market. "Second quarter being what it was . . . the impact of quite a few people with lower credit scores being impacted a little bit more with unemployment rates, and just simply not being able to even shop in the current conditions," Zabritski said. New light-vehicle sales across the U.S. declined 33 percent during the second quarter, according to the Automotive News Data Center. Subprime customers made up 22.2 percent of auto loans, new and used, originated in the second quarter for the first time since Experian began tracking the data in 2007. Deep subprime borrowers, with credit scores of 500 and below, dropped below 3 percent — another all-time low. The average credit score for a new-vehicle loan rose 4 points year over year to 721. Read more here (Source: Automotive News).
Gulf Coast Dealers Face High Winds, Power Outages from Hurricane Sally
Retailers in Alabama and Florida were facing power outages and 80 mph winds after Hurricane Sally made landfall early Wednesday, reports Automotive News. One dealer in Pensacola, Fla., was able to move inventory but experienced winds of more than 100 mph during the storm, said Ted Smith, president of the Florida Automobile Dealers Association. In Alabama, two dealers were unable to assess damage to their stores because of fallen trees blocking their route. "They think they are going to be OK," said Tom Dart, president of the Automobile Dealers Association of Alabama. He said the storm hit farther east than anticipated, which spared dealerships in the Mobile Bay area. Dealerships in Pascagoula, Miss., in the eastern part of the state toward the Alabama line, were reporting little to no cleanup in the area. Sally made landfall near Gulf Shores, Ala., as a Category 2 hurricane with sustained winds of 105 mph. Read more here (Source: Automotive News).
GM Accuses Former Board Member of Leaking Confidential Information to Rival Automaker
General Motors Co. is suing a former board member, claiming he leaked confidential information to a rival company and to the United Auto Workers, a move the automaker says added billions to its labor costs, reports The Wall Street Journal. In a federal lawsuit filed in New Jersey this week, the company accused Joseph Ashton, a former vice president at the UAW, of accepting bribes from crosstown competitor Fiat Chrysler Automobiles NV, which was at the time trying to pressure GM into a merger. Mr. Ashton served as a director at GM at the time of the merger advances, which later became public. Mr. Ashton’s attorney, Jerome Ballarotto of New Jersey, didn’t immediately respond to requests for comment. Fiat Chrysler has called GM’s broader allegations of bribing union officials, contained in other litigation, meritless and said they are an attempt to hurt the company’s reputation. Read more here (Source: The Wall Street Journal).
Mercedes Set to Become First Manufacturer to Put Solid-State Batteries on the Road
In the search for more powerful, faster-charging, longer-life batteries, researchers have set their sights on a technology known as solid-state, though conventional wisdom suggests this alternative to familiar lithium-ion batteries won’t make it to market until later this decade. The Detroit Bureau reports that apparently, somebody failed to tell Mercedes-Benz. The German manufacturer says it’s ready to launch the first production application of solid-state batteries in its new eCitaro G articulated bus. Eventually, the technology could wind up in Mercedes passenger vehicles, as well. The new batteries aren’t a panacea. Though eventually expected to charge up almost as fast as you can fill a gas tank, Mercedes says these first-generation solid-state batteries will take longer than current technology. For customers who need more rapid charging, they still can order the eCitaro with a specially formulated lithium-ion pack. Read more here (Source: The Detroit Bureau).
House Democrats Seek Review of Delayed U.S. Auto Safety Rules
Three senior Democrats in the U.S. House of Representatives on Wednesday asked government auditors to study why U.S. auto safety regulators have failed to write dozens of new auto safety regulations, reports Automotive News. The delayed rules include rear belt warnings, revisions to vehicle defect reporting requirements, child restraint side impact tests, requirements for automakers to e-mail recall notices and provisions that make it easier to install child safety seats. Many of the rules have been delayed by more than four years. U.S. Rep. Frank Pallone, who chairs the Energy and Commerce Committee, along with U.S. Reps. Jan Schakowsky and Lisa Blunt Rochester, asked the Government Accountability Office to study the NHTSA research and rulemaking process "to identify factors contributing to delays." Under President Donald Trump, NHTSA has never had a Senate-confirmed administrator – the first time in history the agency has gone so long without a permanent head. It has been more than a year since the White House had a nominee pending. Read more here (Source: Automotive News).
CNA National Dealers Receive Over $15 Million in Mid-Year Distributions from Participation Programs
CNA National returned $15.2 million to automobile dealers across the U.S. through its various participation programs so far in 2020, bringing its inception-to-date total to $575 million. “Our industry-leading retro and reinsurance options continue to offer an effective and powerful way to generate income,” said Joe Becker, president and CEO. Dealers can meet their business and individual financial goals by choosing the type of participation program they prefer. CNA National reinsures vehicle service contracts, warranties, GAP and tire-and-wheel protection. The company has earned multiple awards as “Best Reinsurance Provider” in the Dealers’ Choice Awards, including first-place honors in 2011, 2012, 2013, 2017 and 2020. To learn how CNA National can help you maximize your income potential and long-term success, call (800) 345-0191 x450 or click here.
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